Chinese development aid to Asia: Size and motives

Abstract

This research note empirically examines China’s development assistance to Asia, a region critical to China’s geostrategic ambition, from 2000 to 2014. It uses AidData’s Global Chinese Official Finance Dataset, one of the most reliable publicly available data sources on Chinese aid, which systematically collects and classifies different types of China’s official development finance. It is found that, despite a recent surge, China’s development assistance to Asia remains highly limited compared to that of Japan, Asia’s top donor, and that the economic sectors of energy, transport, and mining dominate financial flows. Econometric analysis results suggest that China’s aid allocation in Asia is influenced by its export relations, but, more importantly, that foreign policy considerations do not play a significant role, which is in contrast to the findings of recent work on Chinese aid to Africa. The results suggest that better measures may be needed to properly capture China’s strategic interests in Asia, including its involvement in the territorial dispute in the South China Sea.