U.S.-Funded Assistance Programs in China

U.S.-Funded Assistance Programs in China
Thomas Lum
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
United States foreign assistance to the People’s Republic of China (PRC) primarily
supports democracy-related programs, particularly rule of law training, and assists
Tibetan communities. The U.S. Congress has played a leading role in providing funding
for democracy programs, which has grown from $10 million in FY2002 to an estimated
$23 million in FY2007. Major program areas include legal training, legal aid, criminal
defense, labor rights, and civil society development in China, monitoring human rights
conditions in the PRC from outside China, and preserving Tibetan culture. This report
will be updated annually.
Overview
United States foreign assistance to the People’s Republic of China (PRC) primarily
supports democracy-related programs and assists Tibetan communities, from both inside
and outside of China. USAID does not have a presence or mission in the PRC, due in part
to the Chinese government’s reported human rights abuses. However, the Peace Corps
has been involved in English language and environmental education in China since 1993,
and USAID and the State Department have funded or administered programs in China and
Tibet since 2000. The U.S. Congress has played a leading role in promoting democracy-
related programs in the PRC. In the past five years, annual foreign operations
appropriations for democracy programs in China and Tibet have grown from $10 million
in FY2002 to approximately $23 million in FY2007. Major recipients of U.S. grants for
China programs include Temple University (rule of law), the International Republican
Institute (village elections), the Asia Foundation (civil society), and the Bridge Fund
(Tibet).
The Department of State’s East Asia and the Pacific (EAP) Bureau and the Bureau
of Democracy, Human Rights and Labor (DRL) have allocated funding from two¹
accounts, the Economic Support Fund (ESF) and the Democracy Fund, primarily for
U.S.-based non-governmental organizations (NGOs) in China, which in turn have
provided some funding to Chinese non-governmental organizations. The East Asia

¹ Also referred to as the Human Rights and Democracy fund (HRDF).

Regional Democracy Fund also has provided some ESF for rule of law and Tibet
programs. Since 2006, Congress has appropriated Development Assistance (DA) to
American educational institutions for exchange programs related to democracy, rule of
law, and the environment in China. In 2007, the U.S. government began funding
HIV/AIDS programs in China using Child Survival and Health (CSH) account funds.
Some experts argue that legal reform efforts in China have produced limited benefits
due to the lack of judicial independence, weak enforcement of laws, constraints on
lawyers, and political corruption. Others contend that U.S.-funded rule of law programs
in China have helped to build foundations for
democratic change — more professional
judicial personnel, more transparent lawmaking^Co^m^m^o^nly^{Used Acro}^ny^m^s
processes, and more sophisticated laws — and
have bolstered reform-minded officials in the^AB^A^:^A^m^erican^B^a^{r A}^s^s^o^ciation
Chinese government. Many foreign and^CSH^:^Ch^ild^Su^r^v^iv^{al an}^d^Health
Chinese observers have noted that awareness of^DA^:^Dev^e^lopm^en^{t A}^s^sⁱ^s^t^an^ce
legal rights in many areas of PRC society is^DRL^:^B^u^reau^of^Dem^o^cracy^Hu^m^aⁿ^Rⁱ^g^h^t^s^an^{d L}^a^bor
growing. ^ESF^:^Econ^omⁱ^c^S^u^pport^F^uⁿ^d^s
^HRDF^:^Hu^m^aⁿ^Rⁱ^g^h^t^s^an^{d Dem}^o^cracy
FY2008 Appropriations^Fund
^NE^D^:^Natioⁿ^a^{l En}^d^o^w^m^eⁿ^t^f^o^r
For FY2008, the Bush Administration^Dem^o^cracy
requested a total of $9.2 million for China,^NG^O^:^N^o^n-G^o^ve^rⁿ^m^e^nt^a^l^O^r^gaⁿⁱ^z^a^tⁱ^oⁿ
primarily CSH account funds for HIV/AIDS^OE^CD^:^O^r^gaⁿⁱ^z^a^tⁱ^o^{n fo}^r^E^c^oⁿ^o^mⁱ^c
programs ($7.2 million).² Economic Support^C^ooperatⁱ^oⁿ^an^{d D}^e^v^e^l^opm^en^t

