House of Commons - DFID and China - International Development Committee

DFID and China - International Development Committee Contents

2 DFID's programme since 2003

24. A primary focus of DFID's 2002-05 and 2006-11 bilateral aid programmes has been supporting the achievement of the MDGs in China. This chapter will explore the five major sectors on which this support has focused: poverty reduction; education; health; sanitation and water; and sustainable development.

Poverty reduction

25. DFID supports a major poverty reduction project with the World Bank with a contribution of around £22 million.[34] The project aims to improve the livelihoods of 1.4 million people in remote regions of Sichuan, Guangxi and Yunnan provinces, for instance by assisting with loans for agricultural activities, improved rural infrastructure and improved health and education. We met provincial officials in Sichuan who were using project money to target the poorest rural inhabitants (those with an annual per capita income of around $100). The officials gave us a very impressive and detailed presentation of how they were using this funding. They had promoted community participation in all activities, which included infrastructure construction (especially roads and irrigation for agriculture) and the development of a medical assistance scheme. The May 2008 earthquake had increased poverty from 11% to 35% of the population in the worst-affected areas, and so a current priority was rebuilding affected areas.

26. The joint DFID-World Bank project shows how effective DFID has been in maximising its small budget by partnering with larger donors. DFID says that working in this way has "greatly improved the effectiveness of much larger amounts of loan financing."[35]

27. DFID also supports poverty reduction in urban centres. Its Start and Improve Your Business (SIYB) project (run with the International Labour Organisation, ILO) was started in 2004 to help people vulnerable to poverty to develop their own businesses. The ILO representative in Beijing told us that, following the expansion from the initial 14 cities to a further 100, SIYB was the largest employment creation scheme in the world. She told us that, whilst DFID's funding had been relatively small (£3 million), its technical assistance had been enormously important and had, in fact, made the expansion of the project possible. We met entrepreneurs benefiting from the scheme in Chengdu, and heard about their successful ventures, which included a water processing product, pig breeding, a silk shop and a beauty therapy business.

28. During our visit, we travelled to the area of Sichuan province worst-affected by the May 2008 earthquake. In Hangwang township, 30,000 residents had had to be resettled following the almost total devastation of the town (4,000 citizens had been killed). At the resettlement site, ILO and DFID had launched a new scheme entitled 'Emergency Start and Improve Your Business' with DFID support of £350,000. The scheme, which had been running since August 2008, offered classes and coaching in re-establishing small businesses, and starting new commercial ventures, following the earthquake. Skills being taught included developing business plans, using marketing techniques and obtaining loans.

29. We were highly impressed with the joint DFID-International Labour Organisation Start and Improve Your Business (SIYB) project. DFID and the ILO have achieved a huge multiplier effect for their investment following the Chinese Government's expansion of the project from 14 initial cities to more than 100, making this the largest job creation scheme in the world. We were pleased to hear that the high quality technical assistance provided by DFID had played a key role in the expansion of the scheme. We were also very pleased to see that an adapted SIYB project had been launched as part of the emergency response to the May 2008 earthquake. We encourage DFID to ensure lessons from this particular application of the scheme are effectively transferred to the Chinese government so that they can form part of future emergency responses.

Education

30. China operates the world's largest education system, responsible for 20% of the world's students. The sheer task of providing education on this scale is quite staggering: in 2005, there were 170 million pupils, 9 million teachers and 360,000 primary schools in China. The Chinese Government has made it a priority to provide nine-year education (for ages 6-14) for all children and as a result it has met MDG 2 seeking universal access to education of primary school age. It has achieved gender parity in access to primary and junior secondary schooling and is on-track to reach it for the senior secondary and tertiary level by 2015.[36] This is strong overall progressbut national figures conceal persisting problems at local levels especially in western provinces and among ethnic minorities and particularly regarding drop-out rates for girls in the early secondary years and in higher secondary schools.[37]

