Do Chinese Government Foreign Student Scholarships Target Natural Resources in Africa?

Abstract

As China–Africa trade and investment have experienced exponential growth in recent years, there have been growing concerns about China’s influence in Africa. Critics claim that China leverages its foreign aid to gain preferential access to Africa’s abundant natural resources. Existing empirical research is hampered by the lack of official and authoritative data on China’s development aid and by the endogeneity problem. This article examines the relationship between natural resource endowment and China’s foreign aid through the lens of foreign student scholarships awarded by the Chinese government to African countries. We use new discoveries of oil, gas and mineral deposits in African countries, which are reasonably exogenous, to instrument for the quantity of natural resources in a two-stage least squares setup. We find that the amount of natural resources an African country possesses does not influence the number of government student scholarships they receive from China. The results are robust to different measures of Chinese access to natural resources in Africa. These findings cast doubts on the usual criticism against China’s foreign aid in Africa.