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Working Paper 129 - China’s Engagement and Aid Effectiveness in Africa

23-Jun-2011

Engagement with China is an important phenomenon for the African continent. Beyond the quantitative impact of growing aid, finance, trade and investment flows, this engagement may have significant qualitative impacts on African development, positive and negative. It is often alleged that the heavy role played by extractive industries in Africa’s engagement with China will impede diversification. More generally it is stated that China’s engagement in Africa could undermine African development, implying an adverse impact on aid effectiveness. However, too often such discussions are based on informed opinion, rather than on hard data and research results. This paper approaches these debates using as much as possible a quantified framework, in an attempt to go beyond the common wisdom. The issues addressed include aid effectiveness, trade creation, and diversification.

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