Can china buy love in sub-saharan Africa?: how Chinese foreign direct investments are able to shape people’s perception on china

Master

Reference

Can china buy love in sub-saharan Africa?: how Chinese foreign direct investments are able to shape people's perception on china

GRUNOW, Damian Andri

Abstract

Can china buy love in sub-saharan Africa?: how Chinese foreign direct investments are able to shape people's perception on china

GRUNOW, Damian Andri. Can china buy love in sub-saharan Africa?: how Chinese foreign direct investments are able to shape people's perception on china. Master : Univ. Genève, 2020

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Master Thesis 2020, Master in Political Sciences

University of Geneva

Can China buy love in sub-Saharan Africa?

How Chinese Foreign Direct Investments are able to shape people’s perception on China.

Department of Political Science and International Relations Supervisor: Prof. Thomas Sattler

Submission date: 23.11.2020

Damian Andri Grunow 14-713-812

Schäppi-Naef-Strasse 10 8942 Oberrieden

Acknowledgement:

Throughout the writing of this Master Thesis I have received a great deal of support and assistance. I would like to thank my supervisor, Professor Dr. Thomas Sattler, whose expertise was very helpful – especially for methodological matters.

Abstract:

China’s presence on the African continent has increased tremendously. China has invested in numerous infrastructure projects including railways, roads, and power plants. This research shows that inward Foreign Direct Investment (FDI) is able to shape people’s attitudes towards China’s engagement in sub-Saharan Africa in a positive way. In contrast to prior research, this paper not only measures FDI on a country level but also on a regional (provincial) level. This approach increases the probability that people are aware of these investments or even directly affected by them because they work for a Chinese multinational or benefit from the new infrastructure. Additionally, this paper finds evidence that people in urban areas with a higher educational background are more critical towards China’s growing influence. As the African continent is still at a point of globalization primarily based on labour-abundant economic sectors, globalization efforts have not reached the continent the same ways as in other parts of the world. This growing Chinese influence can be also seen as a kind of threat to a local African elite that tries to protect their privileged position in the society.

1 Overview

1 INTRODUCTION 5

1.1WHAT ABOUT POPULAR OPINION? 6

1.2INWARD FDI AMOUNT POSITIVELY AFFECTS PERCEPTIONS FEHLER!TEXTMARKE NICHT DEFINIERT.

2 CHINA’S ROLE IN SUB-SAHARAN AFRICA 9

2.1CHINA IN SUB-SAHARAN AFRICA: A GEOPOLITICAL PERSPECTIVE 10 2.2CHINA IN SUB-SAHARAN AFRICA: AN ECONOMIC PERSPECTIVE 12

2.3CHINESE FDI AND WHERE IT GOES 14

2.4CHINESE FDI:THE AFRICAN PERSPECTIVE 16

2.5WHY DOES POPULAR OPINION MATTER? 17

2.6CHINA'S SURPRISINGLY POSITIVE IMAGE IN AFRICA 18

3 THEORY AND HYPOTHESES 19

3.1FDI AND ITS EFFECTS FROM A MACRO-LEVEL PERSPECTIVE 20 3.2SOCIO ECONOMIC FACTORS DRIVING POPULAR OPINION 22

4 DATA AND METHOD 27

4.1DATABASE 27

4.2CASE SELECTION 28

4.3OPERATIONALIZATION 29

4.4METHOD 31

5 DESCRIPTIVE STATISTICS 32

5.1WHERE DO PEOPLE SUPPORT CHINA’S ENGAGEMENT? 35

5.2SKILL LEVEL AND EDUCATION 39

5.3RURAL AND URBAN DISTRIBUTION 40

5.4INDIVIDUAL LIVING CONDITIONS AND COUNTRY ECONOMIC DEVELOPMENT 41

5.5CORRELATIONS 44

6 RESULTS 45

6.1AMOUNT OF INWARD FDI HAS A POSITIVE EFFECT ON PEOPLE’S PERCEPTION 46 6.2SKILL LEVEL HAS NO EFFECT ON PEOPLE’S PERCEPTIONS OF CHINA 53 6.3LOW-EDUCATED PEOPLE SEE CHINA MORE POSITIVELY 54 6.4URBAN DWELLERS ARE LESS POSITIVE TOWARD CHINA 61 6.5INDIVIDUAL LIVING CONDITIONS AFFECT PERCEPTION POSITIVELY 62 6.6PEOPLE PERCEIVING ECONOMIC CHANGE ARE MORE POSITIVE TOWARD CHINA 64

7 CONCLUSION 67

8 REFERENCES 70

9 ANNEX 80

Tables and Graphics

Graphic 1: Chinese inward FDI on the regional level 33

Graphic 2: Chinese inward FDI relative to GDP 34

Graphic 3: Distribution of popular support for China’s engagement 35

Graphic 4: Mean of popular support for China’s engagement in all states 36

Graphic 5: Regional support for Chinese engagement in Mozambique 37

Graphic 6: Regional support for Chinese engagement in Sierra Leone 38  

Graphic 7: Distribution China support among skill-level categories                                                              40   Graphic 8: Rural/urban distribution among respondents 41

Graphic 9: Support for China among economic change categories 42

Graphic 10: Respondents’ Individual living conditions 43

Graphic 11: Fitted plot – effect FDI/GDP on people’s perceptions about China 47

Graphic 12: Fitted plot – effect FDI regional on people’s perceptions about China 49 Graphic 13: Fitted plot – Inward FDI doesn’t influence the effect 59

Graphic 14: Fitted plot – Ind. living condition on people’s perception 63

Graphic 15: Fitted plot – Economic change and people’s perception 65

Graphic 16: Chinese inward FDI relative to population size (per capita) 80

Table 1: Correlations of all variables 44

Table 2: Multi-level regression table 48

Table 3: Multi-level regression table – sectorial FDI data 52

Table 4: Multi-level regression table – interaction effects 57/58 Table 5: Description of all variables 80 Table 6: Multi-level regression table – interaction effects (FDI regional) 81/82

1 Introduction

In recent decades, China’s economic growth and international expansion strategy has generated much attention. China is on its way to adopting a more active global posture (Stahl 2016). Chinese President Xi Jinping announced one of China’s most ambitious foreign economic initiatives in 2013 (Cai 2017). With the so named ‘One Belt, One Road Initiative’, the People’s Republic has invested in numerous infrastructure projects around the globe. The initiative is intended to secure access to resources, help China establish new export markets, and secure advantages of free trade even in times of growing protectionism (Wriessnig 2017). In addition to land corridors, especially gas pipelines connecting China und the Caspian Sea, the initiative includes maritime passages ‘knitted together through a chain of sea ports from the South China Sea to Africa…’ (Nantulya 2019: 1). In the last 15 years, Chinese companies and lenders have planned and completed numerous ports, railways, and power plants. The railway line in Kenya connecting Nairobi and the port of Mombasa is only one of several Chinese prestige projects in Africa (BBC Africa 2014).