31. As we saw during our visit to China, the focus is now moving from enrolment to educational quality. DFID has made this one of three priorities in its support to education, in addition to: supporting the enrolment and retention of marginalised children (the poorest children, girls, children with disabilities and children from ethnic minorities); and improving school organisation, financing and management.[38] The Department offers support in the poorest counties within a number of western provinces: Gansu, Sichuan, Yunnan, Guanxi, Guizhou and Ningxia. DFID has three ongoing education programmes:

the World Bank-DFID Basic Education in Western Areas Project (£24.5 million, 2004-2009). DFID estimates that the project will improve the equality of education for 2.4 million pupils. Under this project, 220,000 children—mainly girls—will receive boarding subsidies (the availability of boarding often being the deciding factor in whether girls from remote areas attend school);[39]
the Southwest Basic Education Project (£27 million, 2006-2011), a bilateral project with the Ministry of Education to support the achievement of nine-year compulsory education in Yunnan, Sichuan, Guizhou and Guangxi provinces; and
the Support to Universal Basic Education in Gansu Project (£6.25 million, 2006-2010). This project builds on lessons from a previous DFID-supported Gansu Basic Education Project (2000-2006) in other counties in the province.[40]

32. We visited two schools during our visit. The first, Yao Jia Wan Primary School, was in a poor county in Gansu province (see Map) and all 270 students belonged to the Hui ethnic minority community. The second school that we visited was Yong Tai Township Centre Primary School, a larger school (1000 students) in Sichuan province. Both schools had received DFID support, the first from the original Gansu Basic Education project (£14.4 million, 1999-2006) and the second from the World Bank-DFID Basic Education in Western Areas Project.

33. In both schools, two particular innovations had been introduced under DFID's support: school-based planning and child-centred learning. School-based planning promotes a 'bottom-up' decision-making approach under which committees of parents, teachers, students and community leaders participate in the running of the school. The two main aims are to both increase local 'ownership' of the school and to ensure that school curricula, organisation and culture are locally appropriate. To promote child-centred learning, teachers receive training that emphasises children's participation and their ability to learn, rather than the use of 'rote learning' or lecturing techniques. We were told that David Dollar, the World Bank Country Director, can recognise a DFID-influenced school in China straight away simply from the layout of the room, which is no longer arranged in formal rows but in a more participatory way.[41]

34. Benefits from these two approaches were evident in both schools. At Yong Tai, a three-year 'school vision' had been developed by the school planning committee that emphasised the needs of the many local children whose parents had migrated to cities for work. At both schools, the children were highly confident and seemed very happy, something the teachers attributed to participatory learning techniques such as interactive lessons and small group activities. The headmasters were both very positive, enthusiastic individuals who were clearly providing highly effective leadership to their schools.

35. These two interventions are representative of an approach DFID has used across its support to social services in China. DFID has sought to pilot small-scale ideas and demonstrate their efficacy to the Chinese authorities, before promoting the transfer and scaling-up of the approach to provincial or national level. For example, the child-centred learning approach was trialled in DFID's initial 2000-2006 Gansu Basic Education Project. Lessons from this pilot were then disseminated to other poor counties in Gansu province under a follow-on project, Support to Universal Basic Education in Gansu, launched in 2006.[42] The approach relies more on the provision of effective technical assistance than on substantial funding. Under the Basic Education in Western Areas Project, run jointly by DFID and the World Bank, DFID provides most of the technical assistance and operational research that are central to piloting good practice.[43]

36. UK-based charity VSO told us that this approach of demonstrating good practice was highly effective:

We think DFID has created an enabling environment for really improving the quality of basic education and compulsory education in Western China [...] They have really supported very intensely certain counties in China to become models of good practice that we can then expose other parts of China to. [...] They have sensitised [...] educational authorities to a new way of delivering educational services, which makes it easy for international NGOs such as ourselves to then come along and do more. [...] They have really encouraged community participation in education, which we think is the best way to make sure some of the gains are sustained in the long term.[44]

37. DFID told us that "China is unique amongst developing countries in its ability to draw on ideas and innovation from others and creatively build on them and roll them out across its vast country, pulling millions of people out of poverty in the process."[45] As a result, the numbers of children whose lives are being improved by DFID's education projects are likely to rise considerably. We were struck in the two schools that we visited in China by the impact of DFID's work in education in poor areas of China. DFID has targeted its support effectively towards marginalised children, prioritising interventions that specifically address the needs of poor rural children, ethnic minorities and girls. We were particularly impressed with the school-based planning and child-centred learning techniques that DFID has helped to implement successfully. We welcome the Department's approach of demonstrating the effectiveness of innovative approaches to education at the micro-level, and then handing over such projects to the Chinese authorities to scale up. This approach has achieved a real and positive impact on the world's largest education system and benefited millions of children and communities. It is also exploring innovative methods of teaching which could be applied in neighbourhoods of educational under-achievement in the UK.

