The Economic Consequences of China's Economic Assistance

In the last two decades, Chinese aid projects have figured prominently in China’s expanding influence across the globe. We examine the economic consequences of Chinese aid with a primary focus on Chinese exports to recipient countries. By leveraging multiple data sources, we empirically show that Chinese aid projects lead to a substantial surge of Chinese exports to aid recipient countries. Perhaps more importantly, we also provide evidence that industries in which China had a comparative disadvantage and low-performing state-owned firms benefited disproportionally from the opening market of aid recipient countries. The findings suggest that Chinese aid gives rise to economic distortions by allocating resources to less efficient industries and firms, thereby to some extent casting doubt on the sustainability of China’s aid practice in the long term.    

Dong Zhang received his doctorate in political science from Northwestern University. He was a Shorenstein Postdoctoral Fellow in contemporary Asia at the Walter H. Shorenstein Asia-Pacific Research Center of Stanford University. He holds bachelor’s degrees in public policy and economics, and a master’s degree in public policy from Peking University, Beijing. His research interests include political economy of development, authoritarian politics, corruption and governance. His work has appeared in Comparative Political Studies, Journal of Politics, Public Administration Review, Word Development, among others.
Speaker(s) Prof Dong ZHANG
Assistant Professor, Dept of Political Science, Lingnan University
Date 1 Feb 2021 (Monday)
Time 3:00 pm
Venue Online via Zoom(link will be sent via email)

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