The Legal Character of Sino-African Tied Aid: Cunning Fox or Wise Dragon?

Sino-African trade has seen a fifty-fold increase in the years 1999 to 2008. China became the second most important trading partner for the African economy and already overtook the US as the most important trading partner in some African regions. However, all of this trade is taking place independent from legal regulation by a preferential or other trade agreement. Interestingly, Sino-African trade has seen particular increase in countries that have agreed to tied aid arrangements with China. Taking a closer look at these tied aid arrangements (the so-called Angola-Model) reveals, that some aspects might indeed have a positive effect on Sino-African trade in general. Several grey areas might potentially conflict with WTO-law.

However, tied aid is excluded from the GATS, the GATT, and the GPA – in other words, it is outside the sphere of WTO-law. The paper analyses three critical aspects of the Angola-Model version of tied aid with reference to WTO-law, and elaborates the importance of regulating trade-distorting aspects of modern tied aid.