Health

REMAINING HEALTH CHALLENGES WITHIN CHINA

38. Health provision—in terms of access and quality of care—has improved significantly in China over recent decades. However, major challenges remain. There are substantial inequalities in access between poor western and richer eastern provinces, urban and rural areas and different social groups. In some areas, China is bearing the double burden of communicable diseases such as tuberculosis (TB) and HIV/AIDS, and non-communicable diseases associated with rising affluence such as diabetes. Disproportionate social investment in urban areas is contributing to huge disparities in health outcomes, with life expectancy now 11 years longer in Shanghai than in the relatively poor western province of Gansu.[46]Further, the proportion of healthcare costs that the Government expects individuals to meet has increased significantly over the last two decades.[47] DFID told us:

As a result of government policies, a de facto private health care system is operating within the structure of a former nationally funded and managed health system. This has weakened health systems and neglected public goods like preventative health. Many poor people cannot afford basic health care, because of the high level of out-of-pocket payments.[48]

Because of the high costs of healthcare in China, people tend to save money in case they need to pay for healthcare or other emergencies. We were told that even the poorest people save up to 40% of their limited income to provide for illness and income failure. This is directly contributing to the financial crisis, as much of China's population cannot afford or do not want to risk spending on consumer goods, so the prospects for boosting domestic consumption are bleak.[49]

39. The substantial challenges which China faces in ensuring access to quality healthcare were all too apparent at the hospital that we visited in a poor county in Gansu province. The hospital had been re-built in 2002 and was described as "top quality". However, it had neither heating nor running water and could only offer 12 inpatient beds for a population of over 20,000 people.

40. Most of the health-related MDGs are likely to be met in China by 2015, but challenges remain for a number of targets:

Whilst child mortality will be successfully reduced by two-thirds by 2015—and hence MDG 4 will officially be met—this masks the fact that huge numbers of children in certain parts of the country are at risk. A recent study of China's health system by The Lancet found that children born in parts of the Chinese countryside are up to six times more likely to die by the age of five as their counterparts in wealthy cities.[50] In the poorest counties, the study found infant mortality to be 123 for every 1000 births, higher than Zambia, Rwanda or Ethiopia.[51]
China is on-track to meet the MDG 6 target seeking to "halt and begin to reverse" the spread of HIV/AIDS by 2015, but there is still work to be done in order to meet the second MDG 6 target of providing universal access to anti-retroviral treatment by 2010—especially amongst vulnerable groups such as migrant workers, men who have sex with men, drug users and sex workers.[52]
China is making progress towards the third MDG 6 target seeking to reduce by half the number of TB cases, but a lack of staff means that its national TB programme has key gaps in coverage, especially in rural areas.[53] DFID has supported China's efforts to tackle TB by providing technical assistance and funding of £28 million (2002-2010) to a national programme that seeks to improve detection rates and increase access to treatment. 80% of TB cases are now detected and 94% cured.[54]

HEALTH SECTOR REFORM

41. A major plank of DFID's assistance to health has been support for reform of the health sector to ensure that it prioritises access for poor people. Accordingly, it has sought to influence Chinese Government policy itself, rather than attempting to use its limited funds to secure gains in service delivery to a massive population.[55] DFID has provided support to provincial-level government through two initiatives over the last 10 years—the 'Health 8' Support Project co-financed with the World Bank (£21 million, 1999-2007) and the Urban Health and Poverty Project (£10 million, 2001-2007).

