CNN — All aboard! The Chinese-funded railways linking East Africa
Near Africa's horn on the easternmost part of the continent, a shiny new electric railway runs alongside an old abandoned track through both arid desert and green highlands. Some 750 kilometres (466 miles) long, the $4 billion line connects landlocked Ethiopia to the Red Sea coast in Djibouti. Like a number of other planned lines, it was partly funded and built by Chinese companies.
Chinese “aid” is a lightning rod for criticism. Policy-makers, journalists, and public intellectuals claim that Beijing uses its largesse to cement alliances with political leaders, secure access to natural resources, and create exclusive commercial opportunities for Chinese firms—all at the expense of citizens living in developing countries. We argue that much of the controversy about Chinese “aid” stems from a failure to distinguish between China's Official Development Assistance (ODA) and more commercially oriented sources and types of state financing. Using a new database on China's official financing commitments to Africa from 2000 to 2013, we find that the allocation of Chinese ODA is driven primarily by foreign policy considerations, while economic interests better explain the distribution of less concessional flows. These results highlight the need for better measures of an increasingly diverse set of non-Western financial activities.