Chinese Investments in Developing Sector Decrease Inequality
December 12, 2018
A study done by the AidData institute at William and Mary College in Virginia showed that China’s investments in the developing sector between 2000 and 2014, unlike many western investments, reduce economic inequality in the targeted countries.
Financed by the UN, the Singapore Ministry of Education, the German Research Foundation, USAID, and several other foundations, the study collected data on Chinese projects in 138 countries, concluding: “We find that Chinese development projects in general, and Chinese transportation projects in particular, reduce economic inequality within and between sub-national localities,” and “produce positive economic spillover that leads to a more equal distribution of economic activity.”
“Beijing has demonstrated that it is both willing and able to address the unmet infrastructure financing needs of developing countries. These development projects—in particular, investments in highways, railways, roads, bridges, tunnels, and ports—could strengthen economic ties between rural and urban areas and thereby help to spread the benefits of economic growth to more remote and traditionally disadvantaged areas.”
“The findings from the study are encouraging: Chinese development projects—in particular, “connective infrastructure” projects like roads and bridges—are found to create a more equal distribution of economic activity within the provinces and districts where they were located.”