nep-cna New Economics Papers
on China
Issue of 2022‒01‒24
twelve papers chosen by
Zheng Fang
Ohio State University

  1. Debt relief with Chinese characteristics By Brautigam, Deborah; Acker, Kevin; Huang, Yufan
  2. African migrants plight in China: Afrophobia impedes China's race for Africa's resources and markets By Kohnert, Dirk
  3. China, Africa, and Debt Distress: Fact and Fiction about Asset Seizures By Brautigam, Deborah; Kidane, Won
  4. "The Better You Feel, the Harder You Fall": Health Perception Biases and Mental Health among Chinese Adults during the COVID-19 Pandemic By Nie, Peng; Wang, Lu; Dragone, Davide; Lu, Haiyang; Sousa-Poza, Alfonso; Ziebarth, Nicolas R.
  5. Do Chinese Infrastructure Loans Promote Entrepreneurship in African Countries? By Munemo, Jonathan
  6. Bridging Africa’s Income Inequality Gap: How Relevant Is China’s Outward FDI to Africa? By Isaac K. Ofori; Toyo A. M. Dossou; Simplice A. Asongu; Mark K. Armah
  7. A Comparative Analysis: Chinese and Indian Exim Bank Finance in Ethiopia By Huang, Zhengli; Behuria, Pritish
  8. Finding the instrumental variables of household registration: A discussion of the impact of China's household registration system on the citizenship of the migrant population By Jingwen Tan; Shixi Kang
  9. China's Digital Silk Road in Africa and the Future of Internet Governance By Tugendhat, Henry; Voo, Julia
  10. Railpolitik: Ethiopia's Rail Ambitions and Chinese Development Finance By Chen, Yunnan
  11. China, Africa, and the Rest: Recent Trends in Space Science, Technology, and Satellite Development By Klinger, Julie
  12. "Africa's China": Chinese Manufacturing Investment in Nigeria in the Post-Oil Boom Era and Channels for Technology Transfer By Chen, Yunnan

  1. By: Brautigam, Deborah; Acker, Kevin; Huang, Yufan
    Abstract: As China is poised to become the world's largest creditor, concerns about debt sustainability have grown. Yet considerable confusion exists over what is likely to happen when a government runs into trouble repaying its Chinese loans. In this paper, the authors draw on CARI data to review the evidence on China's debt cancellation and restructuring in Africa, in comparative and historical perspective. Cases from Sri Lanka, Iraq, Zimbabwe, Ethiopia, Angola, and the Republic of Congo, among others, point to patterns of debt relief with distinctly Chinese characteristics.
    Date: 2020
  2. By: Kohnert, Dirk
    Abstract: The social fabric of the migrant’s host country largely embodies major traits of the exclusion of ‘strangers’. The latter often focus on ethnicity, race, religion, sexual orientation and gender. This applies also to the Afrophobia which spreads in contempory China. Thus, current news focused on the eviction of African migrants from apartments and hotels in China. Actually, an estimated 500.000 Africans live in China. The Corona pandemic aggravated their situation. The scarcity of Chines immigration assistance posed a challenge for Africans looking to secure residence permits, renew visas, or amend their status in other ways. They had to rely on informal or illicit networks to remain in the country. The African Union, various African governments and even the United States put pressure on Beijing over the ill-treatment of migrants, predominantly from Nigeria, Ghana, Kenya and Uganda. Shortly before, five Nigerians had been reportedly tested positive for Covid-19 in Guangzhou, the metropolis where most Africans live and work, nicknamed ‘Little Africa’. These reports seem to be what has sparked the current wave of suspicion and anti-foreigner sentiment. Many African students and other migrants had left China already at the start of the outbreak. The remaing got stranded and chased around. Yet, even Chinese state media admitted that non-African foreigners like Americans and Filipinos, who accounted for more than half of foreigners living in Guangzhou who had the virus, were not singled out as scapegoats. However, racist attacks on Africans in China had a depressing long tradition, related to the expansion of bilateral petty trade of Chinese in Sub-Sahara Africa since the early 2000s and the subsequent influx of African traders in China. Already in 2008 African migrants had blocked a major street in Guangzhou protesting against the death of a Nigerian in an immigration raid.
