China sets up new foreign aid agency to better project influence abroad

China sets up new foreign aid agency to better project influence abroad

China announced Tuesday it will establish a new agency to coordinate its foreign aid program as part of an effort to project its global influence more effectively.

The establishment of a new international development cooperation agency came as part of the biggest shake-up of the government’s structure in two decades.

The changes cut the number of ministries in China’s cabinet, the State Council, by eight, down to 26, to streamline government and reduce bureaucratic infighting. But it will also strengthen the Communist Party’s top-down control, one of President Xi Jinping’s overriding goals, officials said.

The overhaul bolstered the role of the country’s environment ministry, which will now take responsibility for the fight against climate change, and included the merger of the banking and insurance regulatory agencies to improve supervision of the country’s debt-laden financial sector.

The changes were announced at a session of the National People’s Congress, the country’s rubber-stamp parliament, and will be formally approved Saturday.

Liu He, the president’s top economic adviser and a member of the party’s 25-member Politburo, called the changes “profound” and “revolutionary”

The new agency for international development coordination will integrate responsibilities currently undertaken by the ministries of Commerce and Foreign Affairs and integrate its work with Xi’s ambitious Belt and Road project, a major effort to increase Chinese lending for infrastructure development around the world.

The new agency will draft foreign aid policies, grant aid and supervise projects.

The move is designed “to give full play to foreign aid as a key means of major-country diplomacy,” enhance its coordination and “better serve the nation’s diplomatic strategy” including the Belt and Road project, State Councilor Wang Yong told parliament.

Li Fan, founder of the World and China Institute think tank, said the new body would be comparable to the U.S. Agency for International Development and Japan’s International Cooperation Agency and, in a similar manner, would serve China’s diplomatic objectives.

“Usually developed countries would have a foreign aid agency like this,” he said. “China is still a developing country, but now it also sees the need to set one up as it grows more economically powerful.”

China provides few details of its aid program, but said it sent more than half of its foreign aid of more than $14 billion between 2010 and 2012 to Africa.

The Belt and Road project may lead to even more commercial lending to the continent.