	Introduction

This report examines China's "economic assistance"—a term that encompasses a mix of development aid, loans, technical assistance, and state-sponsored investments—in Africa, Latin America, and Southeast Asia. In recent years, the People's Republic of China (PRC) has bolstered its diplomatic presence and economic influence, often referred to as "soft power," in the developing world. China has garnered considerable international goodwill through financing infrastructure and natural resource development projects, assisting in the execution of such projects, and backing PRC state enterprise ventures in many developing countries. Measuring China's Foreign "Aid"

PRC foreign assistance is difficult to quantify. Other analysts do not consider such activities as foreign direct investment (FDI), because they are secured by diplomatic agreements, do not impose real financial risks upon the PRC companies involved, or do not result in Chinese ownership of foreign assets. According to their measurements, PRC development financing, technical assistance, and state-sponsored investments in Africa, Latin America, and Southeast Asia exceed officially reported ODA and FDI totals combined, suggesting that much of Chinese foreign economic activity is not accounted for in either conventional measurements of ODA or foreign investment. Some reported values may be inflated: some loans represent offers or pledges that may not have been fulfilled; some projects may have been cancelled, while others involving several parts or taking several years to complete may have been counted more than once. The Impact of China's Economic Assistance

In addition to their actual monetary value, Chinese assistance and related economic activities often garner appreciation disproportionate to their size, for several reasons, including
loans and investments often are made available relatively quickly and easily—without the political, economic, social, and environmental conditions and safeguards and bureaucratic procedures that major OECD aid donors, multilateral financial institutions, and multinational corporations typically impose; China often promotes economic projects in countries, geographic areas, and sectors that developed-country governments and multinational corporations have avoided because they have determined them to be unfriendly, too arduous, or infeasible; many PRC-funded or -built public works in developing countries, such as national cultural centers, stadiums, and highways, are highly visible and provide tangible, short-term benefits; and Chinese economic and investment activities are often announced at bilateral summit meetings with great fanfare and are referred to by Chinese officials as "assistance," powerfully symbolizing the friendship between China and other countries. Of the loans, infrastructure projects, and other economic assistance provided by China to the three regions between 2002 and 2007, 44% was allocated to Africa, 36% to Latin America, and 20% to Southeast Asia. They are not meant to be directly compared to estimates of Chinese assistance to the region, which are based upon different definitions. China is Africa's third largest trading partner after the European Union (EU) and the United States. In terms of official development assistance as measured by the OECD, the EU, the United States, and Japan are the largest providers in the region. While China is not counted as a major regional provider of ODA as measured by the OECD, some reports and observations suggest that the PRC is one of the largest sources of economic assistance in Southeast Asia. Although access to natural resources plays a prominent role in China's engagement in the region, strategic objectives likely influence China's activities in Southeast Asia to a greater extent than they do in Africa and Latin America. The Wagner School team compiled a list of PRC economic assistance and related investment projects or offers in Southeast Asia reported during the 2002-2007 period.
In recent years, the People's Republic of China (PRC) has bolstered its diplomatic presence and garnered international goodwill in the developing world through financing infrastructure and natural resource development projects, assisting in the execution of such projects, and backing PRC state enterprises in many developing countries. This report examines China's foreign assistance and government-supported, often-preferential investment ventures in three regions: Africa, Latin America (Western Hemisphere), and Southeast Asia. These activities often are collectively referred to as "economic assistance" by some analysts and in this report.
Much of China's "economic assistance" does not constitute "official development assistance" (ODA) as measured by the Organization for Economic Co-operation and Development (OECD) and as generally provided by members of the OECD. However, many activities have an aid component—they are secured through official bilateral agreements, promote development, and provide economic benefits to recipient countries that otherwise might not be made possible. Furthermore, they are not strictly commercial or do not result in foreign ownership of productive assets, and thus they do not qualify as foreign direct investment (FDI). In terms of development grants, the primary form of assistance provided by major aid donors, China is a relatively small source of global aid. However, when China's commercial and concessional loans, technical assistance, and state-sponsored or subsidized investments are included, the PRC becomes a major source of economic assistance.
This report is largely based upon research conducted in 2007-2008 by graduate students at the New York University Robert F. Wagner Graduate School of Public Service under the supervision of Wagner School faculty and CRS specialists. The students' findings, while not comprehensive, suggest a dramatic increase in PRC economic assistance and state-sponsored investment from 2002 through 2007. The numbers provided in this report are not meant to be interpreted as reliable foreign aid totals. Furthermore, some PRC loans or aid pledges may not have been fulfilled and some aid pledges that include multiple projects or that span several years may have been counted more than once.
According to the Wagner School research, during the 2002-2007 period, Africa received the greatest amount of loans and other economic assistance, followed by Latin America and Southeast Asia. The findings suggest that China's aid activities in Africa and Latin America serve the PRC's immediate economic interests, while those in Southeast Asia relate to longer term diplomatic or strategic objectives. In Africa and Southeast Asia, PRC-sponsored infrastructure and public works projects constitute the most common form of activity, while in Latin America, where some countries are more developed, Chinese natural resource development projects are more prominent. China is fast becoming a top trading partner with Africa and Southeast Asia, and it is second to the United States as a market for Latin American commodities and goods. Although the PRC's economic assistance activities are a highly visible reminder of China's growing diplomatic and economic influence, or "soft power," the European Union, the United States, and Japan continue to dominate foreign investment in Africa, Latin America, and Southeast Asia.
This report will not be updated.