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The Political Economy of China's Aid Policy in Africa

Author

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  • Gernot Pehnelt

    () (School of Busniess and Economics, Friedrich-Schiller-University Jena, Germany.)

Abstract

In 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 China’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 China’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 People’s Republic, especially in unstable nations and "rough" states. China’s engagement in Africa causes some serious problems with traditional donors. We discuss these conflicts and provide a critical assessment of China’s role in Africa. Finally, we discuss the policy implications for the donor community.

Suggested Citation

  • Gernot Pehnelt, 2007. "The Political Economy of China's Aid Policy in Africa," Jena Economic Research Papers 2007-051, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-051
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    File URL: http://zs.thulb.uni-jena.de/receive/jportal_jparticle_00060876
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    Citations

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    Cited by:

    1. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2017. "Racing to the bottom? Chinese development projects and trade union involvement in Africa," Working Papers in Economics 699, University of Gothenburg, Department of Economics.
    2. repec:eee:wdevel:v:96:y:2017:i:c:p:529-549 is not listed on IDEAS
    3. Hernandez, Diego, 2015. "Are “New” Donors Challenging World Bank Conditionality?," Working Papers 0601, University of Heidelberg, Department of Economics.
    4. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2016. "Chinese aid and local corruption," Working Papers in Economics 667, University of Gothenburg, Department of Economics, revised Oct 2016.
    5. repec:eee:wdevel:v:106:y:2018:i:c:p:284-298 is not listed on IDEAS
    6. Furukawa, Mitsuaki, 2014. "Management of the International Development Aid System Aid System and the Creation of Political Space for China:The Case of Tanzania," Working Papers 82, JICA Research Institute.

    More about this item

    Keywords

    China; Africa; development aid; political economy;

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, 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, National Security, and International Political Economy - - - General

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