Attention Versus Handshakes: Pathways of Influence in China's Foreign Aid and Loans

Numerous studies show that China uses its ODA-like overseas development financing to promote soft power and improve its international image. In this study, we seek to understand how. We examine the role of Chinese state-sponsored media and diplomacy as complements to Chinese foreign aid. We propose that the coverage of aid recipients in Xinhua articles targeted at foreign audiences, as well as the number of diplomatic visits from Beijing hosted by a recipient government, increase in proportion to the amount of aid these countries receive from China. In contrast, we propose either a null or reverse relationship in the case of OOF-like flows from China, which tend to be more associated with loans and business-oriented interests. To test these hypotheses, we use AidData's Chinese development finance dataset and its recently released diplomacy dataset, along with meta-data from millions of Xinhua news articles between 2002 and 2017. The analysis provides partial support for our argument, but the results deviate from our expectations in interesting ways. First, while aid (ODA) recipients receive more coverage in Xinhua, they are not disproportionately more likely to host missions from Beijing. Conversely, while loan (OOF) recipients are not more likely to receive coverage in Xinhua, they are more likely to host diplomatic visits. These results suggest that China likes to publicize its role as a donor for image building, but seeks closer ties with its debtors to further bilateral relationships.