INVESTING IN THE FUTURE: THE LOGIC OF CHINA’S INTERNATIONAL SCHOLARSHIP AID ALLOCATION

Abstract

What are the motivations behind China’s scholarship aid allocation to international students? This thesis contributes to the literature of foreign aid to argue that Chinese educational aid to foreign students is politically motivated, privileges China’s closest allies, and targets less developed countries. By leveraging Ministry of Education student-level data over the years 2003 to 2018, this thesis constructs a panel dataset of 190 countries and 2947 country-year observations. A fixed effects model reveals that China’s scholarship aid allocation to international students is highly associated with Belt and Road Initiative (BRI) membership, high total trade between China and the aid recipient country, and low GDP per capita of the aid recipient country. These findings shed light on how governments can use scholarship aid as a low-cost, long-term investment strategy to expand political influence abroad and into future generations. China’s rise as an international student hub has striking implications for the future of global talent flows as more international students from less developed countries choose China for study over Western destinations like the United States.