Give and Take: Measuring China’s Responsiveness to Challenges in Sub-Saharan Africa

Abstract

With the promulgation of the Going Out strategy in 2000, China has quickly become an important player in international finance, and Chinese State-owned enterprises, as well as private firms, have expanded their operations across the world. Sub-Saharan Africa has emerged as an important destination for Chinese development finance and for Chinese firms in search of new markets and lucrative natural resources. Chinese and many African leaders generally have touted China’s economic engagement with Sub-Saharan Africa, and developing countries as a ‘win-win’ relationship. While China’s investment in and trade with Sub-Saharan Africa has grown dramatically, China’s tied-financing policies and poor labor relations in the region have spurred mounting resistance among citizens, grassroots organizations, labor unions and political, as well as business leaders. By employing a bargaining theory model, this thesis uses a mix of methods to explain how China, at both macro and project levels, is responding to discontent and resulting bargaining power shifts. The thesis presents two major findings. t First, China shows significant signs of responsiveness to discontent in its financing policies in Sub-Saharan Africa, particularly in countries where significant natural resources are present. Secondly, Chinese State-owned enterprises working in the region are more likely to acquiesce to protestor demands when the host country is able employ its market size and natural resources as leverage over China.