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Foreign aid is a salient component of China’s diplomacy. In recent years, China has gradually become a prolific donor and has attracted extensive international attention. In 2018, the Chinese government established the China International Development Cooperation Agency (CIDCA) as a specialized agency to manage its outgoing foreign aid, which represents China’s determination to reform its foreign aid system further. This paper analyzes the factors leading to the establishment of CIDCA and presents a comprehensive evaluation of its impacts on China’s foreign aid. It argues that CIDCA is a product of the internal and external pressures faced by the Chinese government. The agency exerts a multifaceted influence on, institutionalizes the characteristics of, and alleviates the problems existing in China’s foreign aid. However, CIDCA is not a panacea for Chinese aid because it has not completely solved existing problems. Thus, CIDCA is an initial step in the right direction. As such, its future influence and effectiveness require further observation.
