Critics Question U.S. Aid to China Amid Debt Woes

With America still drowning in debt, critics in and outside of Congress say it’s time to reassess U.S. foreign aid -- especially to China.

"We started looking at the contracts and it was rather amazing that the No. 1 recipient of these taxpayer dollars were Chinese-state owned corporations," said Sen. Jim Webb, D-Virginia, referring to $320 million dollars worth of U.S. government contracts let to China. "I think we can take a good hard look where we're giving foreign aid."

The U.S. provided $47 million in "development aid" to China in 2010, even though the nation is already a military and economic giant and the world's only other true superpower.

The aid helped rural Chinese get on the Internet and improve public infrastructure - including metro train service in Guangzhou. Much of the aid is also channeled through the U.S. National Institutes of Health.

"Here we are sending money to a nation that we are diametrically opposed to in a time when America is broke," said Andrea Lafferty, of the Traditional Values Coalition. "People are losing their homes and jobs, so why are we giving money to China?"

The Traditional Values Coalition completed a lengthy analysis of NIH funding to China. It found U.S. taxpayers foot the bill for Chinese students to study retirement in Beijing, reproduction in Shanghai and prostitution in the Yunnan Province. The NIH also gave American university professors' millions to study in China, from why children lie to why the Chinese smoke tobacco.

"We are calling for a moratorium for all behavioral science and foreign aid grants out of NIH until some adult can oversee what is going on and monitor the craziness out of there," said Lafferty.

Webb and Sen. James Inofe also say it is time to cut China off from the taxpayer gravy train. Both the United Kingdom and Australia announced earlier this year they would no longer provide direct assistance to China.

Clayton Dube, director of the U.S.-China Institute at the University of Southern California, offers a different view.

"These grants serve the goal of bringing together American scientists and Chinese scientists and that is very useful. American education benefits. American science advances through that process," Dube said.

Dube admits some NIH grants sound unreasonable, but is not willing to say they're without value. The best example, he says, may be the Peace Corp. The U.S. spends $4.7 million annually on the Peace Corp. in China even though Chinese officials restrict them to teaching English.

"In many ways our Peace Corp. volunteers, our young people are our best ambassadors, our best representatives," Dube said. "Their warmth, energy and good humor, and curiosity come across. If you look at what ordinary people think and feel about the United States, it definitely has an impact"

Dube says exchange programs benefit the U.S., as everyday Chinese citizens develop opinions about America outside China's state-controlled media. Auditors complain, because of Chinese restrictions, U.S. taxpayers aren't necessarily getting their money's worth.

"Some policy analysts argue that U.S. democracy, rule of law and related programs had little effect in China due to political constraints and restrictions" imposed by the Chinese government, a Congressional Research Service analysis found in April 2011.

U.S. taxpayers spent $17 million on democracy efforts in 2010.