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Global AIDS Funding and China

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Today, we commemorate World AIDS Day. Over 5.2 million people are receiving lifesaving HIV treatment due to the combined efforts of the multinational Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria and the United States' President's Emergency Plan for AIDS Relief (PEPFAR). Sadly, the global economic recession threatens to undermine the impressive results achieved thus far in treating HIV/AIDS in resource-limited settings.

In October, the international donor community pledged $11.7 billion to the Global Fund for the years 2011-2013. However, the fund had hoped to raise $20 billion. The shortfall in donations will put at risk the 2015 goal to eliminate HIV mother-to-child transmission worldwide. Additionally, the lack of funds will result in "treatment rationing" for the nearly 10 million people worldwide that require medication immediately.

The raison d'être of the Global Fund was to provide funds and support to the hardest-hit countries that lacked the resources to address their epidemics. One would naturally think that countries with the highest disease burdens and poorest healthcare infrastructures, such as Haiti, Mozambique, and Zambia, would be the most likely recipients of aid. However, one of the largest recipients of Global Fund funding is the second largest economy in the world: China.

Since the inception of the Global Fund in 2002, China has received 14 grants totaling $941 million while only donating $16 million over the same period. In contrast, the United States donated $4 billion at the October donor conference.

Why is China receiving nearly a billion dollars in Global Fund aid?

Jack Chow, the former U.S. ambassador on global HIV/AIDS, was the first to describe this topic in the July issue of Foreign Policy. Mr. Chow explains that China is able to take advantage of these funds "because of a loophole." The Global Fund disburses aid based on national income relative to population. China is a lower-middle income country based on per capita estimates, despite being the second largest economy in the world, and thus eligible for Global Fund grants.

The claim that China needs Global Fund aid is duplicitous at best. China has ample money to commit to its domestic healthcare portfolio given its foreign currency reserves are in excess of $2.5 trillion. In 2008, China announced a $586 billion stimulus that included $27 billion towards healthcare and education. By accepting Global Fund aid, China has in de facto deprived poorer countries from obtaining critical funds towards medicines and improving healthcare infrastructure. Mr. Chow writes:

"The [nearly] $1 billion awarded to China could have been used by the poorest countries to distribute 67 million anti-malarial bed nets, 4.5 million curative tuberculosis treatments, or nearly 2 million courses of antiretroviral therapy for AIDS patients."

The challenges of raising money towards global health in the current economic milieu necessitate that the Global Fund change its eligibility process to prioritize allocating aid towards the neediest nations. There is no excuse for the second largest economy to continue to siphon this funding. Recipient countries, principally in sub-Saharan Africa, are unlikely to challenge Beijing given the role China has on the African continent as the leading investor, creditor, and donor.

The United States needs to take the lead on this issue. We urge the United States delegation to the Global Fund to raise this issue at the next Global Fund board meeting scheduled for December 13-15 in Sofia, Bulgaria. Additionally, President Obama should discuss this matter with Chinese President Hu Jintao at his upcoming state visit to the White House in January.

China must recognize its new role on the world stage as a donor, rather than a recipient, of foreign aid.

Anand Reddi is at the University of Colorado School of Medicine and a member of the board of directors of the AIDS Healthcare Foundation. Michael Weinstein is the president of the AIDS Healthcare Foundation.

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