A burgeoning literature has examined the political and economic implications of Chinese aid in developing countries, given its structural differences from official development aid (ODA). Nevertheless, scant attention has been paid to the effects of China’s development finance on labor other than anecdotal evidence. This study seeks to fill this gap by identifying the mechanisms under which Chinese development finance affects labor rights in recipient countries. Chinese aid might increase levels of respect for labor rights if development projects focus on industrial sectors that promote public goods provision and developmental outcomes. In contrast, Chinese aid may adversely affect labor rights, serving as sources of additional tax revenues. Recipient governments are less likely to respond to the collective demands of labor, especially when the Chinese government seeks to curry favour with recipient governments for its strategic interests. The paper tests these hypotheses, using AidData