The growing Chinese influence in sub-Saharan Africa is unmistakable. Where China’s economic status in sub-Saharan Africa was negligible at the turn of the millennium, by 2009 the China-Africa trade volume had even overcome the trade volume between African states and the United States (Urech 2018). Regarding foreign aid, China is now the greatest non-traditional donor state in Africa, a continent in which aid has been almost exclusively delivered by countries of the OECD (Amusa et al. 2016). China’s influence is primarily based on Foreign Direct Investment (FDI), which ‘has become a central driver of global economic integration’ (Pandya 2016:

456). The numbers are impressive; China invested approximately $491 million in 2003, a number that climbed to over $32 billion in 2014 (UNHABITAT 2019). This development led to newly emerged discussions about the incentives and effects of these massive investments. In western media, China’s investment strategy is often seen as exploitative of African economies – with no care taken to aid in their sustainable economic or political development (Hanusch 2012). Jian Junbao (2007) even described China’s activities in Africa as a new form of colonialism. China would focus on profits by ignoring their harmful influences on African society or the local labour markets. How FDI from China affects the development of sub-Saharan Africa is indeed an especially controversial topic among researchers. On the one hand, there are views like those of Hanson/Robertson (2008) who argued that Africa’s economic growth of 5.8 percent in 2007 can partially be attributed to the extensive FDI inflow.

On the other, there are scholars like Brewer (1991) who discovered a negative correlation between FDI and economic growth.

1.1 What about popular opinion?

Measuring solely economic performance to analyze the effects of Chinese FDI in sub- Saharan Africa is not sufficient. Chinese investments directly affect people in African societies in many ways – especially Chinese-financed or built infrastructure projects, which are highly visible and can contribute significantly to the development of these countries. Chinese enterprises have completed, are building, or are helping to rejuvenate approximately 30,000 kilometers of highways and 2,000 kilometers of railway lines (Mareis/Labuschagne 2019). Such investments have direct impacts on people’s living situations in sub-Saharan Africa. Bringing better connectivity to long- neglected and isolated regions allows the economies there to grow because new firms and manufacturers are built along these new traffic routes. Such investments ‘are an essential element in plans to emerge from a long cycle of drought, poverty, famine and war’ (Los Angeles Times 2018). Chinese-built infrastructure is not the only element that can have direct impacts on African societies, though; the increasing number of mostly state-owned Chinese enterprises can lead to changes in the domestic labor market as well. Blomström and Kokko (1998) emphasized that FDI can give developing countries easy access to new technologies and skills, which then can empower local capabilities and make them more competitive in the increasingly globalized world market (Dupasquier/Osakwe 2006). Other papers have shown that the Chinese presence has ‘negatively affected local traders as well as local manufacturers who could not withstand the Chinese competition. As a result, thousands of jobs were lost in countries like Zambia, Ghana, South Africa, Nigeria, Ethiopia and Sudan’ (van Dijk 2009a: 169). That said, what do people in sub-Saharan Africa think about China and its increased influence in their countries? Despite the growing importance of popular opinion about Chinese engagement in Africa, overall knowledge of people’s perception is still limited. Regardless, measuring public opinion remains important because China’s future growth strategy also depends on its cooperation with African people. Popular opinion can affect their government’s decisions, as African state leaders can support or even promote FDI from China. This paper, then, attempts to overcome this research gap by placing the focus on African citizens.

The basis for this research is the ‘Afrobaromter’ social survey program, which has delivering the best and broadest data so far. The survey includes interviews with almost 54,000 citizens in 36 African countries and representing the views of more than three-fourths of the continent’s population (Afrobarometer 2016). From a western perspective, the general support for China and its increasing presence in sub-Saharan Africa might be surprising. Two-thirds of Africans say that China’s influence is somewhat or very positive (Afrobarometer 2016). This paper attempts to determine which factors are responsible for swaying public opinion and whether people support China’s engagement in their countries. Along with prior research on globalization effects, this paper delivers new important empirical evidence about FDI effects from an African perspective. The following research question was investigated.

Does the amount of inward FDI affect how people perceive China’s growing influence? And which socio-economic factors are responsible for how people rate China’s engagement in their countries and regions?

The analysis was carried out on both a micro and macro level. On a macro level, the main interest was to determine whether the amount of inward FDI is able to affect people’s perceptions about China. In other words, is China able to buy love in sub- Saharan Africa? For the first time, this research succeeded in measuring the quantities of inward foreign investments not only by country but also by region (province). This disaggregation led to greater variance and better outputs. Measuring as narrowly as possible increases the probability that these Chinese investments are visible to local people. Factors analyzed on an individual level were chosen based on theories arguing that globalization has created winners and losers. There is a central concern that that increasing globalization is causing dramatic changes in labor demand, it is argued that low-skilled and low-educated citizens should be less positive towards China’s growing influence in their countries. The same accounts for people living in rural areas, as FDI usually is concentrated in the named Special Economic Zones (SEZ) (World Investments Report 2019). According to this argument, people living in urban areas would be more positive toward China’s growing influence. In addition to the places where people live and work, individual economic and social statuses appear highly important. It is assumed that people who rate their current individual living conditions as good have more positive

perceptions about China’s growing political and economic influence on their country.

However, it is not only individual situation that can be important in determining how people feel about China; how people perceive economic changes in their countries might factor in as well. For instance, citizens who think their country has economically improved would be more positive toward China’s activities in sub- Saharan Africa. All hypotheses were tested within a multi-level regression model which enables the measurement of effects on both the individual and country levels.

This allows the individual and macro levels to be regarded as not fully separate categories – to see whether the amount of FDI influences the effects of our micro- level socio-economic variables on people’s perceptions about China. Additional models calculating interaction effects were also carried out.

1.2 The amount of inward FDI affects people’s perception positively

This research is the first one confirming that the amount of inward Chinese FDI can shape people’s perceptions about China’s growing economic and political influence in their countries. In countries and regions where China invests more money, citizens tend to be more positive toward China’s activities. Additionally, the results suggest that Chinese FDI going into infrastructure projects in the transport or construction sectors are connoted the most positively based on the amount of the investments.