42. The 'Health 8' Project increased access to healthcare for 47 million poor people in 10 provinces in mid- and western China. The Project supported the Government's introduction of major new approaches to China's health system, such as an expansion of immunisation services and the promotion of birth deliveries in hospital.[56] The Urban Health and Poverty Project introduced the use of community health service centres and the concept of general practitioners being the first point of contact. Under the Project, DFID supported local governments in piloting Medical Financial Assistance (a scheme providing money to poor people to pay for health services). DFID says that lessons from these pilots were fed directly into the design and implementation of a national initiative that was subsequently introduced and now provides financial assistance in 86% of urban districts across China.[57]

43. DFID is using experiences from these two influential projects to inform a new Rural Health Project co-financed with the World Bank (2008-11, £5 million) and a Health Policy Support project run with the World Health Organisation (WHO, 2005-2009, £6 million). Under the Health Policy Support project, DFID and the WHO work directly with policymakers from the ministries in Beijing that are responsible for health sector policy to promote health policies that explicitly focus on poor people's needs.[58] In its submission, the consultancy YozuMannion Ltd said that the Project had successfully influenced government policy and that it was a "good example of a government-led project focusing on supporting policy dialogue in health with the aim of supporting government efforts to improve the access and affordability of health care for the whole population."[59]

44. During our visit to China, the Vice-Minister for Health told us that DFID was playing an "indispensable" role in guiding China's health policies and institution-building and that joint China-DFID programmes were regarded as a model for international projects because they took account of local conditions and moulded programmes around them. We commend DFID's efforts to help influence health sector reform in China over the last decade. During our visit, we saw evidence of the substantial challenges facing China in ensuring access to quality healthcare for all, especially poor people in rural areas of western provinces. Over the last decade, DFID has successfully supported small-scale pilot projects, including a medical financial assistance scheme enabling poor families to pay for healthcare, that have fed directly into the design and implementation of national reforms to the health sector. DFID is now using the relationships it has built up with Chinese policymakers to work directly on health policy.

HIV/AIDS

45. China has a generally low prevalence of HIV with 0.1% of the population affected.[60] But infection is spreading: at the end of 2007 China had an estimated 700,000 people living with HIV, a rise of 45% from 2006.[61] A recent report by China's state media said HIV/AIDS is now the leading cause of death, with almost 7,000 people dying from the infection in the first nine months of 2008. This represents a dramatic increase: China's Ministry of Health say that until three years ago, fewer than 8,000 people altogether had died from HIV/AIDS.[62]The epidemic in China had initially been concentrated amongst intravenous drug users (IDUs) but, increasingly, transmission is through heterosexual sex and men who have sex with men (MSM). Within groups vulnerable to HIV infection, prevalence is high: amongst IDUs it is estimated to be 6-7%, amongst MSM 5-6%, and amongst commercial sex workers about 1%. There are regional disparities in infection rates, with poor provinces and those which share borders with other countries experiencing the highest infection rates (Yunnan, Xinjiang, Sichuan and Guangxi).

46. Whilst the epidemic is currently concentrated within vulnerable groups and certain provinces, there is potential for it to spread quickly into the general population, due to:

the growing number of sex workers within China;[63]
the increasing HIV prevalence within the MSM community, and the large number of MSM who risk transferring infection to female partners;
the number of migrant workers contracting the infection and then returning to partners/wives in their home province (and vice versa); and
the fact that in most provinces the number of women being infected is rising steadily, leading to the risk of mother-to-child transmission.[64]

During our visit to China, a non-governmental organisation (NGO) told us that China was at a crossroads: unless the right policies were implemented, China could move from low to high prevalence as quickly as high-burden countries such as South Africa had done.

47. In order to ensure both MDG 6 targets are met—the first target seeking to "halt, and begin to reverse" HIV and the second (currently off-track) target to provide universal access to anti-retroviral treatment—the following challenges will need to be tackled:

meeting the needs of vulnerable groups;
dealing with stigma: any discrimination on the basis of HIV status is now illegal, yet in practice it is widespread, including among healthcare workers;
scaling up small pilot projects to ensure necessary coverage;
improving co-ordination between multiple government sectors; and
ensuring NGOs and community groups can play a full part in tackling HIV/AIDS.

