Comparing Environmental, Social and Governance Impacts of Chinese-led Infrastructure Projects in Africa and Southeast Asia

The report investigates the ESG performance of Chinese-led infrastructure projects across Africa and Southeast Asia, arguing that failures often stem from a combination of opaque procurement processes, weak host-country institutional capacity, and the agency of Chinese contractors. It highlights five critical areas of concern: tender and impact assessment processes, land acquisition and community displacement, debt transparency, inter-authority conflict, and long-term economic viability. Through case studies in countries such as Kenya, Cambodia, Indonesia, Zimbabwe, and Nigeria, the report demonstrates how the 'adaptive governance' of Chinese firms—adjusting standards to match weak local regulations—often leads to negative socio-environmental outcomes. It concludes that while China is developing domestic ESG frameworks, these are not consistently applied overseas, and recommends greater loan transparency and the establishment of independent ESG feasibility studies.

• Chinese state-owned enterprises (SOEs) typically adopt an 'adaptive governance' model, where they follow host-country regulations if they are strong but exploit weaknesses if they are not, rather than adhering to higher Chinese domestic standards.
• Sub-standard ESG practices are frequently linked to procurement processes that bypass open bidding and public tendering in favour of bilateral discussions between top leadership in China and the recipient country.
• Chinese contractors often exert more influence over project standards than Chinese policy banks, sometimes pushing for the funding of projects with weak commercial viability to increase their own revenue.
• Land acquisition for large-scale projects in rural areas often leads to the unfair eviction of vulnerable populations and indigenous peoples, particularly where local elites manipulate compensation processes.
• High levels of opacity in loan contracts and a lack of government capacity in recipient countries have contributed to debt distress and public mistrust, often fueling 'debt trap' narratives.
• There is often a significant disconnect between national-level project negotiations and the needs or concerns of local authorities and communities, leading to project delays and social unrest.
• The long-term economic viability of Chinese-funded projects is frequently undermined by a lack of regional coordination and a failure to ensure the infrastructure is actually utilized by local markets.
• China is increasingly integrating ESG into its domestic regulatory framework and the Global Development Initiative, but these standards are not yet consistently implemented in overseas investments.

APA

VAN STADEN, C., ALDEN, C., ALVES, A. C., YU, Z., LIM, G., MURG, B. J., OTELE, O. M., PELTOLA, M., & GONG, X. (2023). Comparing Environmental, Social and Governance Impacts of Chinese-led Infrastructure Projects in Africa and Southeast Asia. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2023/08/SAIIA_SR_AGDP_ComparingEnvironmentalSocial.pdf

Chicago

VAN STADEN, COBUS, CHRIS ALDEN, ANA CRISTINA ALVES, ZHENG YU, GUANIE LIM, BRADLEY J MURG, OSCAR M OTELE, MOTOLANI PELTOLA, and XUE GONG. Comparing Environmental, Social and Governance Impacts of Chinese-led Infrastructure Projects in Africa and Southeast Asia. South African Institute of International Affairs, 2023. https://saiia.org.za/wp-content/uploads/2023/08/SAIIA_SR_AGDP_ComparingEnvironmentalSocial.pdf.

Wikipedia

{{cite report |last1=VAN STADEN |first1=COBUS |last2=ALDEN |first2=CHRIS |last3=ALVES |first3=ANA CRISTINA |last4=YU |first4=ZHENG |last5=LIM |first5=GUANIE |last6=MURG |first6=BRADLEY J |last7=OTELE |first7=OSCAR M |last8=PELTOLA |first8=MOTOLANI |last9=GONG |first9=XUE |title=Comparing Environmental, Social and Governance Impacts of Chinese-led Infrastructure Projects in Africa and Southeast Asia |publisher=South African Institute of International Affairs |date=May 2023 |url=https://saiia.org.za/wp-content/uploads/2023/08/SAIIA_SR_AGDP_ComparingEnvironmentalSocial.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vanstaden2023comparing, author = {VAN STADEN, COBUS and ALDEN, CHRIS and ALVES, ANA CRISTINA and YU, ZHENG and LIM, GUANIE and MURG, BRADLEY J and OTELE, OSCAR M and PELTOLA, MOTOLANI and GONG, XUE}, title = {{Comparing Environmental, Social and Governance Impacts of Chinese-led Infrastructure Projects in Africa and Southeast Asia}}, institution = {South African Institute of International Affairs}, year = {2023}, month = may, url = {https://saiia.org.za/wp-content/uploads/2023/08/SAIIA_SR_AGDP_ComparingEnvironmentalSocial.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }