Is Chinese aid different?. (August 2022)

• Record Type: Journal Article
• Authors: Hoeffler, Anke; Sterck, Olivier
• Is Part Of: World development. Volume 156(2022)
• Publication Date: 2022-08
• Subjects: F35 -- H84 -- O11; ODA -- China -- Allocation -- Commitments; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2022.105908
• Languages: English
• ISSNs: 0305-750X

Abstract

Highlights: In this paper we examine Chinese aid allocation and contrast it to allocation patterns of the five largest DAC donors. A common premise is that aid is guided by donors' commercial interests. We find strong support for this premise for Western donors, but not for Chinese aid. The most important determinant of Chinese aid is the refusal of the recipient to recognize Taiwan. We find that China allocates more aid to poorer countries, as does the UK, the US, Japan, and Germany. Aside from Taiwan recognition, we conclude that the drivers of China's aid allocation are comparable to those of the large five DAC donors. Abstract: China's involvement in African countries has been criticized for being guided by self-interest rather than recipient need or merit. For the period 2000–2012, we compare China's aid allocation behaviour to that of the five largest donor countries globally: France, Germany, Japan, the UK, and the USA. We use regression analysis and a rigorous variance decomposition method to measure the importance of various factors in predicting aid commitments. We find that donors differ markedly in how they allocate aid. While Germany, Japan, the USA, and the UK assign high importance to recipient need, France's and China's allocation models are, for a large part, driven by variables that relate to self-interest: trade in the case of France, and the adherence to the "One-China policy" in the case of China. However, China is not a purely selfish donor. As most Western donors, China commits more aid to poorer countries. Furthermore, we find no evidence that commercial interests, such as trade or access to natural resources, determine Chinese aid allocation. This latter result contrasts with Western donors, which allocate more aid to their trade partners. France and the UK also commit significantly more aid to their former colonies. In conclusion, the claim that China's aid allocation is different must be qualified.