By Brad Parks, Vijaya Ramachandran and Austin Strange
China’s development finance activities provoke strong reactions—both positive and negative. But they remain poorly understood. China says that it now provides $6.4 billion in aid per year (or 0.07 percent of its gross domestic product), roughly half of which goes to Africa.
Yet scholars, policy analysts, and journalists who study the distribution and impact of Chinese development finance lack reliable data that can be used to subject different claims and hypotheses to empirical scrutiny.
This dearth of information has fueled suspicion of Beijing’s motives and limited the types of questions that can be answered about Chinese development finance.
Do the Chinese target the areas of greatest human need? Or are their objectives more political? What impact does Chinese aid have on environmental outcomes? Does Chinese development finance threaten debt sustainability in African countries? What motivates the provision of Chinese aid?
It is difficult to answer these questions without good data. Yet the absence of reliable country-level or project-level data has not deterred analysts and commentators from expressing strong opinions about the effectiveness and the drivers of Chinese development finance to Africa.
Some claim that Chinese aid is motivated primarily by the need for natural resources. Others assert that China is propping up “rogue states” with corrupt governments and poor human rights records. Still others charge that an influx of non-concessional Chinese loans is beginning to unravel hard-won debt sustainability gains achieved over the last decade.
On the other end of the spectrum are analysts who claim that China’s motives are benign and that Beijing has a track record of delivering tangible and quick results in sectors neglected by Western donors.
The problem is that most of the conclusions rest on individual case studies and journalistic accounts. It’s tough to know if these conclusions are generally true or only applicable to the cases being analyzed.
There have been ad hoc attempts to estimate how much development finance China is pumping into Africa, but most of these initiatives have been plagued by double counting, imprecise definitions of what constitutes ‘aid’ and ‘development finance,’ and a failure to follow projects from announcement to implementation. And few of these studies disclosed their methods or sources, effectively short-circuiting the process of scientific inquiry.
AidData is attempting to address this problem by maintaining a public, interactive data platform that centralizes project-level information on China’s development finance activities and other financial flows to Africa using media-based methods.
Announcements in the media are triangulated with other sources such as government documents to estimate the number and value of projects announced, implemented, and completed, and the types of financing used for these projects. Our dataset, methodology, and working paper — launched on April 29th at a Center for Global Development event — are publicly available.
With the launch of this online database platform, our goal is not to weigh in on the big debates about Chinese development finance. Instead, we are seeking to build a strong empirical foundation that can support a wide variety of researchers, policymakers, development practitioners, advocacy groups, and journalist who are interested in tracking and analyzing the allocation and impact of Chinese development finance in Africa.
We acknowledge that our data and methods are not perfect. The purpose of our project is to crowdsource information, which in turn will help us refine the methodology and improve the quality of the database. Even in the few days following the launch of this database, we have made significant improvements based on new sources of information from Chinese aid experts and in-depth reporting from media outlets.
The China-Africa relationship is changing the rules of the game in development finance. We have a shared interest in better understanding the nature, distribution, and effects of Chinese development finance in Africa, and around the world.
Brad Parks is the Co-Executive Director of AidData at the College of William & Mary. Vijaya Ramachandran is a Senior Fellow at the Center for Global Development. Austin Strange is a Research Associate at AidData.
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