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Development Aid

“Izandla ziyagezana” - “Hands Wash Each Other”

In particular, our regressions show that Chinese ODI is relatively more concentrated in
skill intensive sectors in skill-abundant countries, but in capital-intensive sectors in

capital-scarce countries. These patterns are mostly observed in politically unstable
countries, suggesting stronger incentives to seek profits in tougher environments. Finally,
the predominance of Chinese ODI in services appears to be related to the recipient

countries' natural resource abundance, which is also consistent with the profit-driven
nature of Chinese ODI.”

"Why Is China Investing in Africa? Evidence from the Firm Level." 458
Chen, Wenjie, David Dollar, and Heiwai Tang.
The World Bank Economic Review, (September 2016)
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“ We make use of various datasets, covering the 1956-2006 period, to empirically test to
which extent political and commercial interests shape China's aid allocation decisions.
We estimate the determinants of China's allocation of project aid, food aid, medical

teams and total aid money to developing countries, comparing its allocation decisions
with traditional and other so-called emerging donors. We find that political considerations

are an important determinant of China's allocation of aid. However, in comparison to
other donors, China does not pay substantially more attention to politics. In contrast to
widespread perceptions, we find no evidence that China's aid allocation is dominated by

natural resource endowments. Moreover, China's allocation of aid seems to be widely
independent of democracy and governance in recipient countries. Overall, denominating

aid from China as 'rogue aid' seems unjustified “
“Rogue Aid? The Determinants of China's Aid Allocation” 459
Axel Dreher, Andreas Fuchs
CESIFO WORKING PAPER NO. 3581, CATEGORY 2: PUBLIC CHOICE (SEPTEMBER 2011)
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China's investment in Africa is much like that of the United States and Europe.
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“ In other words, Chinese companies are abiding by global reporting standards; while

those standards might be faulty, Chinese investors are still abiding by global norms.
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Second, a Brookings study concluded that Chinese firms are no more likely to invest in
natural resources than firms from other countries, despite frequent accusations that the

country is hungry for those resources.
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