Funds ($2 million) are to support rule of law
programs, judicial independence, and the role
of NGOs in Chinese society. Tibetan programs
include public health efforts, education, environmental conservation, and job skills
training in Tibetan communities. In addition, the Consolidated Appropriations Act,
FY2008 (P.L. 110-161) provides $15 million for democracy and rule of law programs in
the PRC, Hong Kong, and Taiwan out of the Democracy Fund.³ The FY2008
appropriations measure also mandates $5 million from the ESF account for activities that
preserve cultural traditions and promote sustainable development and environmental
conservation in Tibetan communities in China, and $250,000 to the National Endowment
for Democracy (NED) for human rights and democracy programs related to Tibet. In
addition, $10 million in Development Assistance is to be provided to American
educational institutions and NGOs for programs and activities in the PRC related to
democracy, rule of law, and the environment.
² Congressional Budget Justification for Foreign Operations, FY2008.
³ Since 2004, the annual congressional authorizations for democracy funds for China have
included Hong Kong and Taiwan. Funding for legal and political reforms in Taiwan shall only
be made available to the extent that they are matched from sources other than the United States
government. Taiwan receives approximately $500,000 annually to develop its export control
system and combat trafficking in persons. Hong Kong receives assistance for strengthening
political parties and supporting democratization ($840,000 in FY2007).

Foreign Operations Appropriations, 1999-2007
Between 1999 and 2007, the United States government made available or authorized
roughly $133 million for democracy-related programs in China. In FY2007, total funding
for U.S. assistance programs in China represented about 7% of total U.S. foreign aid to
East Asia.⁴ In other comparative terms, the Ford Foundation, which does not receive U.S.
government support, provides grants for projects in several areas, including rule of law,
civil society, rural development, education, and public health ($220 million during 1988-
2006). European aid efforts, particularly in the area of PRC legal reform, reportedly have
far surpassed those of the United States in terms of funding, with greater emphasis on
commercial rule of law.⁵ According to OECD data, the top donors of bilateral official
development assistance (ODA) to China (2006) are Japan ($1.5 billion), Germany ($441
million), and France ($186 million). However, some major aid donors, such as Japan and
Germany, provide a large share of their foreign assistance in the form of loans rather than
grants.⁶ Some policy makers in these countries have advocated reducing their
development aid to China, due largely to China’s rise as an economic power.
FY2000-FY2003 Appropriations. Prior to 2000, China received only Peace
Corps assistance. The Consolidated Appropriations Act for FY2000 (P.L. 106-113)
provided $1 million for U.S.-based NGOs (to preserve cultural traditions and promote
sustainable development and environmental conservation) in Tibet as well as $1 million
to support research about China, and authorized ESF for NGOs to promote democracy in
the PRC. For FY2001 (P.L. 106- 429), Congress authorized up to $2 million for Tibet.
In FY2002 (P.L. 107-115), Congress made available $10 million for assistance for
activities to support democracy, human rights, and the rule of law in China, including up
to $3 million for Tibet. The FY2003 foreign operations funding measure (P.L. 108-7),
provided $15 million for democracy-related programs in China, including up to $3 million
for Tibet and $3 million for the National Endowment for Democracy (NED).
FY2004-FY2007 Appropriations. In 2004, the Bureau of Democracy, Human
Rights and Labor became the principal administrator of China democracy programs. The
FY2004 appropriations measure (P.L. 108-199) made available $13.5 million for China,
Hong Kong, and Taiwan, including $3 million for NED. Appropriations for FY2004
provided a special earmark for Tibet ($4 million). In FY2005 (P.L. 108-447), Congress
provided $19 million for China, including $4 million for NED, and authorized $4 million

