The Double-Edged Sword of Chinese Official Development Finance: How Does Chinese Official Finance Affect Collective Labor Rights in Developing Countries

How does China’s official finance (OF) affect labor rights in recipient countries? China has increasingly made its mark on the global economy, with its influence extending across various fields. China’s expanding presence in the global economy is largely driven by its strategic use of OF to extend its influence. However, there is a lack of knowledge regarding the effects of Chinese OF. In this article, we focus on the effects of China’s OF on collective labor rights in recipient countries. In particular, we have categorized China’s OF into official development assistance (ODA) and other official flows (OOF) to investigate their respective impact. Using time-series cross-sectional data covering 77 developing countries from 2003 to 2017, we systematically analyze how China’s OF influences collective labor rights—both in terms of labor laws and their enforcement in practice. We find that China’s OOF negatively affects labor rights in recipient countries, while the positive effects of ODA are only partially supported. Furthermore, the negative relationship between China’s OOF and collective labor rights is more evident in de facto labor practices than in de jure labor laws. Our findings suggest that the negative consequences of China’s rise are especially evident in areas where it intends to gain commercial advantages.