How Did Multinational Mining Enterprises from China Affect the Economic Development in Host Developing Countries?

Xingyu Zhang; Qiwen Shao; Yiheng Lin; Zixu Wang

doi:10.54691/nd4hpj39

Authors

Xingyu Zhang
Qiwen Shao
Yiheng Lin
Zixu Wang

DOI:

https://doi.org/10.54691/nd4hpj39

Keywords:

Chinese Multinational Enterprises; Chinese Outward Direct Investment; Mining Activities; Local Economic Development; Nightlight.

Abstract

This paper examines the impact of Chinese multinational mining enterprises on local economic development. We construct a novel database linking global mining activities to their ultimate owners, finding that Chinese firms target underdeveloped, resource-intensive regions. Using satellite data on nighttime lights and population, our econometric analysis reveals that Chinese mines significantly boost local economic activity. A new Chinese-owned mine increases both light intensity and population density in low and lower-middle-income countries. This positive, localized effect is not observed for investments from other nations, suggesting Chinese mining can be a unique catalyst for economic growth in developing regions.

Downloads

Download data is not yet available.

References

[1] AidData, ‘Dataset track China’s investments in critical minerals’, https://www.aiddata.org/blog/new-aiddata-report-dataset-track-chinas-investments-in-critical-minerals, Jan. 2025. Accessed: June 16, 2025. [Online]. Available: https://www.aiddata.org/blog/ new-aiddata-report-dataset-track-chinas-investments-in-critical-minerals

[2] X. Fu, ‘Does FDI provide spoils, or does it just spoil? - Business - Chinadaily.com.cn’. Accessed: Mar. 02, 2025. [Online]. Available: https://www.chinadaily.com.cn/business/2013-01/28/content_16180216.htm

[3] T. Wegenast, M. Krauser, G. Strüver, and J. Giesen, ‘At Africa’s expense? Disaggregating the employment effects of Chinese mining operations in sub-Saharan Africa’, World Dev., vol. 118, pp. 39–51, June 2019, doi: 10.1016/j.worlddev.2019.02.007.

[4] P. J. Buckley, L. J. Clegg, A. R. Cross, X. Liu, H. Voss, and P. Zheng, ‘The determinants of Chinese outward foreign direct investment’, J. Int. Bus. Stud., vol. 38, no. 4, pp. 499–518, July 2007, doi: 10.1057/palgrave.jibs.8400277.

[5] J. Li, A. Van Assche, L. Li, and G. Qian, ‘Foreign direct investment along the Belt and Road: A political economy perspective’, J. Int. Bus. Stud., vol. 53, no. 5, pp. 902–919, July 2022, doi: 10.1057/s41267-021-00435-0.

[6] M. Ericsson, O. Löf, and A. Löf, ‘Chinese control over African and global mining-past, present and future’, Miner. Econ., vol. 33, no. 1, pp. 153–181, July 2020, doi: 10.1007/s13563-020-00233-4.

[7] R. A. Hodge, M. Ericsson, O. Löf, A. Löf, and P. Semkowich, ‘The global mining industry: corporate profile, complexity, and change’, Miner. Econ., vol. 35, no. 3, pp. 587–606, Dec. 2022, doi: 10.1007/s13563-022-00343-1.

[8] Y. Hu and J. Yao, ‘Illuminating economic growth’, J. Econom., vol. 228, no. 2, pp. 359–378, June 2022, doi: 10.1016/j.jeconom.2021.05.007.

[9] S. Jasansky, M. Lieber, S. Giljum, and V. Maus, ‘An open database on global coal and metal mine production’, Sci. Data, vol. 10, no. 1, p. 52, Jan. 2023, doi: 10.1038/s41597-023-01965-y.

[10] V. Maus et al., ‘A global-scale data set of mining areas’, Sci. Data, vol. 7, no. 1, p. 289, Sept. 2020, doi: 10.1038/s41597-020-00624-w.

[11] S. Giljum et al., ‘A pantropical assessment of deforestation caused by industrial mining’, Proc. Natl. Acad. Sci., vol. 119, no. 38, p. e2118273119, Sept. 2022, doi: 10.1073/pnas.2118273119.

[12] V. Lebakula et al., ‘LandScan Global 30 Arcsecond Annual Global Gridded Population Datasets from 2000 to 2022’, Sci. Data, vol. 12, no. 1, p. 495, Mar. 2025, doi: 10.1038/s41597-025-04817-z.

[13] Z. Chen et al., ‘An extended time series (2000–2018) of global NPP-VIIRS-like nighttime light data from a cross-sensor calibration’, Earth Syst. Sci. Data, vol. 13, no. 3, pp. 889–906, Mar. 2021, doi: 10.5194/essd-13-889-2021.

[14] R. J. R. Elliott, E. Strobl, and P. Sun, ‘The local impact of typhoons on economic activity in China: A view from outer space’, J. Urban Econ., vol. 88, pp. 50–66, July 2015, doi: 10.1016/j.jue.2015.05.001.

[15] C. He, J. Li, W. Wang, and P. Zhang, ‘Regional resilience during a trade war: The role of global connections and local networks’, J. World Bus., vol. 59, no. 5, p. 101567, Aug. 2024, doi: 10.1016/j.jwb.2024.101567.