Additionally interesting are the findings regarding education and skill level. Type of occupation has no direct or significant effect on how people think about China.

Education, by contrast, has a strong and highly significant effect on people’s attitudes toward China. However, the effect is not positive as hypothesized; it is negative. The same image is presented regarding living environment. People in urban areas are in general more negative toward China’s growing political and economic influence.

These findings suggest that classic, mostly western-focused globalization theories do not work as explanations for people’s support for China’s growing influence in Sub- Saharan Africa, as the continent is at a far different point of economic development.

As the main portion of Chinese FDI goes in to infrastructure projects like railways or new roads, it is likely that many people benefit from these investments rather than a highly privileged elite.

The first part of this paper focuses on China’s engagements in sub-Saharan Africa and the country’s potential intentions for creating a greater presence on the continent. To understand potential effects of increasing Chinese FDI for African

citizens, it is essential to understand the strategy behind China’s engagement. The history of Sino-African relations is described briefly in the following chapter.

2 China’s Role in Sub-Saharan Africa

Most political scientists have broadly divided Sino-African interactions into three different phases. The interest of China in Africa started during the Maoist era in the early 1950s, as the African continent had become a battleground between western imperialists and soviet anti-revisionists (Lafargue 2005, Mawdsley! 2008). The People’s Republic of China began to support independence movements against former colonial forces. In Angola, for example, China supported different organizations and parties fighting against Portuguese colonial rule – like UNITA, the National Union for the Total Independence of Angola (Campbell/Chaulia 2009). The People’s Republic was ‘the first non-Arabic country to recognize the provisional government of Algeria, which was set up in 1958’ (Lafargue 2005: 2). However, the connection between Maoist China and Africa was primarily based on diplomatic relations and shared anti-colonialist principles (Larkin 1971, Mawdsley! 2008). Thus, Sino-African ties were political rather than commercial. Trade, direct investments, or loans were extremely limited (Mawdsley! 2008). Following the death of Mao Zedong, China became more reluctant to continue its influence in Africa: ‘China had a low profile in Africa, and where it was involved was far more critical than it had ever been before. This reflected Beijing’s changed attitude towards Africa and the lowering of importance of Africa’s place in China’s foreign policy’ (Taylor 1998: 446).

This second period can be seen as an intermediate phase in Sino-African relations.

After 1989, the People’s Republic began reinforcing its foreign policy strategy. The shootings around Tiananmen Square and public human rights abuses worsened relations between China and the west. Many African state leaders expressed their support for China quite openly. There was one important factor, according to Taylor (1998), explaining why China’s attitude toward the third world became more positive and why Peking intensified foreign relations with African states. From a geopolitical perspective, China had interests to strengthen political and diplomatic ties ‘in order to bolster its position on a number of strategic issues, including contesting the current balance of power within the forums of global governance, such as the United Nations and the World Trade Organization; and its longstanding rivalry with the Republic of China – Taiwan’ (Mawdsley! 2008: 513).

However, China’s most obvious driver of intensifying ties with African states was the People’s Republic’s economic boom. Demand for resources, investment outlets, and trade increased very quickly. Chinese involvement in the oil sector in Angola, Nigeria, and Sudan since 1995 is one example of this. Chinese activities in the mining areas of Congo and Zimbabwe are other examples of growing Chinese investments since the 1990s (van Dijk 2009b). In recent years, China has intensified its diplomatic and economic ties with countries around the world, including the African continent, showing ‘that this represents a significant economic and geopolitical trend’

(Mawdsley! 2008: 513). That said, what are China’s main incentives to invest in sub- Saharan Africa? This question is part of an active scientific discourse.

2.1 China in sub-Saharan Africa: a geopolitical perspective

A group of analysts have emphasized the geopolitical motives behind China’s increasing presence in Africa. With the end of the Cold War, the United States was expected to become an uncontested hegemon, instilling fears in Beijing authorities that this ‘would hold back China’s ascendancy as a global political power’ (Tull 2006:

461). Since then, China has implemented a new strategy concerning its role in the world, one that is more active in the international system (van Dijk 2009b, Ferdinand 2016, Tull 2006). Retired People’s Liberation Army officer Liu Mingfu (2015) spoke of the ‘China Dream’, which implies that Beijing’s wish is to restore China to its historical glory (Mingfu 2015). This neo-realistic perspective stipulates not only China’s vision of becoming number one in the world but also its desire to be prepared for a confrontation with the United States, which would resist China’s rise (Ferdinand 2016). President Xi Jinping himself ‘has been promoting this Chinese Dream since he became the General Secretary of the Chinese Communist Party (CCP) at the 18th CCP Congress held in November 2012’ (Sørensen 2015: 55). Xi’s core intention behind these words is not clear and is part of an ongoing discourse. From a Western and realistic perspective, the Chinese Dream is a hegemonic project with the aim of reaching new hegemony in the international system. They argued that Xi tries to ‘convert the growing economic power into enduring and resilient political and cultural influence both domestically and internationally’ (Li 2015: 11). John Mearsheimer (2006, 2010) described China’s strategy as an attempt to promote a world order with Chinese characteristics, an outcome which could never occur peacefully. Yang (2014) gave another perspective. He saw Xi’s promotion of a Chinese dream ‘in the lineage of an earlier Maoist language of anti-imperialism and

national independence’ (Yang 2014: 110). However, whether China’s intention to play a more active role in the world is hegemonic or not cannot be conclusively determined. It is also true, though, that China’s hegemonic claims may be too far- reaching. According to Womack (2004), rather than becoming number one in the world, China has simply been trying to offer an alternative to American unipolarity.

