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At Africa's Expense? Disaggregating the Social Impact of Chinese Mining Operations

Tim Wegenast, Georg Strüver, Juliane Giesen and Mario Krauser

No 308, GIGA Working Papers from GIGA German Institute of Global and Area Studies

Abstract: Qualitative studies and media reports suggest that the presence of Chinese oil or mining companies generates resentments among local extractive communities due to low wages, poor working conditions, environmental degradation, the employment of foreign labour, and perceived racial discrimination. At the same time, Chinese investment in the extractive sector appears to enhance local infrastructure. So far, these claims have not been empirically tested in a systematic way. Relying on novel data on the control-rights regimes of diamond, gold, and copper mines and geo-referenced information from Afrobarometer surveys, this paper examines whether Chinese-controlled mining promotes anti-Chinese sentiments among the local populations of sub-Saharan African countries. In addition, we test the effect of mining contractors' nationality on socio-economic indicators such as local employment rates and infrastructure levels. Our logistic regression analysis for the period 1997-2014 reveals that the effect of Chinese mining companies on African local development is ambiguous: while proximity to Chinese-operated mines is associated with anti-Chinese sentiments and unemployment, populations living close to Chinese mining areas enjoy better infrastructure, such as paved roads or piped water. Multilevel mixed-effects estimations using district-level data from the Demographic Health Survey for 20 sub-Saharan countries corroborate these findings.

Keywords: natural resources; Africa; China; mining; unemployment; infrastructure (search for similar items in EconPapers)
JEL-codes: O13 Q34 O55 L72 E24 O18 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-afr, nep-dev and nep-mac
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