⁴ For FY1999-FY2003, totals are taken from General Accounting Office, “Foreign Assistance:
U.S. Funding for Democracy-Related Programs,” February 2004. For information on U.S.
assistance to Asia, see CRS Report RL31362, U.S. Foreign Aid to East and South Asia: Selected
Recipients, by Thomas Lum.
⁵ The European Union reported “co-operation projects” worth $325 million (250 million Euros)
during 2002-2006, including legal and judicial assistance, social reform, education, the
environment, and economic development. See Delegation of the European Commission to China,
available at [http://www.delchn.cec.eu.int/en/Co-operation/General_Information.htm].
⁶ Approximately 90% of Japanese ODA to China has come in the form of loans, according to
some sources. See The Ministry of Foreign Affairs of Japan, “Overview of Official Development
Assistance to China” [http://www.mofa.go.jp/policy/oda/region/e_asia/china/index.html].
German aid to the PRC reportedly also includes a substantial loan component. See “As China
Booms, Germany Politicians Question Continuing Aid,” Deutsch Welle, July 27, 2007.

for Tibet and $250,000 for NED in Tibet. In addition, the FY2005 appropriations
measure authorized the use of Development Assistance for American universities to
conduct U.S.-China educational exchange programs related to democracy, rule of law, and
the environment. The conference agreement (H.Rept. 109-265) on the FY2006 foreign
operations appropriations bill (H.R. 3057, signed into law as P.L. 109-102) extended $20
million for China. For Tibet, P.L. 109-102 authorized $4 million for Tibet and Tibetan
communities in China and $250,000 to NED in Tibet. The FY2006 appropriations
measure also provided $5 million in Development Assistance to American educational
institutions for legal and environmental programs in the PRC. Because of the late
enactment of the Continuing Appropriations Resolution for FY2007 (P.L. 110-5), many
U.S. foreign aid programs for the year were not specified but funding continued at or near
FY2006 levels.
Table 1. Selected U.S. Grant Assistance to China, 2000-2006
(thousand dollars)
^Accouⁿ^t^FY00^FY01^FY02^FY03^FY04^FY05^FY06^FY07^es^t.^FY08^es^t.
^CSH^—^—^—^—^—^—^—⁴^,⁸⁰⁰⁷^,²⁹⁰
^DA^—^—^—^—^—^—^4,950^5,000^10,000^d
^ESF^a^1,000^28,000^b^10,000^15,000^13,500^19,000^20,000^19,000^17,000^d
^ESF^-^d
^Tibe^t^—^—^—^—^3,976^4,216^3,960^3,960^5,250
^Peace
^Co^rps^1,435^1,298^1,559⁹⁷⁷⁸⁶³^1,476^1,683^1,886^1,953
^La^bo^r^c^—^—⁶^,⁴⁰⁰^—^—^—^—^—^—
^To^t^a^l^2,435^29,298^17,959^15,977^18,³³⁹^24,692^30,593^34,646^41,493
^S^o^u^rces^{: U}^.^{S. D}^e^pa^r^t^m^e^{nt of}^Sta^t^e^c^ong^r^e^s^sⁱ^ona^{l budg}^e^t^jus^tif^ic^a^tions^f^o^r^f^o^r^e^ig^{n ope}^r^a^tions^{; c}^ong^r^e^s^sⁱ^ona^{l f}^o^r^e^igⁿ
^ope^r^a^tions^a^ppr^opr^ia^tions^le^gⁱ^s^l^a^tion.
^a^.^N^o^{t s}^p^e^cⁱ^fⁱ^e^d^{in Sta}^t^e^D^e^pa^r^t^m^e^{nt a}^nnua^{l budg}^e^t^jus^tif^ic^a^tions^.
^b^.^Co^m^p^en^satⁱ^oⁿ^f^o^{r t}^h^{e acci}^d^eⁿ^t^al^NA^T^O^b^o^m^bⁱⁿ^g^o^f^t^h^{e P}^{RC E}^m^b^a^ssyⁱⁿ^Bel^g^rad^e^.
^c^.^D^e^pa^r^t^m^e^{nt of}^L^a^bor^pr^og^r^a^m^s^{to pr}^om^ote^w^o^r^k^e^r^s^’^rⁱ^g^h^ts^{, g}^r^eat^er^a^w^a^r^eⁿ^e^s^s^of^la^bor^la^w^s^{, le}^g^a^{l a}ⁱ^{d s}^e^r^v^ic^e^s^to
^w^o^m^e^{n a}^{nd m}ⁱ^g^r^aⁿ^{t w}^o^r^k^e^r^s^,^a^nd^he^a^lth^a^nd^s^a^f^e^ty^s^t^a^nda^r^d^s^{in C}^h^ina^,^pur^s^u^aⁿ^{t to P}^.^L^.^106-^{286 (}^g^r^a^nting^C^h^ina
^pe^r^m^aⁿ^eⁿ^{t nor}^m^a^{l tr}^a^d^e^r^e^la^tions^s^t^a^t^us^{, or}^P^N^T^R⁾^.
^{d. T}^h^e^Cons^olida^t^e^d^A^ppropria^tions^A^c^{t, FY}^{2008 (P}^.L^.^{110-161) prov}^ide^s^{$10 m}^{illion f}^o^{r U}^.^S.-China^e^duc^a^tiona^l
^e^x^c^h^aⁿ^g^e^s^(D^A⁾^{, $15 m}^{illion f}^o^{r China}^/^H^ong^K^ong^/T^aⁱ^w^aⁿ^de^m^o^c^r^a^c^y^prog^ra^m^s^{(ESF), a}^{nd $5.25 m}^{illion f}^o^r
^Tⁱ^b^e^t^aⁿ^co^m^m^uⁿⁱ^t^y^assi^st^an^{ce (E}^S^F⁾^.
Foreign Aid Restrictions. Many U.S. sanctions on the PRC in response to the
Tiananmen military crackdown in 1989 remain in effect, including some foreign aid-
related restrictions, such as “no” votes or abstentions by U.S. representatives to
international financial institutions regarding loans to China (except those that meet basic⁷
human needs). The Foreign Operations Appropriations Act for FY2002 lifted the

