In recent years, many policymakers and China watchers in Washington, D.C. have developed a sense that China’s increasing economic activity is challenging U.S. influence around the world, particularly in Africa. The appropriate response, they argue, is to compete with China by stepping up U.S. investments overseas. However, the validity of this understanding of how geopolitical influence rises and falls is not as clear as it seems.
During a recent talk in the Critical Issues Confronting China series, Margaret Pearson, Dr. Horace E. and Wilma V. Harrison Distinguished Professor of Government and Politics at the University of Maryland, unpacked the logic behind “economic influence” and shared four empirical studies to help answer questions about the impact of China’s global investments. Her answer was clear: China is unlikely to rule the world through its trade and investment activities alone. What’s more, if the U.S. wants to compete with China’s overseas influence, shifting to a larger scale of overseas investment may not be an effective strategy.
Four Key Takeaways
Economic ties only moderately win support for Chinese interests on the global stage.
Do China’s economic activities lead target countries to align with Beijing’s policies and interests, or do they create backlash or no change? Existing studies show mixed results. Some argue that such ties cause countries to vote in alignment with China at the United Nations General Assembly (UNGA), while others suggest that there are problems with this view.
Many analysts assume that countries with greater economic ties to China are likely to be more supportive of Chinese interests on issues that China deems important, such as the Hong Kong National Security Law (2020) and the treatment of Uyghurs in Xinjiang (2019). But Pearson pointed out that the main conclusion from studies on this subject is that trade does not increase active support for China.
On the other hand, studies show that investment seems to have a stronger effect, leading to more support for China. But the effects of economic ties are much less important than those of other factors, such as the recipient country’s political system and level of wealth. In other words, economic ties may not be the most important factor in determining a country’s alignment with China’s interests.
Though trade and investment don’t seem to lead to active support for China, studies show that most recipients do choose to stay silent on issues related to China, even if they have concerns or disagreements. It is likely that economic ties play a role in shaping countries’ decisions to remain silent. Still, the evidence suggests that economic ties only have a moderate effect on getting countries to support China’s interests on the world stage. Other factors may be more important in deciding whether or not a country supports China’s goals.
African Leaders’ popular support tends to only rise temporarily after Chinese-invested projects are announced.
Many African leaders have sought investment from China, as it can bring much-needed infrastructure and economic growth to their countries. But public opinion studies show that African leaders are only rewarded for bringing Chinese projects to their countries briefly following the announcement of projects. (The role of official corruption is not part of Pearson’s research.)
When a project is announced, public expectations are raised, and African leaders bask in the glow of a successful deal. But studies show that when the plans are executed, public support for the projects—and the leaders who brought them in—often drops. This is in stark contrast to aid, where people often remain excited and grateful long after implementation.
When projects are announced, Pearson noted, citizens also tend to give high ratings to domestic economic conditions, likely due to the optimism and hope that these projects bring. However, when projects become operational and the benefits are not as substantial as initially promised, citizens’ views become neutral.
Based on this evidence, African leaders cannot assume that Chinese investment will necessarily lead to increased political support. Only if the benefits continue to be felt after a project is announced will they be truly rewarded for attracting Chinese investment.
Proximity to Chinese FDI projects reduces support for a China model of development.
The China model of development is a topic of interest in many countries around the world, including Africa, where Chinese foreign direct investment (FDI) has been increasing in recent years. But do African citizens living near Chinese FDI projects favor the China model of development?
In theory, African citizens living near Chinese FDI projects should have favorable attitudes toward the China model. But research has shown that being close to Chinese FDI projects makes Africans less likely to support this model.
African citizens living in close proximity to Chinese FDI projects appear to be more critical of the China model of development. This probably indicates that as local African citizens witness how Chinese FDI projects actually work and more information is revealed to them, they become disillusioned with the promise of the “China model.”
For both the U.S. and China, investments in African countries lead to public perception that they are strong but contemptible.
If Chinese FDI projects in Africa do not win the hearts and minds of local citizens, and even lead to decreased support for the China model, then what about U.S. investments? Research shows that proximity breeds contempt for both the U.S. and China. People living near Chinese or American investments are less likely to choose those countries as the best model of development compared to those living further away when asked to rate the best model of development.
On the other hand, studies that compare Chinese FDI to American FDI find that the closer people live to Chinese or American investment projects, the more likely they are to see that country as powerful. While Chinese FDI makes local citizens think China is powerful, U.S. investments in the same region cancel out this effect.
In sum, the negative public opinion has more to do with foreignness than China per se. The effect is present in both Chinese and American foreign investments.
What are the policy implications? For one, in light of Pearson’s findings, researchers in the field of international political economy need to rethink the role of FDI in shaping public opinion. What’s more, these findings have important implications for the U.S. strategy of competition with China, particularly in Africa. Contrary to current conventional wisdom in policymaker circles, it may not be in the U.S. government’s best interest to compete with China through increased private investment in Africa. Even if the investments are well-executed, they may not win the hearts and minds of local citizens if people living near the investments do not like what they see.