The Political Economy of China's Aid Policy in Africa
AbstractIn recent years, China has become a major power on the African continent, not only with respect to trade and investment, but also as a donor of development aid. Although there is no accurate measure of the exact size of Chinaâ€™s aid program, since China rather underestimates the volume in official statistics, estimates on the basis of press releases, official announcements and assessments of major projects in Africa suggest that China has already overtaken the World Bank in lending to Africa. In this article, we analyze Chinaâ€™s aid policy in Africa from a political economy perspective. We show that China is using (tied) aid and loans in order to reach specific economic and political goals and that Beijing has been quite successful in doing so. The impressing success of China in getting access to African countries can be explained by comparative advantages of the Peopleâ€™s Republic, especially in unstable nations and "rough" states. Chinaâ€™s engagement in Africa causes some serious problems with traditional donors. We discuss these conflicts and provide a critical assessment of Chinaâ€™s role in Africa. Finally, we discuss the policy implications for the donor community.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-051.
Date of creation: 22 Aug 2007
Date of revision:
China; Africa; development aid; political economy;
Find related papers by JEL classification:
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- F35 - International Economics - - International Finance - - - Foreign Aid
- F50 - International Economics - - International Relations and International Political Economy - - - General
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-08-27 (Africa)
- NEP-ALL-2007-08-27 (All new papers)
- NEP-CNA-2007-08-27 (China)
- NEP-DEV-2007-08-27 (Development)
- NEP-PPM-2007-08-27 (Project, Program & Portfolio Management)
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