Does Chinese FDI in Africa inspire support for a china model of development

PurposeChina's Belt and Road Initiative (BRI) is the most ambitious investment strategy for infrastructural development belonging to the significant potential for stimulating regional economic growth in Asia, Europe and Africa. This study aims to investigate the impact of infrastructure on spurring inward foreign direct investment (FDI) within the purview of human capital, GDP per capita, foreign aid, trade, domestic investment, population and institutional quality in BRI countries.Design/methodology/approachIn doing so, the authors analyze panel data from 2000 to 2019 within the framework of the system generalized method of movement (GMM) approach for 66 BRI countries from Europe, Asia, Africa and the Middle East.FindingsThe investigated results demonstrate that aggregate and disaggregate infrastructure indices, e.g. transport, telecommunications, financial and energy infrastructures, are the driving forces in attracting foreign direct investment (FDI) in the BRI countries. In addition, control variables (i.e. institutional quality, human capital, trade, domestic investment, foreign aid and GDP per capita) play an essential role in spurring FDI inflows.Originality/valueThe authors’ study uniquely investigates both the pre- (2000–2012) and post- (2013–2019) BRI scenarios using the aggregate and disaggregate infrastructural components from the perspectives of full and clustered sample regions, such as Asia, Europe, Africa and the Middle East. The study provides several policy implications.

Does infrastructural development allure foreign direct investment? The role of Belt and Road Initiatives

Abstract Is there any possibility that foreign aid may negatively affect African social ties? To answer such a question, this paper examines the impact of local Chinese aid projects on social capital in Africa. China or Chinese contractors directly control or operate Chinese projects in Africa. This feature may disengage Africans from participating in their own local development activities. Likewise, China gives unconditional aid, which may nurture corruption. By creating losers and winners, corruption may make people unhappy. Because of these features, Chinese aid projects may hinder the formation of social capital. This paper puts this claim to an empirical test using data from the Afrobarometer surveys and AidData. Conditional on a set of controls, I find several interesting results. First, Chinese aid is negatively associated with generalized trust. Second, Chinese aid projects are related to disengagement from associational life. Third, no similar pattern is found when the main analysis is replicated on aid from the World Bank. Finally, neither the Chinese nor the World Bank’s aid is related to subjective wellbeing. The results suggest that Chinese aid may wither local social ties through social disengagement. Overall, the findings imply that it is vital to engage local citizens in the design and implementation of Chinese aid projects.

https://doi.org/10.1080/23322039.2023.2196843

Chinese aid and social ties in Africa: Evidence from sub-national aid projects

Building legitimacy? The role of Chinese contract workers in foreign regimes’ political strategies

China's contemporary political economy features an emboldened role for the state as owner and regulator, and with markets expected to act in the service of party-state goals. How has the relationship between the state and different types of firms evolved? This Element situates China's reform-era political economy in comparative analytic perspective with attention to adaptations of its model over time. Just as other types of economies have generated internal dynamics and external reactions that undermine initial arrangements, so too has China's political economy. While China's state has always played a core role in development, over time prioritization of growth has shifted to a variant of state capitalism best described as, “party-state capitalism,” which emphasizes risk management and leadership by the Chinese Communist Party (CCP). Rather than reflecting long-held intentions of the CCP, the transition to party-state capitalism emerged from reactions to perceived threats and problems, some domestic and some external. These adaptations are refracted in the contemporary crises of global capitalism.This title is also available as open access on Cambridge Core.


https://www.cambridge.org/core/services/aop-cambridge-core/content/view/621573281A601FF77F085386336A991D/9781009356749AR.pdf/the-state-and-capitalism-in-china.pdf

Xiaonan Wang

Papers

FDI, Unmet Expectations, and the Prospects of Political Leaders: Evidence from Chinese Investment in Africa

Does Chinese FDI in Africa inspire support for a china model of development