Chinese Government resources for HIV/AIDS have steadily increased; the 944 million renminbi (RMB, approximately £96.4 million) allocated by central government in 2007 was an increase of 11% on 2006, and the 350 million RMB (£35.8 million) by provincial government an increase of 50%.[65]

48. DFID's support is focused in the poor western border provinces. Its projects support the development of models of HIV/AIDS prevention and care for vulnerable groups and building capacity to scale up responses. Its HIV/AIDS Prevention and Care project (HAPAC, £20 million, 2000-06) trialled large-scale replicable prevention and care models in Sichuan and Yunnan provinces. DFID called this "the single largest source of locally developed models, good practice and materials in China".[66] An independent external review of the project concluded that it had led to a range of positive outcomes, including: significantly increased condom use; significant reduction in needle-sharing amongst IDUs; changes in gender power relationships, enabling sex workers to negotiate 100% condom use; and a reduction in stigma.[67] Models from the HAPAC project have now been scaled up to national level: DFID told us that "the policy environment was initially very restrictive but harm reduction and condom promotion are now central to government policy on HIV and AIDS".[68] YozuMannion Ltd told us:

DFID-funded projects have created a neutral space to pilot innovative approaches from abroad and build domestic support for them within China. HIV/AIDS pilots with the China/UK HAPAC Project, for example, provided an evidence base that has facilitated the dramatic reform of national HIV/AIDS policies by the Government of China.[69]

49. In 2006, DFID committed £30 million (over five years) to what is China's largest HIV/AIDS project. This joint project with the UN and the Global Fund to Fight AIDS, Tuberculosis and Malaria targets high-risk populations in the seven highest prevalence provinces within China. It builds on the experiences of the HAPAC, extending the activities trialled in Sichuan and Yunnan to five other provinces. DFID says that direct beneficiaries will include 440,000 members of high-risk populations, 79,000 people living with AIDS and 4.5 million members of vulnerable groups.[70]

50. During our visit, we saw some highly successful initiatives that were being funded from the new joint project, including a methadone maintenance treatment clinic in Chengdu. Because drug use is illegal in China, it is difficult for IDUs to approach government facilities for treatment or counselling. This drop-in clinic represents a ground-breaking approach which offers ongoing methadone treatment (currently to 300 patients) as a way to help IDUs break their addiction to illegal drugs such as heroin. The clinic also runs a needle exchange programme (currently being used by 423 people) and offers HIV counselling and testing services. It is run with full Ministry of Health, police and district authority co-operation. It demonstrated benefits for community relations in addition to its impacts on drug use and HIV infection—for instance, the local crime rate has dropped by over 20% since the programme began.

51. Within certain groups of the Chinese population, the country's HIV rate is high and is growing. Infection could easily spread within the general population. We believe this is a worrying situation that requires urgent attention. We were impressed to hear about the achievements of DFID's HIV/AIDS Prevention and Care project (HAPAC). Again, DFID seems to have achieved a 'demonstrator effect' by pioneering replicable models that have subsequently been scaled up at national level. We commend DFID for this, and for committing £30 million to a new joint project with the UN and the Global Fund to Fight AIDS, Tuberculosis and Malaria that will build on the experiences of the HAPAC. We were highly impressed with the methadone maintenance treatment clinic, funded by the new project, that we visited in Chengdu. It demonstrates the effectiveness of innovative approaches to HIV treatment and care, and the benefits of multi-sectoral co-operation. However, the project is on a small scale and we recommend that DFID continue to promote the replication and expansion of initiatives of this kind.

Sanitation and water

SANITATION

52. In line with our 2007 report on this subject, we have chosen to reverse the conventional situating of sanitation as the second part of "water and sanitation", and will address sanitation first.[71] This is because the level of sanitation provision, so often a neglected sector, is of particular concern within China. UNDP states that 44% of China's population uses an improved sanitation source (adequate latrines and sewers). This is lower than countries such as Zimbabwe (53%), Malawi (61%) and Zambia (55%).[72] China says that it is on-track to reach the water and sanitation MDG 7 target, which seeks to reduce by half the proportion of people without sustainable access to safe drinking water and basic sanitation by 2015. However, current trends suggest this is by no means assured—especially in poor rural areas.

