Structural Changes on the Chinese Global Foreign Aid Expenditure

Abstract This article examines whether domestic structural changes have influenced the evolution of Chinese global foreign aid in the twenty-first century. The analysis utilizes statistics from three sources: the Ministry of Finance of China (MOF), the Japan International Cooperation Agency (JICA), and AidData. Autoregressive models with statistically determined lag lengths were applied, covering the period from 2003 to 2021 on an annual basis. Various statistical tests were conducted to evaluate the impact of domestic economic reforms on Chinese foreign aid. The study identified a statistically significant structural change in 2015. It also highlights China’s diverse strategies, such as forming alliances with other donors, to sustain its international presence as a major contributor, particularly in Africa and Southeast Asia. The findings suggest that internal factors, such as China’s ‘new normal’, have limited explanatory power for the observed variations, whereas external factors, including international objectives, play a more significant role. This research enhances the literature by exploring fluctuations in Chinese foreign aid amidst China’s substantial rise on the global stage.