Lawmakers To Scrutinize U.S. Foreign Aid To China

WASHINGTON (AP) — Lawmakers on Tuesday will scrutinize a portion of the U.S. budget that's tiny but touches a raw nerve: development aid to China, America's biggest foreign creditor.

The House Foreign Affairs subcommittee on Asia is examining $4 million in proposed assistance, mostly for promoting clean energy technology. The committee has put that aid on hold as it demands explanations from the U.S. Agency for International Development of how the funds would be used.

It is a tiny fraction of USAID's $21 billion budget — which itself scarcely scrapes the surface of America's $14.8 trillion national debt — but it feeds into a wider sense of outrage that the U.S. government is borrowing money from China only to give some of it back as aid.

Rep. Donald Manzullo, R-Ill., who chairs the subcommittee, also claims the aid helps boost the competitiveness of Chinese manufacturers at the expense of U.S. manufacturers and jobs, and in a sector where the U.S. has protested Chinese state subsidies. He calls it "emblematic of the dysfunction in America's foreign aid spending priorities."

In the past decade, various U.S. government agencies have provided nearly $275 million of assistance to China, principally to promote democracy, the rule of law and a cleaner environment and to preserve the cultural identity of communities in Tibet, whose exiled spiritual leader, the Dalai Lama, is widely respected in Washington.

"This issue has been unfortunately politicized by both (Republican and Democrat) parties," said Deborah Brautigam, an expert on China and international development at American University. "The aid we have given to China is minuscule and clearly in support of our interests."

But as the United States scrambles to reel in the national debt, foreign aid, which makes up less than 1 percent of the federal budget, is among the first items on the chopping block. Of recipient nations, fast-growing China represents a prime target.

Many lawmakers blame China for America's economic woes, and in a divisive political climate, it is one of the few issues that Democrats and Republicans can agree upon.

Last month, there was bipartisan support for a bill to punish China for undervaluing its currency, which is viewed as hurting U.S. exports at a time when the U.S. manufacturing sector is struggling and unemployment is more than 9 percent. Lawmakers have also reached across the aisle to condemn Beijing for human rights abuses, intellectual property theft and the counterfeiting of components that end up in U.S. military hardware.

While that kind of activism won't force a change in President Barack Obama's policy of seeking a cooperative relationship with China, it can constrain it, as Congress controls the budget strings.

In August, a bipartisan group of senators led by Sen. Jim Webb, D-Va., called for an end to U.S. development aid to China — other than for Tibetans and for promoting human rights and democracy.

USAID says its assistance to China is decreasing. The budget request for its programs for fiscal 2012 is $12.85 million — principally to help Tibet and to prevent the spread of infectious diseases. That's down from $26.2 million in 2010. The State Department says none of the funding went to the Chinese government.

According to the Congressional Research Service, recipients of USAID grants in the past have been predominantly U.S.-based private groups and universities, although some Chinese private groups, universities and government entities have benefited from or collaborated with U.S. programs.