    Keywords: China, Africa, international migration, xenophobia, Afrophobia, racism, political violence, Afro-China relations, informal sector, illegal immigration, forced migration, slave-trade, minorities, remittances
    JEL: F16 F22 F24 F51 F54 I24 I31 J46 J61 N15 N35 O15 O17 O35 Z13
    Date: 2022–01–02
  3. By: Brautigam, Deborah; Kidane, Won
    Abstract: In the past two years, news headlines have periodically speculated that African borrowers are at risk of losing their sovereign assets to Chinese lenders. In this policy brief, the authors explore what is known about the legal aspects of Chinese lending, including the waiver of sovereign immunity and the consequences thereof, and provide policy recommendations.
    Date: 2020
  4. By: Nie, Peng (Xi’an Jiaotong University); Wang, Lu (Xi’an Jiaotong University); Dragone, Davide (University of Bologna); Lu, Haiyang (Southwestern University of Finance and Economics); Sousa-Poza, Alfonso (University of Hohenheim); Ziebarth, Nicolas R. (Cornell University)
    Abstract: The health risks of the current COVID-19 pandemic, together with the drastic mitigation measures taken in many affected nations, pose an obvious threat to public mental health. The social science literature has already established a clear link between mental health and sociodemographic as well as economic factors, and a growing number of studies investigate the role of biased risk perceptions. To assess this role in the context of COVID-19, this study first implements survey-based measures of over- and underconfidence in the health self-perceptions among Chinese adults during the pandemic. Then, it analyzes their relation to three mental health outcomes: life satisfaction, happiness, and depression (as measured by the CES−D). We show that the health overconfidence displayed by approximately 30% of the survey respondents is a clear risk factor for mental health problems; it is a statistically significant predictor of depression and low levels of happiness and life satisfaction. We also document that these effects are stronger in regions that experienced higher numbers of confirmed COVID-19 cases and deaths. Recent research has shown that health overconfidence can influence risky behaviors such as smoking and excessive alcohol consumption, which may be particularly detrimental during a pandemic. Our results also offer clear guidelines for the implementation of effective interventions to temper overconfidence, particularly in uncontrollable situations like the COVID-19 pandemic.
    Keywords: health perception bias, overconfidence, underconfidence, mental health, China, COVID-19
    JEL: I12 I18 P46
    Date: 2021–12
  5. By: Munemo, Jonathan
    Abstract: As Chinese loans to Africa have been on an upward trajectory for more than a decade, there are questions about the economic consequences that large scale borrowing from China has on African economies. Jonathan Munemo investigates the impact these rising loans have on entrepreneurship and finds that African countries with a higher percentage of economic infrastructure loans have greater entrepreneurship in the form of new business startups.
    Date: 2021
  6. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Toyo A. M. Dossou (Chengdu, China); Simplice A. Asongu (Yaoundé, Cameroon); Mark K. Armah (University of Cape Coast, Cape Coast, Ghana)
    Abstract: In line with the SDG 10 and Aspiration 1 of Africa’s Agenda 2063, this study examines whether: (i) the remarkable inflow of Chinese FDI to Africa matters for bridging the continent’s marked income inequality gap, (ii) Africa’s institutional fabric is effective in propelling Chinese FDI towards the equalisation of incomes in Africa, and (iii) there exist relevant threshold levels required for the various governance dynamics to cause Chinese FDI to equalise incomes in Africa. Our results, which are based on the dynamic GMM estimator for the period 1996 – 2020, reveal that though: (1) Chinese FDI contributes to equitable income distribution in Africa, the effect is weak, and (2) Africa’s institutional fabric matters for propelling Chinese FDI towards the equalisation of incomes across the continent, governance mechanisms for ensuring political stability, low corruption, and voice and accountability are keys. Finally, critical masses required for these three key governance dynamics to propel Chinese FDI to reduce income inequality are 0.8, 0.5 and 0.1, respectively. These critical masses are thresholds at which governance is a necessary but no longer a sufficient condition to complement Chinese FDI in order to mitigate income inequality. Hence, at the attendant thresholds, complementary policies are worthwhile. Policy recommendations are provided in the end.