⁷ Pursuant to Section 902 of the Foreign Relations Authorization Act of 1990-91 and Section
(continued...)

restrictions (effective since FY2000) requiring that ESF for China democracy programs
be provided only to NGOs located outside the PRC. Tibet programs are still restricted to
NGOs. Congress has required that U.S. representatives to international financial
institutions support projects in Tibet only if they do not encourage the migration and
settlement of non-Tibetans (the Han Chinese majority) into Tibet or the transfer of
Tibetan-owned properties to non-Tibetans, which some fear may erode Tibetan culture
and identity.
The U.S. government suspended funding for the United Nations Population Fund
(UNFPA) in 2002 because of the UNFPA’s programs in China, where the State
Department determined that coercive family planning practices had occurred. The
Consolidated Appropriations Act, FY2008 makes funds available again to the UNFPA,
if they are determined to be eligible under the terms of the Kemp-Kasten amendment^,but
forbids such funds from being used for any UNFPA programs in China.⁸
Key Actors
Bureau of Democracy, Human Rights, and Labor. In the past decade,
Congress has supported increased funding for DRL’s Human Rights and Democracy Fund
(HRDF). Appropriations for HRDF grew from $13 million in FY2001 to $71 million in
FY2007 (a total of $261 million between 2001 and 2007). In addition, the U.S.
government provided a total of $65 million for National Endowment for Democracy
(NED)-administered HRDF programs between 2003 and 2007. China programs account
for about 25% of allocations from the Democracy Fund. Most DRL funding to China
goes to U.S.-based NGOs, including universities, while some sub-grants go to PRC⁹
“partner NGOs.”
National Endowment for Democracy. The National Endowment for
Democracy is a private, non-profit organization that promotes democracy around the
world. NED was created by and obtains nearly all of its funding from the United States
government. The Endowment’s China programs receive grants through three channels:
the annual foreign operations earmark for NED — the “core fund” — ($50 million in
FY2007), out of which approximately $2 million is devoted to China programs each year;
the annual congressional earmark for democracy-related programs in the PRC ($2.9

