Environmental Determinants of Chinese Development Finance in Africa

Abstract

To what extent are decisions regarding Chinese investment in Africa motivated by environmental factors? A considerable body of work has examined the determinants of foreign aid among traditional donors, producing useful debates about the relative significance of recipient need or merit and donor interest. But far less scholarly effort has focused on the motivations of emerging donors and the role of environmental factors in influencing aid allocation. In an attempt to fill these gaps, this article uses statistical techniques to test the hypothesis that China deliberately invests in African countries with poor environmental performance for reasons related to recipient need or donor interest. Drawing upon project-level data regarding investments made by China in Africa from 2002 to 2012, the analysis suggests that Chinese development assistance grows commensurate with a country’s environmental performance, but only to a point. After a state achieves a certain level of environmental quality, Chinese investments decline.