IV Macro Policy & Sovereign DebtSub-Saharan Africa
Seen from Beijing, a South-South fund should replace lost Western aid
- Institution
- China Daily (China Watch)
- Author
- Zhao Wenjie, A K M Kanak Pervez, Zhu Lili
- Country · language
- China · English
- Affiliation
- State media
Summary
In a piece published on 15 October 2026 on the China Watch platform of the state-owned China Daily, Zhao Wenjie and Zhu Lili of China Agricultural University and A K M Kanak Pervez of Rajshahi University in Bangladesh argue that the North-South development aid model is coming apart. On their reading of OECD data, total official development assistance fell 23.1% in 2025 against 2024 and in absolute terms is back to its 2015 level, with traditional donors such as the United States and the United Kingdom cutting sharply. UN estimates put the global extreme poverty rate at 10% in 2026, with sub-Saharan Africa and the Middle East set to miss the 2030 target.
The article presents China as the alternative model, writing that 800 million rural people have left extreme poverty since 1978, more than 70% of the global reduction over the same period. Zero tariffs, applied since 1 May to the 53 African countries with which China has diplomatic relations, have lifted exports of coffee, avocado and citrus. The authors concede that the financing gap is widening and that cooperation mechanisms remain inadequate. Their proposals come under three headings: a poverty fund run by the Global South through the UN Office for South-South Cooperation, regular networks within the SCO and BRICS backed by the Asian Infrastructure Investment Bank, and a joint monitoring mechanism.
Blind spot
What the West misses: while the aid-cut debate in Western capitals is framed as a budget question, Beijing is working to turn that vacuum into an institutional framework through the SCO, BRICS and the AIIB. The weakness: the piece appeared in state media, never mentions the debt burden of Chinese lending to Africa, and gives neither the size of the proposed fund nor who would finance it.
Talay assessment
Bottom line
The piece shows that Beijing reads the 23.1% fall in Western aid as a chance to institutionalise its own development framework. It has opened a zero-tariff trade channel to 53 African countries, yet the size of the proposed fund is undefined and China's own lending volume is absent from the text. The most likely path is a South-South initiative strong in rhetoric and limited in funding, alongside a trade-led Chinese approach in Africa.
Likely effects
- African development financeUncertain1–6 months
Official aid falling back to its 2015 level pushes African countries further towards alternative sources such as China, the Gulf and multilateral development banks.
- African exportsPositive1–6 months
China's zero-tariff treatment for 53 countries is growing agricultural exports, but it does not change the raw-commodity weighting of those exports.
- TürkiyeUncertain6 months+
As competition in African development finance intensifies, the presence Türkiye has built through TİKA and contracting will compete in the same arena as China's trade and fund offer.
Possibilities, ranked
- 1Strong rhetoric, limited funding60%
China defends the South-South poverty initiative at BRICS and SCO summits, but no large, concrete fund is created.
Watch: Language on a poverty fund in BRICS or SCO summit declarations
- 2An AIIB-backed fund is created25%
A fund with announced initial capital is set up under the AIIB or the UN Office for South-South Cooperation.
Watch: An AIIB announcement of a new fund or lending programme focused on poverty reduction
- 3Western aid returns15%
Traditional donors raise their aid budgets and interest in the Chinese proposal fades.
Watch: The OECD's preliminary 2026 official development assistance data
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Original publication: chinadaily.com.cn · 15 October 2026
This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.