Does Chinese FDI Improve Views of China among Citizens in Africa? (Pre-Recorded)

• In Event: Economic Attitudes and Perceptions

Abstract

Chinese Foreign Direct Investment (FDI) to Africa is quickly becoming a centerpiece of China’s approach to promoting development overseas. To this point, however, little is known about the extent to which those investment projects inspire popular support for China’s approach to development in Africa, or whether Chinese FDI invites skepticism and concern among community members in the region. Numerous studies consider the effects of Chinese foreign aid in Africa, and of the influence of China’s presence at the national level. Chinese FDI is likely to have distinct effects on individuals, however, as a result of perceived job creation as well as fears regarding resource exploitation. This study thus seeks to understand how living in proximity to Chinese FDI projects affects individual-level perceptions of China’s approach to development in Africa.

To address the research question, we geolocate 200 Chinese investment projects, and we spatially connect those data to responses from over 35,000 georeferenced survey respondents across 21 countries. By comparing responses from those living near operational Chinese FDI projects to responses from those living near eventual locations of Chinese investment but where no project yet exists at the time of the survey, we determine the proximity effects of Chinese FDI on views of the China model of development while accounting for the potential nonrandom location of those investment projects. The findings indicate that, on average, living near Chinese FDI projects reduces support for China’s approach to development. Furthermore, specific types of FDI projects evoke distinct evaluations of China’s presence. For example, respondents living near manufacturing projects view infrastructure development as a positive contribution from China, whereas those living near resource-related projects express concerns about Chinese land grabs and job threats. These results suggest that people living in close proximity to Chinese FDI projects in Africa are swayed less by global development narratives than by how those projects shape their everyday lives and experiences.

The study is the first that we are aware of to connect Chinese FDI projects to individual-level preferences with this degree of geographic precision. We also add theoretical insight regarding the ambiguity that has plagued previous studies, demonstrating that views of China may vary depending on the type of nearby project. From a practical perspective, the study suggests that African leaders’ embrace of Chinese investment may eventually prove costly in terms of political support. At a minimum, political decision-makers may learn to exercise greater measures to combat the adverse popular effects of particular types of Chinese investment, even as they facilitate the positive aspects of Chinese manufacturing, resource, and service projects.

Authors

• Margaret M. Pearson, University of Maryland

• Xiaonan Wang, University of Maryland-College Park