The Environmental Footprint of China-Africa Engagement

Abstract

China has strategically engaged with African countries through different routes. However, the growing presence of China in Africa has attracted a lot of praise and criticism. As a leader in smart technology, China may fill the technological gaps in Africa, which improve the environment. Conversely, China may be exploiting natural resources and rapidly deteriorating the environment. Therefore, in this paper, we examine the impact of different routes of the China-Africa relationship on the environment. Using Fully Modified Ordinary Least Square (FMOLS) model on data from 50 African countries, we find that different Chinese activities affect the environment differently. We find a positive relationship between construction revenue and carbon emission, suggesting that China's construction activities negatively affect the environment. Similarly, export increases carbon emission and harms the environment. However, we find a negative relationship between importation from China and carbon emissions, implying a positive environmental footprint by China in Africa. In the case of foreign direct, the results show that foreign direct investment improves the environment, and the relationship is stronger in non-resource countries. Given that most exports from Africa are natural resources, our results imply that African non-resources-rich countries are likely to benefit from China's large investment in cleaner energy in the long-run, especially after the construction of the infrastructures. Our findings highlight the potential environmental risks associated with the different routes of China partnership with African countries.