The Political Economy of China's Aid Policy in Africa

19 Pages Posted: 19 Oct 2007 Last revised: 2 Nov 2007

Date Written: August 22, 2007

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.

Keywords: China, Africa, development aid, political economy

JEL Classification: O16, O19, F35, F50

Suggested Citation

Pehnelt, Gernot, The Political Economy of China's Aid Policy in Africa (August 22, 2007). Jena Economic Research Paper No. 2007-051. Available at SSRN: https://ssrn.com/abstract=1022868 or http://dx.doi.org/10.2139/ssrn.1022868

Gernot Pehnelt (Contact Author)

University of Jena ( email )

Furstengraben 1
Jena, Thuringa 07743
Germany

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