What on earth is going on downstairs?

That's The question everyone should be asking about China's ties with Africa. International aid to Africa, and the way it is being reported in the media, remains controversial. When the British government announced recently that it would cut off aid to South Africa in 2015, choosing instead to base its future relationship with the country on trade rather than aid, it was met by a furious reaction from the South African government. This step was interpreted by some as related to South Africa's inclusion in the BRICS bloc of emerging economies and closer ties to China.

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Abstract

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.

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