https://orcid.org/0000-0003-3567-9060
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Abstract
Over the past two decades, the number of Chinese workers sent overseas to complete engineering and construction projects has increased significantly along with the expanding role of Chinese companies in foreign countries, including low- and middle-income states with large populations. Yet, there has been little systematic analysis of this phenomenon. This article hypothesizes that differences in the strategies adopted by governments in democratic and non-democratic countries to boost performance-based legitimacy claims make the latter more willing to allow Chinese companies to bring Chinese workers. Statistical analysis of a new global country-year panel dataset from 2004 to 2019 and two case studies of Algeria and Ghana support this hypothesis. This article points to the importance of host regime type in shaping China’s human presence overseas, and prompts important considerations on the political consequences of job creation around (Chinese) infrastructure projects and the economic impact of Chinese workers in foreign countries.
Acknowledgements
A number of people helped us during our research and contributed to improve this manuscript. First of all, we wish to thank our research assistants, Ms. Guan Hang and Ms. You Shumin. They helped us to complete the collection of the data used in this study. They worked hard and we are very proud of them. We also must thank (in alphabetical order) Prof. Alexander Dukalskins, Prof. Thierry Pairault, and Prof. Yahia Zoubir. They provided important feedback during the drafting and revision of this study. Naturally, we also wish to thank the editorial team of RIPE and the three anonymous reviewers for helping and guiding us with their comments and and suggestions during the review process.
Disclosure statement
The authors report there are no competing interests to declare.
Notes
1 The limits of this literature are represented by the works of Camba et al. (Citation2021) and Yoon Ah Oh (Citation2018). Both studies rely on a small number of South East Asian cases. While Camba et al. argue that the host political system plays a key role in shaping if and how Chinese projects take place, Oh believes that widespread anti-Chinese sentiment in the region makes democratic and autocratic governments equally vulnerable to popular discontent caused by Chinese economic/aid projects. It is evident, therefore, that a different, large-n, approach is needed.
2 For example, Wang et al. (Citation2022) show how gaps between expectations about new jobs and actual jobs created by Chinese projects cause problems for political leaders in Africa. Relatedly, McCauley et al. (Citation2022) highlight the role of concerns about effects on local employment in shaping African views on Chinese investment projects. However, how those effects vary across regime type does not feature in these analyses.
3 Previous studies find that Chinese aid and transfer of weapons do not increase the chances of autocratic survival. Only trade exports to China appear to do so (Bader, Citation2015b).
4 Alden and Aggad-Clerx (Citation2012) write about the complex role played by Chinese companies in local employment, pointing out that Chinese workers may take jobs that their local counterparts are reluctant to do. Other times, Chinese companies do not create the type of jobs that the local population would like, or for which there is an excess of manpower.
5 Chinese companies are hostile to unions and often ask local governments to consent them to pay the workers below the legal minimum wage and/or make them work longer hours then what local laws would otherwise allow (Halegua & Cohen, Citation2019).
6 The descriptive statistics in this paragraph are based on the countries included in the panel in the quantitative analysis below. Some countries and territories for which the yearbooks record data are excluded, either because they are not sovereign states (such as the Canary Islands, Hong Kong, Macao and Taiwan) or because they underwent major territorial changes during the time period in question (such as Serbia, Sudan, and South Sudan).
7 The index ranges from −10 (hereditary monarchy) to +10 (consolidated democracy). For ease of interpretation, we invert the index by multiplying by negative one, so that a positive coefficient indicates that less democratic states have more Chinese workers.
8 These categories and ranges are recommended by the Center for Systemic Peace.
9 We use the natural logarithm of contract values. As there are a large number of observations for which the value is ‘0’, to avoid losing these observations we first add one to the original value before log transformation.
10 The year dummy results are not shown in the results tables for presentational ease, but are available from the authors on request.
11 All explanatory variables except contract value lagged by one year. Population is natural logarithm. Contract values are natural logarithm of original value plus one. Results for year dummies not shown for presentational ease.
12 The reference category for the regime type categorical explanatory variable in Model 2 is ‘democracy’.
13 We use two-step difference-in-difference GMM.
14 It is important to highlight, however, that local merchants are also involved in the import of Chinese goods, often counterfeit products.
15 The lower cost of Ghanaian workers is another key reason why Chinese companies in Ghana seek to localize (Kernen & Lam, Citation2014). However, our quantitative results suggest the pressure to hire locally is greater in more democratic countries controlling for GDP per capita of the host country (a proxy for local wages).
16 Chinese official sources, such as those used by Bader, state that turnover is simply understood as the quantification in RMB of the work completed by Chinese contractors during a certain year (Department of Trade and External Economic Relations Statistics, PRC National Bureau of Statistics, Citation2008, p. 801).
17 All explanatory variables except contract value lagged by one year. Population is natural logarithm. Contract values are natural logarithm of original value plus one. Results for year dummies not shown for presentational ease.
Additional information
Notes on contributors
Andrea Ghiselli
Dr. Andrea Ghiselli is an Assistant Professor at the School of International Relations and Public Affairs of Fudan University, and the head of research of the TOChina Hub’s ChinaMed Project. His research revolves around Chinese foreign policy. He is the author of Protecting China’s Interests Overseas: Securitization and Foreign Policy, published by Oxford University Press in 2021.
Pippa Morgan
Dr. Pippa Morgan is a Lecturer in Political Science at Duke Kunshan University. Her research focuses on international and comparative political economy, China’s foreign economic relations, and China-Africa relations. She is the author of China’s COVID-19 Vaccine Supplies to the Global South: Between Politics and Business, published by Bristol University Press in 2022.