Charity Begins at Home: The Domestic Political Economy of Chinese Foreign Aid

How does China’s domestic political economy shape its aid practices? We contend that the logic of regime survival drives China’s aid policies to prioritize commercial interests and sustain the state capitalism model. By leveraging multiple data sources, we conduct our analysis at the country, industry, firm, and product levels. We empirically document that Chinese aid projects lead to a substantial surge of Chinese exports to aid recipient countries, generating large revenues primarily for Chinese state-owned enterprises (SOEs). In particular, the aid-induced trade benefits are concentrated among SOEs with low performance and large employment.

Dong Zhang is an Assistant Professor in the Division of Social Science. He received his doctorate in political science from Northwestern University. He was a Shorenstein Postdoctoral Fellow in contemporary Asia at Stanford University.  His research interests include comparative political economy, international political economy, and authoritarian politics. His work has appeared in Comparative Political Studies, Journal of Politics, Public Administration Review, Review of International Political Economy, among others.