53. We described the critical importance of accessing adequate sanitation in our 2007 report. We will not restate these points here, but will reiterate that progress on sanitation is closely linked to: improving gender equality (MDG 3); boosting school enrolment (MDG 2); and achieving a reduction in child mortality (MDG 4). It is also worth reiterating that, on current trends, the sanitation target will not be met globally until 2076.[73]

54. Almost one in four people worldwide without access to sanitation and water live in China.[74] As in many countries, sanitation has historically been given much lower priority than water by the Chinese Government. Awareness of the benefits of sanitation and therefore demand for improved facilities is low, especially amongst many rural people and local government officials. Urban coverage is nearly twice that of rural areas (a 2006 Chinese Government health survey found 23% access outside the cities)[75]—and, accordingly, the child mortality rate due to diarrhoeal diseases is nearly twice as high for rural children.[76] In light of such statistics, we were concerned on our visit to see that the rural hospital we visited in Gansu province had no running water, making basic hygiene extremely difficult for medical staff and patients.

55. The Chinese Government has now made sanitation an integral part of the New Socialist Countryside policy and has included it in the National Health Strategy. The 11th Five Year plan sets targets for 65% coverage of rural sanitation by 2010. Central funding for latrine improvements in rural China has increased considerably to an estimated RMB 300 million (£30.7 million) for 2008 and an expected RMB 1 billion (£102 million) for 2009 (up from around RMB 150 million/£15 million in 2007). However, international experience shows that simply supplying sanitation facilities will not bring the required change unless demand is also boosted through awareness-raising and other complementary policies, including:

the generation of political will;
the avoidance of 'institutional fragmentation' (currently responsibility for sanitation is spread across a number of ministries in China);
the appointment of sanitation 'champions';
a focus on school sanitation, which both promotes girls' attendance and ensures children learn about the benefits of sanitation;
capacity-building at local government level; and
a focus on addressing insecure land rights and increasing residents' capacity to articulate their needs.[77]

We highlighted the importance of these interventions in our report on Sanitation and Water.

56. DFID has committed £15.1 million to the Rural Water Supply, Sanitation and Hygiene Education programme (2007-2011) which is being implemented with the World Bank and Unicef to benefit around 750,000 people in Shaanxi and Sichuan provinces.[78] Under this 'three-in-one' approach, DFID is using a strategy familiar from the education and health sectors to develop pilot projects on a number of the interventions listed above, including handwashing campaigns that use social marketing to change behaviour, and a focus on sanitation within 400 schools. Lessons from the pilots are then disseminated at central level to inform policy development and promote implementation in other provinces.[79]

57. DFID's newly-launched policy paper on water and sanitation gives a stronger focus to sanitation (partly, it has said, in response to our 2007 report recommending such a move).[80] The paper highlights DFID's considerable international experience in supporting policies that promote increased sanitation coverage and uptake, including grassroots approaches such as the Community-Led Total Sanitation scheme.[81] We are very concerned about the extremely low coverage of basic sanitation in China, especially in rural areas. Given China's relative overall wealth, it is striking that one in four people worldwide without access to sanitation and water lives in China. The Chinese Government needs to dramatically increase its efforts in order to boost both China's and the international community's efforts to reach the sanitation MDG target by 2015. We believe this will require urgent investment in a full range of policy responses designed to achieve a rapid and sustainable expansion of access to sanitation. We urge DFID to do all it can to support this enhanced effort.

58. The DFID-supported Rural Water Supply, Sanitation and Hygiene Education programme is a good starting point. We understand that, whilst the project will only benefit 750,000 people directly, DFID's approach of demonstrating successful pilots is likely to lead to greater impact. But given DFID's wide international experience of implementing sanitation initiatives, including at community level, we believe it could do more in China. This is likely to necessitate support being provided after 2011, the projected date for the withdrawal of DFID's bilateral aid programme in China, especially if the MDG 7 target on sanitation is to be met by 2015.

WATER SUPPLY

59. At 77%, the proportion of the population using an 'improved water source' (safe drinking water) is significantly higher than China's sanitation coverage of 44%. However, this still leaves one quarter of China's population without access to safe drinking water and compares poorly to coverage rates in other Asian countries (for instance, 90% in Nepal and 86% in India).[82] Once again, coverage is far worse in rural areas: in 2005, over 300 million people in rural areas had no access to safe drinking water.[83] This is equivalent to the total number of people in Africa without access to water.[84] Water-borne diseases such as schistosomiasis are a concern in some areas, as are fluoride and arsenic poisoning.

