UK aid to China is falling rapidly but greater transparency is needed

13 Jul 2023

The UK government’s aid to China has fallen rapidly but there is limited transparency over where it is still being spent, a new report by the Independent Commission for Aid Impact (ICAI) finds today.

Aid to China from the UK fell to approximately £48 million in 2021-22 – down from £82 million in 2019 – and it is expected to continue to decline rapidly in future, according to the aid watchdog.

However, the report warns that there is still very limited information publicly available on which UK aid to China will continue, despite ICAI’s previous recommendation that the Foreign, Commonwealth and Development Office (FCDO) should set out clear and ambitious standards for transparency for all UK aid spend.

It follows a 2021 announcement by the then Foreign Secretary that aid programming in China from FCDO would be reduced by 95%, with the continuing programmes focused on promoting democracy and human rights.

ICAI Commissioner Sir Hugh Bayley, who led the review, said:

“While UK aid to China has fallen rapidly in recent years, taxpayers are still not being told clearly how much aid will continue and what it will be spent on.

“From the limited information shared with us, we’ve established that most aid funding to China from across government has ended. Remaining aid spend will focus on higher education, English language, arts and culture and, to a lesser extent, human rights.

“Average incomes in China will soon be too high for the country to continue to receive foreign aid and there appears to be no clear government strategy for how to manage this, which could put some of the benefits from past UK development assistance at risk.”

ICAI’s latest report builds on a previous information note, The UK’s aid engagement with China, which it published in 2021 shortly after Dominic Raab, Foreign Secretary at the time, announced the drastic reduction in spending.

At the time, the announcement was described by another minister as signalling an almost complete ending of the UK’s aid to China. However, the lack of clarity in the announcement led ICAI to update its information note which showed that the 95% reduction applied to only a limited portion of the FCDO’s aid spend to China and did not include spending by other government departments.

ICAI’s latest report seeks to address the continuing gaps in information about UK aid to China since 2021. It reports that the FCDO’s aid to China for “programme delivery” is declining in line with the stated 95% reduction. It also notes that other UK aid to China has fallen rapidly in recent years and is expected to continue falling, with most other government departments recently ending their funding.

However, FCDO aid to China through the British Council is set to continue, according to the report. This funding supports programmes on education, including teaching the English language, arts and culture. It has also been used in partnership with the Premier League to upskill grassroots football coaches, to deliver new and more inclusive participation. At £6.14 million, it is expected to be the largest remaining block of UK aid to China in 2023-24, although ICAI notes that funding to China through the British Council has fallen consistently overall since 2019.

ICAI also notes that aid-funded research partnerships – between China and the former Department for Business, Energy and Industrial Strategy and the Department for Health and Social Care – focused on the climate and global health security, have ended. FCDO programmes aimed at supporting developing countries with their engagement with China, for example on issues such as China’s aid and development policies, have also ended.

In addition, FCDO aid funding for Chinese Chevening Scholarships – which support international students to study at UK universities – has remained stable since 2019 (£1.65 million in 2021 compared to £1.7 million in 2019). FCDO aid funding for the Open Societies Programme, which funds small-scale projects related to freedom of expression, religious and cultural rights, criminal justice reform and civil society, has also remained stable (£0.88 million in 2021-22 compared to £1 million in 2019).

ICAI reports that there is no government strategy providing guidance for the reduction of UK aid to China, and no plan in place to transition away from aid-funded collaborations when China reaches developed country status and is therefore no longer eligible to receive UK aid.

The reviewers warn that the government’s lack of planning increases the risk that some past and future gains from UK aid to China could be lost, thereby reducing the impact of UK aid.