By politics.co.uk staff
Britain should pay China £40 million after its aid programme agreement ends in 2011, MPs have recommended.
A new report accepts that the Department for International Development's (DfID) aid partnership should end as planned in two years.
But despite acknowledging that China is a middle income country with significant financial reserves, the international development select committee wants the funding relationship to continue.
It is recommending that DfID supplies China with £10 million annually from 2012 to 2015 towards specific projects to ensure Millennium Development Goals are met.
Sixteen per cent of China's population still lives in poverty, equal to one-third of impoverished people in sub-Saharan Africa.
Just under half of China's population has no access to basic sanitation and a quarter lack clean drinking water, the committee notes.
Affordable healthcare is beyond the reach of many and HIV/AIDS is spreading fast among vulnerable groups. Millions of people have been pushed into poverty by the May 2008 earthquake in Sichuan and the global financial crisis.
The report has already come under fire from the Conservatives, who, by their own admission, usually support the recommendations of the committee.
"China spent £20 billion hosting the Olympics, has an ambitious space exploration programme, and is sitting on foreign exchange reserves of almost $2 trillion," said shadow international development secretary Andrew Mitchell.
"Britain's direct aid to China should end. We should continue a strong development partnership based on dialogue, advice and skill sharing, and keep DfID staff in Beijing, but direct donations should be stopped.
"British taxpayers need to know that their aid money is helping the poorest people in the world, not going to countries which have enough money to tackle poverty themselves."
Malcolm Bruce, the committee chairman, said DfID's work in China was "not yet complete".
"Despite recent rapid growth, there is still substantial poverty in China. The global financial crisis and the 2008 earthquake have exacerbated existing poverty," he said.
"We believe it would be wrong for DfID to risk [losing hard-won relationships with Chinese government], just four years before the 2015 Millennium Development Goal deadline."
In response, the department itself told inthenews.co.uk it welcomed the review of its work in China.
"Our projects have helped reduce extreme poverty and improved access to basic services like decent health care, water supplies and education," a spokesperson said.
"Although our funding is planned to end in 2011, we will continue to work closely with China to make sure they have the tools and expertise they need to tackle poverty across the country as well as meeting new challenges, such as climate change."