    Keywords: Africa, Agenda 2063, China, Corruption, Governance, FDI, Income Inequality
    JEL: F6 F15 O43 O55 R58
    Date: 2021–01
  7. By: Huang, Zhengli; Behuria, Pritish
    Abstract: Zhengli Huang and Pritish Behuria examine projects financed by Indian and Chinese Exim Banks to analyze how the development financing of two 'emerging' donors – India and China – has evolved in Ethiopia. In India and China, Exim Banks work both as export credit agencies and other traditional development finance organizations, thereby blurring the boundary between development assistance and economic cooperation. The authors selected Ethiopia as it is a strategic partner for both countries, and existing literature has shown that the Ethiopian government is an outlier on the continent in employing its diplomatic relations to support strategic developmental goals.
    Date: 2021
  8. By: Jingwen Tan; Shixi Kang
    Abstract: Due to the specificity of China's dualistic household registration system and the differences in the rights and interests attached to it, household registration is prevalent as a control variable in the empirical evidence. In the context of family planning policies, this paper proposes to use family size and number of children as instrumental variables for household registration, and discusses qualitatively and statistically verifies their relevance and exogeneity, while empirically analyzing the impact of the household registration system on citizenship of the mobile population. After controlling for city, individual control variables and fixed effects, the following conclusions are drawn: family size and number of children pass the over-identification test when used as instrumental variables for household registration; non-agricultural households have about 20.2\% lower settlement intentions and 7.28\% lower employment levels in inflow cities than agricultural households; the mechanism of the effect of the nature of household registration on employment still holds for the non-mobile population group.
    Date: 2021–12
  9. By: Tugendhat, Henry; Voo, Julia
    Abstract: The Digital Silk Road (DSR) is a Chinese policy initiative launched in 2015, yet six years later there is relatively little concrete information about what it has achieved so far. Henry Tugendhat and Julia Voo offer a preliminary analysis of what the DSR entails in Africa. Discover their findings, including how Chinese lending for technology projects in Africa was actually greater before the launch of the DSR than after.
    Date: 2021
  10. By: Chen, Yunnan
    Abstract: Explore Yunnan Chen's analysis of railway construction as a manifestation of China's economic statecraft in Africa. As African leaders have eagerly leveraged the railway sector, this paper looks through the lens of African agency to examine the case of Ethiopia's Chinese-financed railway projects, including the Addis- Djibouti Railway, contrasting it to Ethiopia's experience with subsequent European/Turkish financed projects. Chen shows the opportunities, missed and taken, by Ethiopian actors in leveraging external partners, focusing on areas of technology and skills transfer. Ultimately, the different financing arrangements entail different relationships—one politicized, one commercial—offering different scopes of bargaining power: while the political relationship offers greater flexibility regarding financing, the commercial project has been more successful for exercising agency in relation to contractors.
    Date: 2021
  11. By: Klinger, Julie
    Abstract: Did you know China's first successful contract to build a satellite was for Nigeria's Space Research and Development Agency? Space is booming on the African continent. Millions of dollars in deals to build and launch satellites are being signed with a host of partners. This policy brief by Julie Klinger explores how African scientists and entrepreneurs are engaging in space science policy at home and abroad, pushing the frontiers of what is possible in a rapidly transforming political and economic context.
    Date: 2020
  12. By: Chen, Yunnan
    Abstract: Nigeria has been a primary destination for Chinese investment in the last two decades, as Chinese entrepreneurs and investors have been drawn by rich resources and huge market potential. However, challenges remain in harnessing the potential of this growing manufacturing investment for the structural transformation of the economy. This paper assesses the evolving landscape of Chinese investment in manufacturing and potential for technology transfers, finding a growing Chinese presence in manufacturing sectors, particularly in construction and consumer sectors. However technology transfer within these is highly uneven, and challenged by economic and policy instability in recent years.
    Date: 2020

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