Diversity of Political Relations：How Substantive vs. Structural Ties Shape China’s Overseas Contracted Projects and Direct Investment Locations

(1) Dependent Variables
OCP and ODI data are sourced from the Statistical Yearbook of China’s Foreign Trade & Economic Cooperation and the Statistical Bulletin of China’s ODI. For OCP, available metrics include completed turnover, newly signed contract value, number of contracts, and the number of expatriates. ODI data include both annual flow and stock statistics. All values for OCP and ODI, originally in current USD, are converted to constant 2005 USD and expressed in natural logarithmic.
(2) Independent Variables
we distinguish between two dimensions of bilateral political relations: “substantive relations” and “structural relations”, proxied by leader visits and UNGA voting alignment, respectively. Based on data from China and 168 host countries.
a. Leader Visits. These include both outbound and inbound visits of China’s and foreign top- and second-ranking leaders. All data on leader visits are sourced from China Diplomacy (World Knowledge Press), compiled by the Policy Research Department of the Chinese Ministry of Foreign Affairs, and manually sorted for consistency.
b. UNGA Voting Alignment. To measure structural political relations, this study employs voting data from the United Nations General Assembly (UNGA). The UNGA’s broad agenda and frequent voting sessions provide a suitable context for quantifying diplomatic alignment and the closeness of bilateral ties. Our baseline measure follows Bailey et al. (2017), which applies an Item Response Theory (IRT) model to estimate countries’ ideal point positions based on “yes”, “no”, and “abstain” votes. Bilateral alignment is measured as the absolute distance between two countries’ ideal points; smaller values indicate closer political orientations and greater alignment, reflecting more stable structural political relations. For robustness, we also adopt the approach of Signorino & Ritter (1999), which calculates the proportion of identical votes by two countries in a given year. A higher proportion indicates closer alignment of political stances.
(3) Control Variables
To control for other potential influences, we incorporate location-specific characteristics of the host country following the gravity model and prior studies. Specifically, we include: (1) GDP (log of constant 2005 US dollars, per $10,000); (2) GDP per capita (log of constant US dollars); (3) patent applications (per 10,000); (4) resource exports (share of fuels, ores, and metals in total exports) sourced from WDI; and (5) infrastructure, proxied by highway density (kilometers of highway per square kilometer), sourced from the CIA’s World Factbook. In addition, two dummy variables are included to capture whether a bilateral investment treaty (BIT) or a free trade agreement (FTA) exists between China and the host country. The data are from the official website of the Ministry of Commerce of China.