60. The Chinese Government's 11^th Five Year Plan aims to provide safe drinking water to an additional 160 million rural people by 2010, focusing on poorer western regions and rural schools. Central funding commitments are reported to be RMB 40 billion (around US$5 billion) for 2006-10.[85]

61. As described in the previous sub-section, DFID has chosen to integrate its responses to water supply with sanitation and hygiene into the £15.1 million Rural Water Supply, Sanitation and Hygiene Education programme (2007-11). The programme builds on DFID's previous approach towards improved water supply in Yunnan and Sichuan provinces, which developed models for community-based water supply management. DFID told us that these models and associated manuals are now used in domestic water supply projects across rural China.[86] Nearly a quarter of China's population has no access to clean drinking water. The number of people without access to clean water in rural areas of China is equivalent to the total number of people in Africa without access to water. Whilst we credit DFID's support to water supply under the Rural Water Supply, Sanitation and Hygiene Education programme, we are concerned that this support will end in 2011. China's ability to improve access is crucial to whether the MDG 7 target, seeking to halve the proportion of people without access to safe drinking water by 2015, will be met. We therefore believe that continued DFID support is likely to be needed beyond 2011. We will return to this subject in Chapter 4.

WATER RESOURCES MANAGEMENT

62. China's water resources are under huge strain. The processes of rapid economic growth, industrialisation, urbanisation and climate change are taking their toll on already constrained water resources. Essential infrastructure for sourcing, transporting and storing water is weak: for example, over 60% of China's reservoirs are in need of repair. For a country so dependent on agriculture to feed its huge population, this is a crisis situation. With 20% of the world's population, but only 7% of its water, China is having to work hard at managing its water crisis. It is estimated that the cost of water scarcity and pollution is 3% of GDP.[87] North China is especially water-scarce, with only one-third of the national per capita average water availability. More than 75% of the region's lakes and rivers are polluted.[88] Water scarcity across China is likely to be exacerbated by climate change, which is increasing the occurrence of droughts, floods and other extreme weather events.

63. DFID states that "water quality management and pollution control are at the heart of the policy debate in China."[89] China passed a new Water Law in 2002 stating that all people should have access to safe water, and that water conservation and protection are a priority. DFID provided support for the preparation of the law, partly by funding (with £1.4 million) the establishment of a regional network of the Global Water Partnership (GWP) in China in 2001. The GWP told us they were instrumental in amending the new Law to include a greater focus on integrated management of both surface and groundwater resources.[90]

64. DFID is now supporting the implementation of the Water Law in two water-scarce river basins in Gansu and Liaoning provinces through its Water Resources Demand Management Assistance Project (£9.4 million, 2005-10). The Project evaluates and disseminates lessons from seven pilots in different rural and urban settings. This includes assessing the impact of climate change on water availability.

65. DFID has also paid attention to building local capacity so that communities can participate in the management of their water resources. Its Watershed Management Project (£5 million, 2003-2008) carried out capacity building of local institutions and communities in four watersheds in the Loess Plateau in Gansu province.[91] Under the Pro-Poor Rural Water Reform Project (£7.5 million, 2004-09), DFID has helped to introduce nearly 500 water user associations that promote more equitable sharing of water resources between communities. DFID told us the "real benefits" that have resulted from the project include: the reduction of conflict; more equitable water delivery; water savings; increased transparency; revenue collection; and the empowerment of women (25% of leadership positions within associations are filled by women). Water user associations are now part of government policy.[92] When we met the Vice Minister for Water Resources in Beijing, he said that these user committees represented DFID's 'added value' in the water sector—that is, its ability to introduce innovative approaches. We also met with provincial government officials of the Sichuan Water Resource Bureau, who, with DFID Project support, had constructed a wide range of rural water infrastructure including supply systems, wells and school and household latrines.

66. China is facing a water crisis, with its already limited resources under further strain from the processes of rapid economic growth, industrialisation, urbanisation and climate change. DFID deserves credit for its role in ensuring that the 2002 Water Law prioritised integrated water resources management, and for its current efforts in helping to implement the Law in two water-scarce river basins. We were pleased to note that DFID is paying attention to building demand for improved water resources management and particularly commend its introduction of water user associations which simultaneously build local capacity and promote more equitable sharing of water resources between communities.

