The effects of trade, aid, and investment on China's image in Latin America
Jun 1, 2021
Vera Z. Eichenauer, Andreas Fuchs, Lutz Brückner
Journal of Comparative Economics
Eichenauer, V. Z., Fuchs, A., & Brückner, L. (2021). The effects of trade, aid, and investment on China's image in Latin America. Journal of Comparative Economics, 49(2), 483–498. https://doi.org/10.1016/j.jce.2020.08.005
Note: A version of this article was previously published as an AidData Working Paper.
Using repeated cross-sectional survey data, we analyze whether China's growing economic engagement in Latin America has an effect on citizens’ perceptions of China within 18 Latin American countries over the 2002–2013 period. Our instrumental-variables regressions exploit exogenous variation in the supply of Chinese exports, aid, and investment. Specifically, we use China's market penetration of developing countries outside of Latin America as the instrumental variable. In contrast to the widespread criticism, we do not find evidence that China's growing economic activities in the respective countries diminish average attitudes towards China—neither at the national nor at the provincial level. However, China's economic engagement appears to contribute to more polarized opinions on China: more individuals develop either very positive or very negative opinions on China. We interpret this as suggestive evidence that China's economic engagement creates winners and losers.