This chapter seeks to first empirically establish the relationship between countries’ market failures and their level of infrastructure spending. It then seeks to test the most likely explanations for Chinese foreign spending based on explanations relating to FDI from Western MNCs. Notably, the results do not yield convincing results that these variables can account for Chinese foreign spending patterns. This finding supports the need for a novel approach to Chinese foreign spending in the context of the Belt and Road Initiative.

The chapter begins with a brief summary of the theory and findings. It then examines whether the strong relationship between electoral autocracies and Chinese foreign spending is evident among a wider range of issues based on analysis of United Nations General Assembly votes. The findings indicate that electoral autocracies have displayed a markedly higher propensity to vote with China since the launch of the Belt and Road Initiative. The chapter then discusses theoretical, policy, and business implications in turn.

To explain countries’ varying participation in the Belt and Road Initiative, this chapter begins with a discussion of recipient country characteristics that impact the demand for Chinese spending, including the political regime, clientelism, and the public-private orientation of the corporate sector. It then discusses the supply-side factors that influence Chinese foreign spending, including the Chinese Communist Party (CCP), state-owned entities (e.g., SOEs), and private firms. Finally, it evaluates the compatibility of these demand and supply characteristics. The key prediction is that electoral autocracies will display the strongest compatibility with Chinese foreign construction spending. This is amplified when the leaders of these regimes have a weak or insecure hold on power. Electoral autocracies are also predicted to be the most avid adopters of Chinese standards stemming from their eagerness for Chinese infrastructure spending.

This chapter establishes the empirical facts regarding political regimes and the prevalence of clientelism and the public-private orientation of the corporate sector. It begins by showing that electoral autocracies constitute around half of all developing countries during the 2010s, the most of any regime type. They are especially prevalent in Africa and Asia. The theory posits that clientelism plays an important role in driving Chinese foreign infrastructure spending. Several widely used proxies for clientelism establish that it is most prevalent in electoral autocracies. The theory also posits state control of the corporate sector is important to attracting Chinese foreign spending. A variety of measures are used to establish that state ownership of the corporate sector is significantly higher in autocracies than in democracies, especially in industries related to infrastructure. Overall, this chapter provides robust evidence about the characteristics of political regimes posited to influence Chinese infrastructure spending.

The aim of this chapter is to trace the link between political regimes and the initiation and implementation of BRI projects. The cases in this chapter provide context and detail for the quantitative findings presented in Chapters 5 through 7. The chapter includes five country cases that map the evolving policies toward Chinese foreign investment and construction projects from before 2013 to after, including the United Arab Emirates (closed autocracy), Djibouti (electoral autocracy in which the leader has a secure hold on power), Malaysia (electoral autocracy in which the leader has an insecure hold on power), Indonesia (electoral democracy), and Greece (liberal democracy). Each case represents a strategically important partner to China’s Belt and Road Initiative and includes a focused analysis and comparison of the construction of a port-related development project.

The key question this chapter addresses is which countries are the most receptive to Chinese foreign infrastructure spending? I theorize electoral autocracies will be the most avid recipients. This chapter analyzes Chinese foreign spending since the introduction of the BRI at the end of 2013 with data from the China Global Investment Tracker (CGIT) dataset. Multivariate tests indicate electoral autocracies are the major recipients during the BRI timeframe, from 2014 to 2019. Extending the timeframe to 2005 to 2019, the findings indicate a substantive difference in the relationship between Chinese foreign construction spending and electoral autocracies that occurs with the initiation of the BRI. Logistics performance indicators also show electoral autocracies display the greatest improvement from before to after the introduction of the BRI. While the share of Chinese exports flowing to electoral autocracies increases during the BRI time period, it is not possible to conclude this is a deviation from previous trends; more time is needed to establish confidence for these effects. The main takeaway is the exceptional role electoral autocracies play in attracting Chinese foreign spending in the context of the BRI, especially when the leaders have an insecure hold on power.