China has been attempting to force multipolarity since the bipolarity ended with the collapse of the Soviet Union. This multipolarity strategy includes ‘the construction of more or less flexible alliances to contain every form of hegemony and to build a new and just international order' (Tull 2006: 461). Thus, Beijing has expanded its bilateral relations throughout the world, has become more involved in regional bodies, and has strengthened its role in multilateral organizations (Tull 2006). This is where African states become relevant once more, as they could serve as important partners for Beijing in multilateral negotiations. African countries comprise the largest regional group in the United Nations General Assembly (UNGA) and are the largest strategic group within the World Trade Organization (WTO) as they have the capacity to block decisions and put issues on the negotiation table (Swiss Mission UN 2017, Zhuawu 2012). The concept that lies behind this strategy is ‘Soft Power’, an idea popularized by Joseph Nye (1990). Nye stipulated that culture, political values, and foreign policies are the main sources for explaining shifts in the international political environment following the end of the Cold War (Nye 1990, Martinez 2015). Soft power, therefore, is an alternative concept to hard power, which is characterized by military power, coercion, and threats. As military offensives and wars have become more costly for modern states, ‘instruments such as communications, organizational and institutional skills, and manipulation of interdependence have become important’ (Nye 1990: 158). Nye’s liberalist view implies that ‘political leaders use international institutions to discourage or promote (…) linkages; they shop for the forum that defines the scope of an issue in the manner best suiting their interest’

(Nye 1990: 159). This can be readily observed in the institutions of the United Nations, especially the UNGA. In the human rights sector, Sino-African alliances have emerged and even experienced several successes in recent years. African representatives in the UNGA have supported China to defeat several attempts to criticize China’s human rights records (Taylor 2009, Martinez 2015). Such coalitions have acted as shields for China to prevent itself from human rights criticism. Another important issue where China can rely on African partnership concerns Taiwan.

African states were vital in transferring the United Nations Security Council (UNSC) seat from Taiwan to China, as most countries in the African bloc voted for the

People’s Republic’s reentry to the UN (Martinez 2015). Similar examples can be observed in the WTO. After being silent for years, in 2019 all 43 African WTO member states joined the group that seeks to end the United States’ veto on judicial appointments to the World Trade Organization. Since then, the group opposing U.S.

veto is in the majority (Reuters 2019). According to the International Press Service (2019), African states showed their colours by siding with China, as the People’s Republic had already urged the WTO to oppose U.S. veto power months before. All these events show how China can benefit from alliances with African states in international organizations. However, these geopolitical elements can only explain a small part of China’s engagement in Africa. Political ties can also be helpful instruments to reach China’s main goal, which is economic growth. Theoretical arguments concerning China’s economic interests in Sub-Saharan Africa are explained in the following chapter.

2.2 China in sub-Saharan Africa: an economic perspective

China has the fastest-growing economy in the world. Since China opened its economy in 1978, the GDP has grown nearly 10% per year on average and millions of people have been lifted out of poverty (World Bank 2020a). China’s impressive economic growth has also increased the state’s demand for natural resources (Carmody/Owusu, 2007). Post-Maoist economic development has especially generated a growing demand for oil, which is also due to a ‘wealthier society with its increased demand for consumer goods such as cars and refrigerators’ (van de Looy/de Haan 2006: 565). That is why China sought ‘new suppliers to fulfill its oil requirements in order to diversify its sources and achieve energy security’ (van de Looy/de Haan 2006: 565). Thus, in 1993 China became an energy importer instead of a net exporter, as ‘African oil sources were the easier way for China to access these resources’ (Grimm 2014: 64). Today, China imports approximately one third of its oil from the African continent (Wang/Zou 2014). However, oil is not the only raw material China desires. Another natural resource important for China’s growth strategy is timber. After the Yangtze River overflowed in 1998, resulting in billions of dollars in damage, ‘the Chinese government banned logging in large parts of China and has begun to protect its healthy forests and replant woodlands that had already been cleared for agriculture’ (van de Looy/de Haan 2006: 565). Since then, the domestic logging industry has no longer been able to meet the rising demand for timber in China. Consequently, timber has been imported from other world regions –

particularly from the African continent. In addition to timber, China also seeks for copper, nickel, bauxite, and others (Wang/Zou 2014). In Zambia, for example, China has invested $170 million in copper mines, and ‘it is also active in the Democratic Republic of Congo, a country gripped by civil war and instability’ (Konings 2008:

354). China’s investments are also connected with high risks, as insecurity and political instability are part of the everyday lives in citizens of these countries, which again serves to emphasize Beijing’s intense hunger for these natural resources. These resources also include the agricultural sector, as food security have become a growing concern for the Chinese government: ‘With the increase in population, the loss of vital agricultural land to industry and increasing consumption amongst its urbanizing population, Beijing sees a need to obtain stable sources of key foodstuffs’

(Konings 2008: 355). This is why China seeks investments in agriculture, fisheries, and secondary production facilities in Africa (Wang/Zou 2014). Less important but still significant is the export of Chinese products to African markets – mainly labor- intensive manufactured products like textiles or shoes though also ‘more sophisticated products such as different consumer electronic devices and mobile telephones’ (van Dijk 2009b: 12). Because most African countries do not yet have developed manufactories and rely instead on traditional products, Africa is becoming more open to or even dependent on cheap imports from China. This development is very controversial. On the one hand, critical voices like Giovanetti and Sanfilippo (2016: 11) have argued that ‘China has started flooding African markets with its low-cost manufactures, often at the expense of local producers’. On the other, however, some authors have argued that these inexpensive Chinese imports help African countries push an atmosphere of development by allowing African people to buy shoes or clothes (Beule/ Bulcke 2009, Alden 2007). The effects of the Chinese presence in Africa are an important basis to hypothesize possible effects on people’s perceptions about China and are thus relevant to this research. We return to this issue in the following sections.

China itself sees the African continent as an opportunity to gain access to raw material treasures and to export its low-price manufactured products to new markets in the global south. However, it is not (only) trade which makes China’s engagement in Africa unique. The African continent provides Chinese firms with new investment possibilities. The Chinese government is able to keep enterprises afloat, especially those struggling in the domestic market: ‘While most Chinese companies too weak to compete with enterprises in more advanced countries, they nevertheless have

comparative advantages in market competition in African countries’ (Wang/Zou 2014: 82)’. ‘Going Global’ or ‘Going Out’ are the most-used slogans for this investment strategy. The Chinese government is conquering new outlet markets for the ‘reduction of the constant trade surplus, which has placed growing pressure on the exchange rate over the last few years’ (Bellabona/Spigarelli 2007: 94). The concept of going global is one important factor that explains the vast growth of Chinese FDI in Africa. Originally, this occurred mainly through Chinese state-owned companies investing into joint ventures with African state-owned companies for the purpose of accessing raw material resources (van Dijk 2009b). However, the Chinese government also intensified their pushing of private firms to establish their businesses in Africa (Wang/Zou 2014, van Dijk 2009b.). The growing importance of Chinese FDI and its expected effects on African economies and society are being discussed in-depth in the following chapters.

