The Impact of Chinese Foreign Aid on OFAC Sanctions Effectiveness: Non-conditionality, Non-interference, and the Reality of Chinese Foreign Policy

Abstract: The analysis examines the impact of Chinese developmental and military aid on the effectiveness of the OFAC sanctions enforcement. Despite the official claims of China’s adherence to the principles of non-conditionality and non-interference, Chinese foreign policy in proactive reveals a pattern of using its aid as political and economic weapon to widen its sphere of influence by undermining the efficacy of US sanctions. The research employs a mixed-method approach, combining qualitative case studies with extensive quantitative analyses. It analyses over 100 OFAC sanctions programs from 62 countries along with the Chinese aid flows to these states over the time period between 2000 and 2018. The study focuses on the concepts of sanctions effectiveness, aid non-conditionality and sanctions busting. The quantitative analyses utilise the multinomial logistic regression and Bayesian regression methods to showcase the impact that Chinese aid has on the probability of various sanctions outcomes. The qualitative section examines precisely how China has circumvented sanctions in various states by supplying aid to the governments and how these aid spikes were directly correlated with the imposition of OFAC sanctions. The findings demonstrate that China’s developmental aid has a significant negative impact on the effectiveness of OFAC sanctions and challenges the notion that China adheres to the principles of non-conditionality and non-interference in its foreign policy. The research also provides policy recommendations to address the issues posed by sanctions busting. The research contributes to the ongoing debate about sanctions efficacy and the role of China in the international system. It highlights the relevance of obtaining a more nuanced understanding of China’s foreign policy and its impact on sanctions effectiveness.