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The Political Economy of China's Aid Policy in Africa

Author

Listed:
  • 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 Economics Research Papers 2007-051, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2007-051
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    Citations

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    Cited by:

    1. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Chinese aid and local corruption," Journal of Public Economics, Elsevier, vol. 159(C), pages 146-159.
    2. Liu, Ailan & Tang, Bo, 2018. "US and China aid to Africa: Impact on the donor-recipient trade relations," China Economic Review, Elsevier, vol. 48(C), pages 46-65.
    3. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Racing to the bottom? Chinese development projects and trade union involvement in Africa," World Development, Elsevier, vol. 106(C), pages 284-298.
    4. Hernandez, Diego, 2015. "Are “New” Donors Challenging World Bank Conditionality?," Working Papers 0601, University of Heidelberg, Department of Economics.
    5. 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.
    6. Hernandez, Diego, 2017. "Are “New” Donors Challenging World Bank Conditionality?," World Development, Elsevier, vol. 96(C), pages 529-549.

    More about this item

    Keywords

    China; Africa; development aid; political economy;
    All these keywords.

    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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