Does crisis lending help China win friends and influence people?

Abstract

China has recently emerged as an international lender of last resort to economies in distress. Beijing's crisis loans have both economic and geopolitical objectives, which include deepening economic integration with recipient countries and increasing political support for China on the international stage. We examine whether making China's crisis lending salient influences public support for stronger economic ties with China. We fielded survey experiments in three countries that have received emergency financial assistance from Beijing-Argentina, Turkey, and Russia-randomly reminding some respondents about this assistance. On average, priming respondents about Chinese crisis lending does not increase support for stronger economic ties with China. To probe whether the null average effects mask countervailing responses, we conduct exploratory subgroup analyses by political alignment. These analyses suggest that reminders about Chinese crisis lending can polarize attitudes; specifically, they reduce support for economic cooperation with China among those who oppose their country's incumbent government. Thus, rather than uniformly improving its image, being primed to think about Chinese lending worsens the country's standing as an economic partner among some segments of the population. This suggests that, when it comes to public opinion, there are important limits to China's "bailout" diplomacy.