Abstract

Governments around the world, including that of the United States, have grown increasingly anxious about the nature and impacts of Chinese-financed global development projects. One source of concern is China’s pursuit of influence via foreign aid and less concessional, debt-based financing in other countries. But given the scale and complexity of China’s overseas development portfolio, expectations that development dollars translate linearly into political influence are unrealistic. This essay argues for instead focusing on the major nodes of China’s overseas development program most relevant for questions of influence: High-profile development projects. These projects possess outsized visibility and political salience in host countries. These features enable high-profile projects to serve as unique sources of political capital for host country leaders. China’s government can generate influence from this capital, but also faces risks to its international influence created by these projects that are often difficult to manage. Based on original data collection, this essay discusses how high-profile projects can increase or decrease China’s elite and popular influence. It provides a nodal rather than linear lens for considering how overseas development projects affect China’s net influence. This approach complicates calculations of influence, but suggests that if anything, China has likely yielded lower net influence than often assumed by policymakers and analysts.

Implications and Key Takeaways

• Policymakers and analysts should avoid the temptation to settle for straightforward assumptions about how China gains or loses influence in developing countries. China’s global development projects serve Beijing’s pursuit of influence, but both “projects” and “influence” require greater conceptual precision to understand links between them. Accounting for such links suggests that calculations of China’s influence based on overall financing volumes may be inflated due to neglect of important influence channels.
• Governments concerned with China’s use of development finance for influence should also avoid trying to match China’s financing dollar-for-dollar or project-for-project. Mobilizing and coordinating public and private capital are serious constraints to competing with China at scale. Moreover, China’s government and host country governments often have closely aligned incentives for pursuing high-profile projects. Neither direct competition nor rhetorical criticism are likely to deter China’s longstanding approach to providing these projects.
• Initial indications that the United States and its partners plan to provide alternatives to Chinese financing that focus on potential strengths in physical and digital infrastructure are encouraging. Absent the ability to do this at scale, these governments should also invest more in helping host country governments make prudent choices in pursuing and negotiating development projects financed by China and other donors and lenders.
• The United States and its partners can also provide greater support to civil society organizations (CSOs) abroad to help them monitor and shape negotiations over Chinese development projects. This is particularly important in countries where national leaders directly request, negotiate, and plan these projects, often without adequate public disclosure. Greater CSO engagement can increase the likelihood that feasible, desirable projects will be selected and completed with higher baseline levels of buy-in from local societies. This outcome would be beneficial for all actors involved, including China’s policy banks and state-owned enterprises that finance and implement projects. This support need not be conflictual: it can also be supported by China’s government and international non-governmental organizations (INGOs).
• The United States and other members of the international community should persistently leave the door open for greater coordination with China’s government, despite longstanding and current challenges related to information sharing and transparency in international development. They should encourage and reward future improvements in official information disclosure regarding China’s overseas development activities.