Apples and Dragon Fruits: The Determinants of Aid and Other Forms of State Financing from China to Africa

AidData Working Paper No. 15

32 Pages Posted: 17 Oct 2015  

Axel Dreher

University of Heidelberg

Andreas Fuchs

University of Heidelberg - Alfred Weber Institute for Economics

Bradley Parks

College of William and Mary

Austin M. Strange

Harvard University, Faculty of Arts and Sciences, Department of Government; College of William and Mary

Michael J. Tierney

College of William and Mary

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2015

Abstract

Chinese “aid” is a lightning rod for criticism. Policymakers, journalists, and public intellectuals claim that Beijing is using its largesse to cement alliances with political leaders, secure access to natural resources, and create exclusive commercial opportunities for Chinese firms — all at the expense of citizens living in developing countries. We argue that much of the controversy about Chinese “aid” results from a failure to distinguish between China’s Official Development Assistance (ODA) and more commercially-oriented sources and types of state financing. Using a new database on China’s official financing commitments to Africa from 2000-2013, we find the allocation of Chinese ODA to be driven primarily by foreign policy considerations, while economic interests better explain the distribution of less concessional forms of Chinese official financing. Our results suggest Beijing’s motives may not be substantially different from those shaping the allocation of Western official finance. Our data and findings also address the need for better measures of an increasingly diverse set of non-Western financial activities that are neither well understood nor systematically tracked by the Western-led regime for international development finance.

Keywords: Development Finance, Foreign Aid, Non-DAC Donors, China, Tracking Underreported Financial Flows

JEL Classification: F35, O19, O21

Suggested Citation

Dreher, Axel and Fuchs, Andreas and Parks, Bradley and Strange, Austin M. and Tierney, Michael J., Apples and Dragon Fruits: The Determinants of Aid and Other Forms of State Financing from China to Africa (October 15, 2015). AidData Working Paper No. 15. Available at SSRN: https://ssrn.com/abstract=2674601

Axel Dreher

University of Heidelberg ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Andreas Fuchs (Contact Author)

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

HOME PAGE: http://www.uni-heidelberg.de/fakultaeten/wiso/awi/professuren/intwipol/fuchs_en.html

Bradley C. Parks

College of William and Mary ( email )

No Address Available

Austin M. Strange

Harvard University, Faculty of Arts and Sciences, Department of Government ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States

College of William and Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

Michael J. Tierney

College of William and Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

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