As part of the HWWI Economic Policy Forum, Prof. Dr. Andreas Fuchs spoke on April 24, 2023 about China’s development aid in the Global South and its impact. The lecture took place at the Hamburg Chamber of Commerce with numerous guests from academia, business and interested members of the public and ended with a lively discussion.

In his lecture, Professor Fuchs gave an overview of current research findings on China’s international development projects around the world. These projects are sometimes viewed very critically by the public and are often interpreted as an attempt to expand its own sphere of influence in developing countries for its own benefit.

Based on econometric analyses of data from a database set up by Professor Fuchs, it is clear that China pledged at least USD 843 billion in aid to 143 countries between 2000 and 2017. Almost half of these development projects were awarded to countries in Africa. While many Western democracies primarily provide development aid for specific purposes but as a direct grant, a significant proportion of Chinese development projects tend to take the form of loan commitments for projects, which are then usually implemented by Chinese companies.

The Chinese development projects have measurable growth effects in the target regions, meaning that they certainly have an impact on prosperity. Nevertheless, they also carry the risk of creating tangible dependencies due to the resulting credit relationships. Overall, Professor Fuchs came to the conclusion that although China’s development policy is not entirely altruistic, it does have positive welfare effects in the target regions. From a development policy perspective, China is therefore neither a great hero nor a villain.

A detailed presentation of the results can be found in the book “Banking on Beijing”, which Professor Fuchs co-authored and which was published by Cambridge University Press in May 2022.