Paper short abstract:

This paper uses quantitative analysis of Chinese infrastructure contracts to highlight the blowback that Chinese engineering and construction firms face in liberal democracies, which is paradoxically worsened by China’s diplomatic overtures via the Belt and Road Initiative (BRI).

Paper long abstract:

China’s Belt and Road Initiative (BRI) has two interconnected goals: increasing China’s diplomatic clout and expanding the presence of Chinese companies overseas. However, contrary to the intuitive notion that successful diplomacy also creates economic opportunities, we argue that when the partner country is a liberal democracy, these goals conflict. Using a global panel dataset of Chinese infrastructure contracts from 2004 to 2019, we first hypothesize and quantitatively uncover a negative relationship between host state liberal democratic institutions and infrastructure contracts won by Chinese firms overseas. Second, we test whether host states’ joining the BRI affects contract volumes. Our results indicate that in states with more democratic institutions, host government joining of the BRI is in fact negatively associated with infrastructure contracts for Chinese companies, pointing to blowback in liberal democracies against the BRI. This study contributes to understanding of the complex relationship between diplomacy, development, and commerce, the domestic politics of foreign countries in shaping China’s overseas presence, and the factors driving China’s overseas infrastructure contracting.