2.3 Chinese FDI and where it goes

Chinese FDI in Africa is still low relative to flows from other countries, especially the U.S., France, or Great Britain. That said, the growth of Chinese FDI in the last decade has been remarkable (Busse et al. 2014). While China invested about $491 million in 2003, it was already over $32 billion in 2014 and over $43 billion in 2017 (UNHABITAT 2019). Today, China is the most significant investor in developing African nations. A study published by Yaw Baah and Jauch (2009: 12) examining 10 African countries found that Chinese investments are ‘concentrated mostly in the energy, mining, manufacturing, construction, retail and finance sectors’. This reflects China’s primary concern, which as aforementioned is access to raw materials (Carmody/Owusu 2007). Most of these firms, which export raw material to China, are state-owned corporations. One example is Sinopec, one of the world’s largest oil companies, which is active in several African countries: Gabon, Sudan, Ethiopia, Cameroon, and Angola (Sinopec 2020). In Angola, Sinopec wanted to exclusively deliver its refinery to the Chinese market, which then led to a conflict with the Angolan authorities. The Angolan government wanted to deliver the national market as well (Grimm 2014). In addition to investments in refineries or mines, China is very active in infrastructure building, including railways, roads, telecommunication, and facility construction projects like government buildings, stadiums, hospitals, schools, and others (Biggeri and Sanfilippo 2009). As part of the Belt and Road Initiative, China has financed more than 3,000 infrastructure projects. The most famous and

significant Chinese railway projects are ‘the Mombasa-Nairobi Railway in Kenya and the Addis Ababa Djibouti Railway in Ethiopia, the first electrified railway in Africa’

(The Diplomat 2019). ‘Chinese construction projects in Africa (…) are usually carried out by State Owned Enterprises (SOE) and they often resort to the utilization of large numbers of Chinese workers’ (Yaw Baah and Jauch 2009: 12). This financing is often hybrid, as China both investments and provides financial aid to African states and Chinese firms. This predominantly occurs in the form of ‘grants, zero-interest loans, debt relief, and concessional loans as well as preferential export credits, market-rate export buyers’ credits, and commercial loans from Chinese banks’ (Busse et al. 2014:

7). This practice, known as ‘Debt-Trap Diplomacy’, is often criticised. Former head of the IMF Christine Lagarde has pointed out that infrastructure investments can lead to a problematic increase in debt and that China’s Belt and Road Initiative should only be established where it is sustainable (Bräutigam 2020). However, research by Bräutigam and Hwang (2016: 21), who have analyzed more than 1000 Chinese loans, found that they ‘have not seen any examples where they would say the Chinese deliberately entangled another country in debt, and then used that debt to extract unfair or strategic advantages of some kind in Africa’. In addition to the large-scale infrastructure projects, though, smaller investors in Africa are growing in importance as well: ‘While the average size of investments in the year 2000 was almost $2 million, this figure decreased to approximately $1.4 million in 2006’ (Kragelund/ van Dijk 2009: 89). These smaller Chinese entrepreneurs are often shopkeepers, for example – private business owners buying inexpensive consumer goods from China (Yaw Baah and Jauch 2009).

In summary, China’s investing channels are varied, and they are controversially points of discussion in public debate. Not only is the U.S. extremely critical of China’s investments in Africa, but other western governments like those of the UK or France are concerned about it as well: ‘They often perceive China as a resource and energy-hungry giant, an exploiter of corrupt and incompetent governments, a trade opportunist, and a massive polluter of the African environment’ (Aljazeera 2019).

African views on Chinese investments are much more positive, and they view western criticisms of them with reservations.

2.4 Chinese FDI: The African perspective

African states’ positive attitudes towards China’s engagement can be explained by many different factors. First, China gives African states an alternative to traditional western investors in terms of cultural aspects and economic interests. It is often argued that Chinese enterprises focus on outcomes rather than processes (Corkin/Burke 2006). This is why projects by Chinese firms are implemented very quickly – which does not mean that these investments apply only to short-term periods. Chinese state-owned enterprises do their investments with a long-term perspective, while traditional Anglo-Saxon enterprises base their investments with focus on quick returns (Kragelund/ van Dijk 2009). These are important factors explaining African governments’ support of Chinese engagement in their countries, as especially large infrastructure projects were completed in just several years: ‘There rarely has been such rapid and intense investment in African infrastructure as is going on,’ as Reisen (2007: 3) emphasized in his policy brief. Another important property of Chinese engagement, which is generally appreciated by African heads of state, is the concept of ‘non-interference’. This means that Chinese investments are not linked to political conditions. It is seen as one important selling point to African elites because ‘it is a distinguishing feature from Western aid’ (Grimm 2014: 67).

China’s non-interference strategy is also reflected in the key principles of the South- South Cooperation: mutual respect, equality, and a win-win situation. ‘In the Chinese official rhetoric, these principles often come in the wording of non-interference (as a consequence of mutual respect), and mutual benefits’ (Grimm 2014: 67). It is exactly this strategy that is often criticized. While Western investors are more concerned about human rights practices in the receiving country, for example, China does not prioritise social responsibility (Zhao 2014). African states have serious reservations against these critiques. They see China as a partner that provides much-needed liquidity without any political conditionality (Aljazeera 2019). Consequently, relations among Chinese enterprises, the Chinese government, and African governments can be described as tight in most cases. Since 2000, these contacts have been formalized in the Forum on China-Africa Cooperation (FOCAC), a triennial conference that has already produced substantial results. In 2018, China’s minister, president Xi Jinping, promised the African states $60 billion. This sum includes support for Chinese FDI in the scope of 10 billion dollars in the next several years (Neue Zürcher Zeitung 2018). That African states have an interest in cooperating with China is shown by the fact that nearly 50 African states participate in these

congresses. The African Union (AU), which connects 53 African states, has even become an observer of the FOCAC process in recent years. The goal of this observer status is ‘paving the way for closer forms of collaboration’ (SAIIA 2015). In 2015, China and the African Union even ‘signed an agreement to connect major capital cities through transport routes, and collaboration was further expanded in May 2015 when China officially opened its permanent mission to the AU’ (SAIIA 2015). These examples show that policy-makers in African countries may affect the amount of inflow through promotion of it. They can also attract them, though, by providing investors with optimal conditions. Before the 1990s, African countries did attract multinational companies principally because of their accessible natural resources and the size of their domestic market. As Morisset (2001: ii), showed, however, some sub- Saharan countries were able to generate attention among international investors by improving their business environment: ‘In the 1990s, Mali, Mozambique, Namibia and Senegal attracted substantial foreign direct investment - more so than countries with bigger domestic markets and greater natural resources’. This could have been because these countries liberalized trade, launched attractive privatization programs, or adopted international agreements for FDI (Morisset 2001). There are then two different ways that policy makers influence the amount of FDI inflowing to their countries. That said, what do African people think about China’s growing presence and its direct investments in their countries? Are their perceptions as good as those of their governments or as bad as those of western states? The next chapter explains the many reasons popular opinion analysis is important.

