Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence – Foreign Policy Research Institute

A nation must think before it acts.
This study investigates the impact of Chinese economic engagement in Africa (FDI and loans from China to African countries) on African countries’ international political alignment as evidenced by voting patterns in the UN General Assembly. We find three seasons of Chinese policy in Africa. Pre 2008, Chinese economic engagement in Africa was driven primarily by economic considerations, market seeking for FDI and likely resource seeking for loans. During the Great Recession, China came to terms with its rise as an economic power and thus started leveraging its economic power in international relationships. During this season, both Chinese FDI and loans were no longer driven by economic considerations but rather by international relations which led to increased political alignment with recipient African countries. The final season captured the Xi Jinping era beginning 2013. During this season, Chines FDI had no effect on African countries’ foreign policy alignment with China, but Chinese loans still had a significant positive effect. This likely reflects a movement away from FDI to less transparent bilateral loans as a means of utilizing Chinese economic power to influence foreign policy. During the entire period of the study, Chinese FDI to Africa resulted in reduced political alignment between African countries and the United States.
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The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
Carla D. Jones is a Templeton Fellow in FPRI’s Africa Program and an Associate Professor in the Management, Marketing & IS department of the College of Business at Sam Houston State University.
Mengge Li is a Templeton Fellow in FPRI’s Africa Program and an Assistant Professor at University of Texas at El Paso, where he teaches international business and corporate strategy classes.
Dr. Hermann A. Ndofor, a Templeton Fellow in the Africa Program, is currently a faculty member at the Kelley School of Business, Indiana University and Associate Editor for the Africa Journal of Management.
Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence
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