This chapter examines whether the patterns observed for political regimes and Chinese infrastructure spending are also manifested by foreign aid and exports of Chinese digital technologies that promote the adoption of Chinese standards. Analysis of several different datasets consistently show electoral autocracies are the major recipients. The datasets include Chinese smart cities technologies exports, foreign aid in the information and communications technology sector, and foreign deals for Huawei’s cloud infrastructure and e-government services. These quantitative findings are supplemented by case studies of Malaysia (electoral autocracy) and Greece (liberal democracy).

To explain what drives the demand for Chinese infrastructure spending and the adoption of its digital standards among low- and middle-income countries, we must begin by considering how they effectively address market failures. A first set of market failures regards impediments to private investment for building infrastructure. Western multilateral development banks such as the World Bank commonly impose liberalizing conditionalities on recipient states. These can be politically problematic for rulers of autocratic countries that rely on state controls to retain their hold on power. China, by contrast, has an explicit policy of noninterference in the domestic politics of foreign nations. China’s own political motivations coupled with huge dollar reserves have enabled it to effectively address the market failures of autocracies in a politically palatable way. A second type of market failure regards transaction costs and coordination failures. These can be addressed via the adoption of digital technologies. China can leverage its preferential access to autocracies for infrastructure spending in order to promote the adoption of its digital and related technical standards.

The puzzle of this chapter is whether characteristics of BRI projects display patterns corresponding to a host country’s political regime. The prevailing counterargument is that BRI projects reflect primarily what China wants. The evidence presented in this chapter is based on a different dataset from the prior chapter and includes over 2,100 projects up through 2019 across 127 countries. For each project, ten characteristics were manually coded. The findings both corroborate the importance of electoral autocracies and also provide more detailed evidence for systematic differences in the structure of BRI projects depending on the political regime in which they are located. The analysis demonstrates clear and significant patterns between BRI project characteristics and political regimes as well as for strong versus weak electoral autocrats that are consistent with and extend the findings of the previous chapter.

In 2013, Xi Jinping announced the launch of the Maritime Silk Road Initiative while visiting Indonesia. However, Malaysia became a far more avid recipient of Chinese spending in the years afterward. What can account for this surprising outcome? In this opening chapter, Richard Carney explains that we should care about the answer to this puzzle because it can help us understand how China can acquire global influence by addressing developing countries’ enormous unmet demand for infrastructure and spread the adoption of its digital standards. In contrast to existing explanations that focus on the demand for foreign investment by private firms, Carney proposes a novel explanation for why demand for Chinese SOE-led investment varies across countries. He argues state versus private control over the delivery of clientelist resources varies across political regimes, and this affects the demand for Chinese infrastructure spending that is principally delivered by SOEs. He argues electoral autocracies, which hold semi-competitive elections, possess the highest demand due to their heavy reliance on clientelism coupled with a high level of state control over the corporate sector.