2.5 Why does popular opinion matter?

As previously mentioned, findings about FDI effects vary. Blomström and Kokko (1998), for instance, emphasized that FDI can give developing countries easy access to new technologies and skills, which then can empower local capabilities and make them more competitive in the increasingly globalized world market (Dupasquier/Osakwe 2006). Other papers have shown that the Chinese presence has also ‘negatively affected local traders as well as local manufacturers who could not withstand the Chinese competition. As a result, thousands of jobs were lost in countries like Zambia, Ghana, South Africa, Nigeria, Ethiopia and Sudan’ (van Dijk 2009c: 169). As African citizens are directly affected by these economic changes, the measurement of popular opinion can provide more information about direct effects of Chinese FDI inflows to the African continent. Popular opinion can even help to

foresee future developments in Sino-African relations, as China’s growth strategy depends on their cooperation with African people as well. The same accounts for African governments that have the power to choose whether to actively promote FDI inflows. The linkage is built on several classical studies which have shown that popular support is essential to the policy-making process. Several researchers have measured the strong effects of public opinion on government policies at different levels. Miller and Stokes (1963), for example, found high correlations between constituency opinions and congressmen in the United States – including for economic welfare issues. The driving force is the idea of electoral accountability, which means that elected leaders in a democratic country does not deviate far from voters’ opinions (Downs 1957). Different levels of acceptance may be one factor explaining why direct investments are not evenly distributed throughout the continent. In some African countries, the amount of Chinese FDI is very high, while other states receive almost nothing (UNHABITAT 2019). In fact, China-African ties have become an increasingly important dimension in political debates in several African countries in the last years. Take Zambia for example: ‘The crux of the 2006 presidential campaign hinged on the China question, with opposition candidate Michael Sata vowing to expel all Chinese traders from the country if elected’

(Gadzala/Hanusch 2010: 7). The authors reported similar events in other African countries.

2.6 China’s surprisingly positive image in Africa

Despite the growing importance of popular opinion about Chinese engagement in Africa, knowledge about people’s perception of it remains limited. Sautman and Hairong (2008) published the first empirical evidence on the issue by showing people’s attitudes towards China in their countries. They used survey data collected by US-based firms and Cameroonian researchers. Sautman and Hairong (2008) combined these data in their own survey, including responses of 2,000 African university students in nine African countries. In contrast to presumed negative attitudes towards China, the poll showed that views of China were more positive than views of the United States: ‘Asked whether American influence was a good or bad thing, Africans (except in South Africa) favored Chinese influence’

(Sautman/Hairong 2008: 731). Although most respondents accepted U.S. influence in their countries, China enjoyed much larger support. However, because both the number of countries studied and the case selection were extremely limited, these

findings lack validity. The Afrobaromter social survey program has delivered the best and broadest data so far. The survey in Round six (2015/2016) included interviews with over 50,000 respondents in 36 African countries, representing the views of more than three-fourths of the continent’s population (Afrobarometer 2016).

Similar to the findings published by Sautman and Hairong (2008), the Afrobarometer results showed that general popular support for China’s investments is surprisingly high. Two-thirds of Africans say China’s influence is somewhat or very positive (Afrobarometer 2016). However, measuring attitudes toward China does not sufficient explanation force. More relevant is research on factors that influence this popular support. These findings would allow us to understand why individuals in Africa support China’s growing influence on African societies. It would also provide us important insights in China’s investment mechanisms, as we would be able to evaluate who benefits from direct investments and who does not. This research attempts to close this knowledge gap by analysing factors driving people’s attitudes toward China on both micro and macro levels. Special focus is paid to the amount of inflowing FDI and whether China is ultimately able to ‘buy’ support from African people.

3 Theory and Hypotheses

The first part of this analysis attempts to determine if the amount of inflowing Chinese FDI can shape how people perceive China. As these foreign direct investments can be important drivers of economic development and knowledge transfers, it makes sense that the amount of inflowing FDI does affect people’s opinions of China. Indeed, literature from foreign aid research has shown that money flows into developing countries can positively shape public opinion there. The second part of the analysis focuses on the individual level. China’s presence in Africa has influenced domestic labor markets with different consequences. These developments are likely a result of the increasingly globalized economy and the idea that globalization has created both winners and losers. Socio economic factors are thus important to analyze, as they can show whether these economic changes are also observable on the individual level and if they affect people’s views of China.

3.1 FDI and its macro-level effects

Most econometric analyses have investigated whether inward FDI leads to economic growth in developing countries. Even if findings on that topic vary, there are many quality arguments showing that foreign direct investments positively affect African economies. Modernization theories, which can also be classified as neoclassical growth theories, have argued that FDI can promote economic growth in developing countries: ‘The modernization perspective is based on a fundamental principle in economics that economic growth requires capital investment’ (Adams 2009: 940).

They emphasize the importance of multinational enterprises (MNEs), which can have positive spill-over effects on domestic firms in developing countries. Harrison (1995), for example, found evidence in Morocco and Venezuela that international firms are more productive and have higher productivity growths than domestic ones. This MNE expertise can carry over to domestic counterparts. In one of the most cited papers in this area, Borensztein et al (1998: 117) viewed FDI as an ‘important vehicle for the transfer of technology, contributing to growth in larger measure than domestic investment’. Consequently, local firms ‘may be able to improve their productivity as a result of forward or backward linkages with MNC affiliates, they may imitate MNC technologies, or hire workers trained by MNCs’ (Blomström 2002:

2). Additionally, Multinational Corporations (MNC) are able to break down monopolies and stimulate competition, which then can force local firms to ‘adopt some of the marketing techniques used by MNCs, either on the local market or internationally’ (Blomström/Kokko 1998: 2). Another important and more visible aspect of Chinese investments is infrastructure. China has become Africa’s key partner in the building of infrastructure. According to Kirchherr et al. (2016), Chinese players have provided approximately two-thirds of all infrastructure investments since 2007, and nearly 35 countries have made infrastructure deals with China. The largest recipients are Nigeria, Angola, Ethiopia, and Sudan (Foster et al. 2009), and

