China’s Aid to Africa and Dual Marginal of Recipient Countries’ Exports

ABSTRACT

This paper research the impact of China’s aid to Africa on the products export to China of recipient countries by decomposing the export growth into extensive and intensive margins. Studies have proved that China’s aid to Africa contributes to the growth of export to China of recipient countries, and the growth of export of products is reflected in the extensive margin. Next, we also use a series of robustness tests to prove the robustness of the researched results in this paper. At the same time, we use the interaction term of China’s fiscal expenditure data and the number of China’s aid to Africa as an instrumental variable to eliminate the potential endogenous problems. Finally, the results of mechanism test show that China’s aid to Africa will promote the growth of product export and the dual marginal growth of product export by improving the infrastructure of recipient countries and enhancing the industrialization level of recipient countries. In addition, China’s aid to Africa shows that China’s efforts to shoulder its role as a responsible power in building a community of a shared future for humanity and promoting development of all countries.

KEYWORDS:

• China’s aid to Africa
• recipient countries’ exports
• intensive margin
• extensive margin

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. OECD. Aid for trade at a glance 2013: connecting to value chains[J]. 2013.

2. Since China hosted the Forum on China-Africa Cooperation and established a “strategic partnership” with 44 African governments in 2000, China’s aid to Africa has doubled at every summit of the Forum on China-Africa Cooperation (Strange et al. 2013). The white paper “China’s Foreign Aid (2014)” released by the Chinese government mentioned that from 2010 to 2012, China’s aid amounted to 89.34 billion yuan, which has contributed to the improvement of the people’s livelihood and economic and social development of African aid countries.

3. For example, In 2019, Wu and Dai adopt an empirical approach to prove that China’s aid to Africa promotes the increase of Africa’s total export. In 2019, Yan et al. used China’s aid to 120 countries from 2002 to 2014 and the data of recipient countries’ exports, and found that China’s aid promoted the expansion of recipient countries’ exports to China.

4. GDP_per、Pop、Agricultural、Service、Resources、Conflict were from taken the WDI Database; Conflict were taken from the list of Center for Systemic Peace (CSP) Major Episodes of Political Violence: www.systemicpeace.org/warlist.htm; Institution were taken from the WGI Database: www.govindicators.org; lnOECD_Aid were taken from the OECD’s website: www.oecd.org/.

5. Since the dual margin of exports of African recipient countries calculated in this paper is the average of all types of exports of African recipient countries, it cannot represent the dual margins of exports of different types of products of African recipient countries. Therefore, in this robustness test, we only studied the impact of China’s aid to Africa on the exports of different types of products of the recipient countries, without performing a dual marginal decomposition.

Additional information

Funding

The authors acknowledge the support of a research grant of the National Social Science Fund project “Research on 'One Belt And One Road' Regional Value Chain Construction and China's Industrial Transformation and Upgrading” [18ZDA039], the Natural Science Foundation of Guangdong Province project “A Study On The Impact Of Changes In Political Relations Between Countries On Participation In Global Value Chains”[2021A1515011452], the Whampoa Research Institute of Guangdong University of Foreign Studies tendering project ”Research on Building a New Platform for One Belt And One Road Full Openness and Cooperation in Guangzhou Knowledge City” [HP2021010], the Fundamental Research Funds for the Central Universities of “The Research on China’s Aid and Cooperation, Embeddedness and Benefit Distribution in Global Value Chain”[JBK2107087], the Talent Introduction Program of Guangdong University of Foreign Studies ”Research on how to use industrial agglomeration to promote Chinese enterprises' going global under the background of ‘One Belt And One Road’ [299-X5219283].