Sustainable development

67. China's development cannot be explored without addressing its social and environmental implications for both current and future generations. Indeed China's engagement with the climate change agenda is a crucial international issue. We will address the impacts of climate change as a separate topic in Chapter 3. As a way to share learning and promote collaboration, the UK Government has established the UK-China Sustainable Development Dialogue (SDD). The SDD was initiated by a joint prime ministerial declaration in 2004. It was recently extended for a further three-year phase (2009-11). A range of UK and Chinese government departments participate in the initiative, which is led by the Department for Environment, Food and Rural Affairs (DEFRA) in the UK but by DFID in China. The themes of the Dialogue are:

sustainable consumption and production in the UK and China;

natural resource management;

sustainable urban development;

capacity building and governance; and

sustainable financing (added as a new topic for the 2009-11 phase).[93]

68. We met the National Development and Reform Commission (NDRC), the Chinese Government department responsible for leading the SDD, in Beijing. They praised the UK's commitment to the Dialogue, including the regular high-level meetings that have taken place, and highlighted particular UK activities, including the UK-China Working Group on Forestry that had been set up.

69. The Working Group on Forestry includes a focus on illegal logging, a practice that was raised in evidence as an example of why the UK needs to maintain its dialogue with China on sustainable development. WWF-UK highlighted that China has become a key export destination for timber from some African countries. More than 80% of timber from Tanzania and Mozambique is exported to China. WWF state that much of this timber is harvested illegally and at unsustainable rates, and that this is due in part to the limited capability of Tanzania's government (local and national) to implement and enforce forest law. WWF suggested that DFID should do more to support civil society and governments in African countries to govern their natural resource sector effectively—and that DFID should maintain pressure on China to ensure that natural resources are imported sustainably.[94] Premier Wen Jiabao signed a new agreement on fighting illegal logging during a visit to Brussels on 30 January 2009.[95] During Premier Wen's visit to London in the following days, new UK Government funding of £250,000 was announced (with matched funding from WWF and other donors) for a project on sustainable trade in timber between China and East Africa (Mozambique and Tanzania).[96] We will return to China's engagement with Africa over natural resources in Chapter 3.

70. DEFRA's submission to this inquiry stated:

DFID has played an absolutely essential role in the establishment and subsequent management and delivery of the SDD [...] Its experience and expertise across a range of policy areas has been invaluable. DFID is a respected institution in China and the team has established an excellent working relationship which has enabled sometimes contentious issues to be addressed.[97]

DEFRA particularly highlighted DFID's ability to use its strong working relationships to promote collaboration with and between Chinese government departments, a substantial achievement considering that cross-departmental co-operation is an area still under development in China and, we were advised, is unique to China's international relations. DEFRA also highlighted DFID's work on the UK-China Sustainable Agriculture Innovation Network (SAIN) which aims to build awareness of the impact of the changing climate on agriculture.[98] DEFRA said that, due to the successful relationships that DFID had established, and the long-term nature of sustainable development work, "DEFRA would very much like to see DFID continue to work on the UK-China SDD and on supporting China's strategies for managing the impacts of climate change beyond 2011."[99]

71. We support the cross-departmental UK-China Sustainable Development Dialogue (SDD). DFID's position as lead UK department within China has been a driving force in the SDD's success. We believe that it is essential that pressure is maintained on the Chinese Government to address sustainable development issues such as illegal logging and sustainable agriculture. DFID's reputation and experience in China has enabled it to build highly effective working relationships across the Chinese government on these issues. If lead responsibility within China was transferred to another UK Department, it could take many years for them to develop similarly effective relationships. We recommend that, assuming the SDD is renewed for another three-year phase for 2012-15, DFID should continue to lead the Dialogue within China on behalf of the UK.

34 The total budget for the project is $100 million, with a DFID commitment of $32.45 million to reduce the interest rate on the Bank loan, plus £5.5 million as a grant (Ev 57) Back

35 Ev 56 Back

36 UNESCO, Education For All Global Monitoring Report 2009 Back

37 DFID China, Briefing Paper: Basic Education (September 2008) Back

38 DFID China, Briefing Paper: Basic Education (September 2008) Back

39 Ev 58-59 Back

40 Ev 58 Back

41 Q 162 Back

42 Ev 58 Back

43 Information provided during the Committee's visit to China. Back

44 Q 70 Back

45 Ev 56 Back