‘the finance is channeled primarily through the China Export-Import Bank on terms that are marginally concessional, though significantly less so than those associated with ODA’ (Foster et al. 2009: 11). Most of these investments are concentrated on three sectors: power – especially hydropower and transport – railways, and telecommunication (Foster et al. 2009). There are 242 power projects for which contracts have been awarded that are currently tracked, which corresponds to an investment value of $313.1 billion (Power Links 2019). The leading company behind these investments is Sinohydro, a Chinese SOE. The company ‘completed its first

large hydropower project in 2003 and is now associated with over 122 international projects’ (Tan-Mullins 2017 et al.: 465). These power investments are highly needed in Sub-Saharan Africa because the power sector is the continent’s major infrastructure deficit. Alves (2013: 210)’s comparison exemplified this deficit: ‘The combined power generation of Sub-Saharan African countries (total population 800 million) equals roughly that of Spain (population 45 million). The sector is plagued by lack of interconnectivity of electricity grids and by frequent outages’. Providing more people with access to electricity can have a direct positive impact, as it can help facilitate escape from persistent poverty (Pachauri et al. 2013). Thus, these Chinese investments in power infrastructure projects are highly visible and can positively influence people’s attitudes toward China. Similar arguments account for investments in transport infrastructure, which Sub-Saharan Africa desperately needs.

Ports lack capacity and ‘railroad density is extremely sparse for the continent's population and for the needs of extractive industries’ (Alves 2013: 210). China has invested billions in new railway projects on the African continent in recent decades.

The most significant railway projects have been the Mombasa-Nairobi Standard Gauge Railway built in Kenya and the Addis Ababa-Djibouti Railway, which is the first electrified railway of its kind in Africa (The Diplomat 2019). Particularly in this railway sector, China is also highly visible because many of these railways are operated by Chinese SOEs – the China Railway Group Ltd. and China Civil Engineering Construction Corporation (The Ethiopian Herald 2019). As these transport projects help to solve logistic difficulties in African countries and influence the daily lives of African populations, it could be an important driver of people’s perception about China’s growing influence in their countries. Another argument for this connection can be found in foreign aid literature. Goldsmith et al. (2012), for example, showed that a United States aid program targeted to fight HIV and AIDS improved perceptions of the United States. Therefore, foreign aid ‘can serve an important strategic goal for those countries that give it: fostering positive perceptions among foreign publics. By doing good, a country can do well’ (Goldsmith et al. 2012:

1). This approach is certainly not fully applicable to FDI, but it does fundamentally show that money flows to developing countries can positively shape public opinions there.

H1: Chinese investments in a specific country/region positively affect people’s perceptions of China’s growing economic and political influence.

Research testing of this assumption remains limited. Hanusch (2012) did attempt to analyse the connection between the amount of Chinese FDI and people’s attitudes toward China using Afrobarometer data, which is also used in this research. He confirmed his expectations ‘that greater levels of Chinese FDI herald greater African approval ratings of the Chinese overall’ (Hanusch 2012: 14). However, this relationship is weak and statistically not significant, likely due to the exceedingly small number of cases studied on the country level. To solely use the amount of inflowing FDI on the country level is inaccurate. As prior research has shown, especially in the foreign aid area it is essential to study on as small a scale as possible.

Tingley (2012: 393), for example, noted the following in his dissertation: ‘When people were reminded of the benefits that foreign aid brings to the US economy, they become more supportive of foreign aid.’ Capello/Perucca (2018) even argued that

‘once people are aware of a policy, they have to be to some extent satisfied with the outcomes of the EU actions, in order to feel part of the European project’

(Capello/Perucca 2018: 5). This research attempts to overcome this awareness problem by examining more precisely where Chinese FDI flows by focusing on specific regions and on scales other than countries. This paper makes a major effort to disaggregate FDI data.

Although investments from China are viewed as positive in general, it is most likely that there are differences in views of China’s engagement based on socio-economic status. That is why this research seeks differentiate between the macro and micro levels. How socio-economic factors influence people’s perceptions of China’s engagement is explained in the next chapter.

3.2 Socio economic factors driving popular opinion

There remains but little knowledge on micro-level factors driving popular opinion on inward FDI. In his research, Hanusch (2012) used prior Afrobarometer data to focus on perceptions of China’s role in Africa in connection with support for human rights and democracy. He found strong evidence that respondents who are concerned about human rights have less favorable attitudes towards China. Larue (2019) used the Afrobarometer data to analyze if individual affinity for economic, social, and cultural rights is an important indicator of individual attitudes toward China’s engagement in sub-Saharan Africa. He found only little support for this connection and emphasized that people’s attitudes towards China’s influence are economically

driven. Sautman and Hairong (2008) attempted to determine if there is variance in people’s perceptions based on age or gender. They concluded that ‘people over 55 were 9.6 per cent more likely to think China’s policies more harmful than those of western countries and 4.4 per cent more likely to view China as potentially harmful to Africa, compared to those under 25; males were 14% less likely to see China’s policies as harmful than female respondents’ (Sautman/Hairong 2008: 734). These findings are interesting but have little explanation force, as gender and age do not say much about why people are more likely to support China’s engagement in their countries. As FDI inflow is also a consequence of the increasingly globalized world, socioeconomic factors should be relevant to explanations of the differences in how people perceive China’s active role in Africa. For example, in contrast to modernization theories, the aforementioned dependency theories have argued that FDI can have negative effects on the distribution of incomes (Adams 2009).

Globalization has caused winners but also losers. Academics and policymakers have expressed concern that increasing globalization – both in the form of FDI and international trade – is causing dramatic changes in labor demand in the developed world (Driffield/Taylor 2000). This means that demand for unskilled workers has been and will continue to decline. While they were referencing highly developed western countries there, the concept can be transferred to developing countries as well. Before the 1950s, FDI was concentrated in the primary sector and resource- based manufacturing. ‘The availability of natural resources was the most important host-country determinant of FDI. In the 1980s and 1990s, this market orientation was continually shifting toward services and technology-intensive manufacturing (Noorbakhsh et al. 2001: 1594/1595). The consequence of this new orientation of higher-level sectors also signified a shift in labor markets. As Pfeffermann and Madarassy (1992) argued, a result of new technological advances and the concomitant shift of FDI toward more capital – knowledge – and skill-intensive industries is that the presence of a well-educated pool of labor has become increasingly attractive to TNCs relative to how low labour costs by itself (Noorbakhsh et al. 2001). In other words, so-called low-skilled workers are now in less demand by TNCs, which are the main products of foreign direct investments.