⁷ (...continued)
710(a) of the International Financial Institutions Act. For further information, see CRS Report
RL31910, China: Economic Sanctions, by Dianne E. Rennack.
⁸ The “Kemp-Kasten” amendment to the FY1985 Supplemental Appropriations Act (P.L. 99-88)
bans U.S. assistance to organizations that support or participate in the management of coercive
family planning programs. For further information, see CRS Report RL33250, International
Population Assistance and Family Planning Programs: Issues for Congress, by Luisa
Blanchfield.
⁹ For a listing of HRDF projects, see U.S. Department of State, Bureau of Democracy, Human
Rights, and Labor, HRDF Projects, 1998-Present [http://www.state.gov/g/drl/c12440.htm].
Because of political sensitivities, DRL does not disclose the names of its grant recipients.

million to NED in FY2007); and DRL grants to NED’s “core institutes.”¹⁰ During the
FY1999-FY2003 period, about 38% of U.S. government funding for democracy-related
programs in China was allocated through the Endowment.¹¹ NED began awarding grants
to U.S.-based organizations supporting democracy in China in the mid-1980s and funded
significant in-country programs in the 1990s (worth nearly $20 million). Through its
grant-making program and core institutes, NED supports pro-democracy organizations
in the United States and Hong Kong, helps to advance the rule of law, promote the rights
of workers and women, and strengthen village elections in China, and assists in the
development of Tibetan communities.¹²
Selected U.S.-Funded Programs
Rule of Law. Since 2001, the State Department and USAID have provided $12
million for the Temple University rule of law program in China, launched in 1999 in
collaboration with Tsinghua University in Beijing and two U.S. partners or sub-grantees¹³
— New York University and Brigham Young University. Temple University’s Master
of Laws (LLM) program in China is the first and only of its kind, educating over 600
Chinese legal professionals, the majority of whom are officials in the executive (State
Council), legislative, and judicial branches of government.¹⁴ In 2006, USAID
administered a grant of $1.1 million for a rule of law program bringing together two U.S.
universities (University of the Pacific and American University) and three Chinese
universities. Since 2002, the American Bar Association (ABA) has conducted several
rule of law programs in China with the support of USAID, including the China
Environmental Governance Training Program and the China Legal Aid project.
Office of American Schools and Hospitals Abroad (ASHA). During the
past eight years, USAID’s ASHA has supported the construction and equipping of the
Center for American Studies at Fudan University in Shanghai. ASHA has also assisted
the Hopkins-Nanjing Center for Chinese and American Studies in Nanjing and provided
a grant to Project Hope to support training for the Shanghai Children’s Medical Center.

¹⁰ NED’s core institutes or grantees are: the International Republican Institute (IRI); the
American Center for International Labor Solidarity (ACILS); the Center for International Private
Enterprise (CIPE); and the National Democratic Institute for International Affairs (NDI).
¹¹ General Accounting Office, “Foreign Assistance: U.S. Funding for Democracy-Related
Programs,” February 2004.
¹² Eric T. Hale, “A Quantitative and Qualitative Evaluation of the National Endowment for
Democracy, 1990-1999” (Ph.D. dissertation, Louisiana State University, 2003), pp. 173-4. For
a listing of NED projects, see National Endowment for Democracy, Grants — 2005 Asia
Programs.
¹³ DRL supports eight U.S. universities conducting rule of law programs in China.
Approximately 150 U.S. law schools operate programs in China, mostly offering courses and
short-term programs for American students to study PRC law; about one dozen U.S. law schools
have developed exchange programs. See National Committee on United States-China Relations
at [http://www.ncuscr.org].
¹⁴ Temple University Beasley School of Law, Rule of Law Projects in China: 2005-06 Annual
Report; Adelaide Ferguson, Temple’s Rule of Law Programs in China, March 2006.