Dong Zhang 張冬 (Lingnan University Hong Kong)

How does an authoritarian donor's domestic political economy shape its aid practices? We probe into the case of China, the largest authoritarian donor in the world, and contend that the regime survival imperative drives China's aid policies to prioritize commercial interests and sustain the state capitalism model. By leveraging multiple data sources, we empirically document that Chinese aid projects lead to a substantial surge of Chinese exports to aid recipient countries. Perhaps more importantly, we find the aid-induced trade benefits primarily state-owned enterprises (SOEs), particularly ones that are under-performing, less productive, labor-intensive, and crippled with heavy debt burdens. The findings have important implications for understanding China's economic engagement in the world.