For the case of China, this trend is even more dramatic, as – in contrast to western companies – Chinese companies ‘tended to keep local recruiting to a minimum and recruited mostly their own professionals and laborers’ (Zhao 2014: 11). For example, Chinese companies in Angola hired 70–80 percent of its workers from their home country. The reason for this is that China itself continues to have a problem with

underemployment, especially in rural areas (Zhao 2014). That the strategy to counteract this problem has been to send Chinese workers to African countries is thus not particularly surprising. Another reason why low-skilled workers might tend to be more critical toward China is poor working conditions. African workers in Chinese MNCs often work under dangerous circumstances, especially in the mining industry, and they work for exceedingly low wages. In 2008, mining workers went on strike in the Chinese-owned Chambishi copper mine and fought for higher wages:

‘About 500 miners demonstrated and stones were thrown to members of management of !the mining company, who wanted to talk to the miners’ (van Dijk 2009a: 171). Another aspect was demonstrated by Alden (2005). He emphasised that African domestic industry sectors lose from the spread of Chinese influence on African markets. He argued that ‘the balance of trade favors China as local industries and merchants have been hit hard by the flood of inexpensive Chinese wholesale and retail shops used to establish networks to sell goods’ (Adisu et al. 2010: 5). Tull (2016) added that local manufactures cannot compete with Chinese manufactures, as they have low production costs and market prices (Adisu et al. 2010). Traditional primary production sectors in African countries have been weakened as well, according to van Dijk (2012a). Harrison and Aitken (1999) found that foreign investments can generate crowding out effects, as it ‘increases in foreign ownership negatively affect the productivity of wholly domestically owned firms in the same industry’

(Harrison/Aitken 1999: 616). This problem is especially visible in the textile production sector. Today, most textile manufacturers in Africa are of Asian origin (Xiaoyang 2014). Asian countries, including China, are ‘shaping the development of the whole cotton-textile-apparel value chain in southeast Africa’ (Xiaoyang 2014: 6).

The African manufacturers market share has been reduced with China’s rapid growth of low-cost textile production (Agri Eneji et al. 2012). Selling consumer products in general has become more important to China: ‘The Chinese have developed a network of small Chinese traders, which assures sales in regions where other salesmen don’t come anymore’ (van Dijk 2009b: 12). Similar trends can be observed in the agricultural sector where Chinese investments have increased significantly in recent decades (Buckley 2013). Many researchers have seen great potential in China’s engagement in the agricultural sector, as it may help to improve domestic firms’ practices and technical knowledge. That said. ‘it risks increasing the vulnerability of traditional subsistence farmers and smallholders’

(Bräutigam/Xiaoyang 2009: 687). All these factors suggest that traditionally important labor markets in African societies have been challenged by the increasing

Chinese presence. Consequentially, it is assumed that low-skilled workers benefit less from Chinese FDI in their countries and are thus are more critical toward China’s engagement.

H2: Low-skilled workers have more critical perceptions towards the growing economic influence of China in their countries than workers with higher

skilled jobs.

Connected to this first hypothesis is the level of education, which is assumed to influence popular opinion as well. It is argued that the degree of education might be relevant as well; especially in developing countries, education level is connected with how close citizens are to the political establishment. Pandya (2016) found increasing support for inward FDI with a higher level of education. This connection can be explained again with globalization theories. According to Gabel (1998), human capital, which includes education, is positively correlated with support for economic integration. He based the influence of human capital on the ability of individuals to survive in a highly competitive labor market that involves a liberalized economic policy. As FDI flows are increasingly spent on capital – industries that are both knowledge and skill-intensive – well-educated people become increasingly attractive for multinationals (Pfeffermann and Madarassy 1992; Noorbakhsh et al. 2001). One more important point to make is that education in sub-Saharan Africa is still underdeveloped; disparities in these societies are high (Majgaard/Mingat 2012):

Almost 60% of youth between the ages of about 15 and 17 are not in school (UIS Unesco 2020). Thus, education level in sub-Saharan Africa can say much about the social status of a society. It is assumed that Africans with a higher educational background are more positive toward China’s growing economic and political influence in their countries.

H3: Citizens with a lower educational level have a more critical attitude toward the growing political and economic influence of China in their countries than

higher-educated citizens.

Another important driver might be the conditions in which people live. Chinese FDI is often concentrated in specific regions – the so-called special economic zones (SEZs) where China conducts massive investments (World Investment Report 2019). These zones are often located in urban or urbanizing areas. In Zambia, for example, where

China seeks copper and other raw materials, most of the investments flow exclusively to said Copperbelt region. Other regions in the country, in contrast, receive nothing. In the fourth hypothesis, it is assumed that people living in urban areas are more positive toward China’s engagement than people living in rural areas.

H4: People living in urban have a more positive attitude towards China’s increased political and economic influence than people living in rural areas.

In addition to the places where people live and work, individual economic and social status is likely incredibly important as well. Aligning with the consequences of globalization that low-skilled workers and low-educated people benefit less from inward FDI, it stands to reason that individual economic situation also plays an important role. Melgar et al. (2012) found empirical evidence showing that people with a low personal income tend to support protectionist measures more than people with higher incomes. However, income as an objective indicator has shown to be an insufficiently accurate measurement, as wellbeing can be perceived individually.

Individual living conditions can be defined as ‘the individual possession of resources in the form of money, goods, services, mental and physical energy, social relations, physical security etc. by means of which the individual person may control and consciously direct his/her living conditions in so far as the necessary arenas are available’ (Anderson/Poppel 2002: 201). It is assumed that people who rate their current individual living conditions as good have more positive perceptions of China’s growing political and economic influence in their own countries.

H5: People who rate their current individual living situation as good are more positive toward China’s engagement than people who perceive their living

conditions as bad.

Individual living conditions are not the only factors important in shaping people’s attitudes towards China; individual perception of the economic situation in a country and how it has changed can be a relevant driver as well. Representatives of economic voting theories have argued that voters' perceptions of economic conditions are related to their political attitudes. In his research, Gabel (1997: 92) concluded ‘that it is the ‘subjective’ economy, as perceived by EU citizens, rather than the ‘objective’

economy, as measured by economic indicators, that influences support for European integration.’ Beaulieu et al. (2005) found out that people in Latin-American countries