Transcript China & Development Alternatives

China & Development Alternatives
Patrick Marren
Kimmage Development Studies Centre,
Dublin,
Ireland
China & Development Alternatives
Outline
Images/Impressions of China
Historical China - Admiral Zheng He
Comparative Development – India and China
The Dragons Gift - China in Africa
China - Future?
China & Development Alternatives
What comes to mind when you think of China?
Do you see China as playing a positive or
negative role in world affairs?
Do you think China will become more like the
West as it gets richer?
China & Development Alternatives
C15th Chinese Explorer
Admiral Zheng He
Zheng He's Treasure Ships
Zheng He & Indian Ocean
Admiral Zheng
Series of Expeditions 1405 to 1433
4th Expedition – Malindi Kenya
28,000 men, 60 Treasure ships over 120m long
and 50m wide, and 190 support ships
Trading Gold Porcelain and Silks in exchange for
Herbs, Ivory, Myrrh and Giraffe
Past and Present
Zheng He's Expeditions – No bloodshed,
colonisation or plundering
Peace, Friendship and Openness – Themes
pushed by China today. China is not to be
feared
Chinas Success
Today China is

The most populous country

The biggest exporter

The second biggest economy

Has taken 300m out of poverty

“With great wealth, comes power”
Historical Progress – Comparison
with India

China
India

Indep. 1949
Indep 1947
Revolutionary
Socialist
Parliamentary
Democracy

Nehru 1954

“We differ in our political and economic
structures, yet the problems we face are the
same. The future will show which country and
which structure of government yields greater
results”
China and India

Broadly similar inheritance

Mass rural poverty with feudal structure

Acute embedded patriarchy – flagrant gender
violence – infanticide, foot binding, child
marriages

High Inequalities

Limited Industry, with low productivity
China and India

Differences

China – culturally homogenous 90% Han

One dominant language

2000 years old history
Acceptance and legitimacy of State
Commonality of socio-cultural orientation and
interests
China and India



Differences
India – Mosaic of Languages, cultures and
religions, further fractured by caste and class
Singh (2000) Survey
4,694 communities, 13 languages spoken by
10m+, another 29 by 1m+
China and India



Power
China – Based on peasants and workers –
CCP supporters
India – Middle and Upper classes- Congress
Party supporters
China and India

1950
GDP pc ($)

India
65
62
Labour (%)
Agric

China
Industry
77
72
16
17
Who won?
HDI
Life Exp
Schoolin
g
GNI pc
years
years
$ ppp (2008)
CHINA
89
73.5
7.5
7258
INDIA
119
64.4
4.4
3337
Who won?
Literacy
2nd Level
Enroll
3rd Level
% 15+
years
years
CHINA
93
74
22
18
INDIA
63
57
13
40
P/T ratio
Who won?
Agric Yields
Wheat
Kg/ha
CHINA
4155
INDIA
2688
Chinese Success

Saith (2008) Development and Change
Institutional Framework


India – Rigid and a constraint to development
China – A prime target variable – refashioned
to accelerate growth
Land reform


India – Never took place, minimal effort,
beneficiaries supporters of CP, killed off
further reform
China – Massive with terrible human cost
Great Leap 1958 – 62
1959 Collectivisation not working, replaced by
commune sys.
Land reform

1978 – Household Production System

3 types of reform tried

1980 – Bao Gan Dao Hu -favoured

1982 – 70% of HH practising
China Aid

China – major donor

Secretive & not DAC member

Concerns over impact – Human rights, Debt,
Governance
China Aid

Aid from China – Long History

To counter USSR & USA

Three phases

Large Scale Aid projects – Tan. Zam
Railways, Dams etc – Favoured by Mao

Very expensive – 5% of GDP by 72

Not successful
China Aid




2nd Phase
Rehabilitation of old projects and joint
management
3rd Phase
Privatisation of old projects, and joint
commercial ventures
Aid and Trade – China sees aid as benefiting
both its industries and host nations
China Aid
3rd Phase

Old Industries encouraged to move to EPZ

Textiles and Plastics – no tax rebates


Host state identified – Mauritius, Nigeria,
Tanzania etc
Provided employment, provides exports,
provides market opportunities
China Aid
Chinese Aid

Barter and Projects
Angola & Sudan – Major Chinese investment in
infrastructure in exchange for oil
Ghana – for cocoa
Saves foreign exchange, limits corruption
China Aid
Operating Principle

Non intervention in State Sovereign Issues
Human Rights and Governance concern
China as alternative – hinder change
China Aid
Policy Space – DAC alternative

1980's and 90's – 95% of Aid from DAC

DAC – focussed on Neoliberal agenda


Aid for Policy change – Structural Adjustment
Programmes & Governance
Little Aid for Industrialisation or Agriculture
China Aid
DAC – Aid Effectiveness

Paris and Accra Declarations

Ownership

Alignment

Harmonisation

Predictability
YET in reality, DAC DONORS DRIVE
AGENDAS
China Aid

2000's – Global Growth

Resource exports boom

BRIC's – New donors - “Poor but Powerful”

China – biggest and attractive
Forum of China and Africa Cooperation
China Aid


China – Africa a market not basket case
African perception of China as an equal, who
gives respect
China Aid

China

Aid still small, Export Credits bigger

China's own lesson
“To end poverty, build a road”

China's current aid practice based on own
experience of aid and development
China Aid

China

Aid still small, Export Credits bigger

China's own lesson
“To end poverty, build a road”


China's current aid practice based on own
experience of aid and development
Its consistent and conditionality free
China Aid

China

Chinese Imports are a threat, but

Chinese “Investment” aid has rehabilitated and
strengthened industries in host countries
“To end poverty, build a road”


China's current aid practice based on own
experience of aid and development
Its consistent and conditionality free
China Aid



China
Is a powerful force in Africa and there for the
long haul. It is strategic and planned
Ultimately, African Governments will the say
as to whether these interactions benefit their
citizens
China & G20

China & US relationship - main global play
US – Bad saver, big consumer
China – Big saver, bad consumer
2000's US trade deficits with China, funded by
China

China – Hold $2.5 tn in reserves

China – Seen as unfair player – exchange rate

Trade tensions in 2009
China & G20



China's focus on exports – weakness
Rising internal tensions – Inequality, Rural –
Urban divide, Corruption, Nepotism
Needs growth to placate population, address
inequality, etc
But cannot rely on exports

Must revalue currency, encourage domestic
demand – 35% of GDP currently
China & G20

G20
19 countries plus EU (also invites IFI's)



Replacement of G8
Represents 2/3rds of Global Pop, 80% of
Trade and 85% of GDP
Centre for Global Governance
China & G20
Pittsburgh Summit – G20 focus
Framework for Strong, Sustainable, and Balanced Growth
Strengthening the International Financial Regulatory System
Modernizing our Global Institutions to Reflect Today's Global Economy
Reforming the Mandate, Mission, and Governance of the IMF
Reforming the Mission, Mandate, and Governance of Our Development
Banks
Energy Security and Climate Change
Strengthening Support for the Most Vulnerable
Putting Quality Jobs at the Heart of the Recovery
An Open Global Economy
China & G20
For China
G20 – a recognition of its global power status –
cloaked in appearance of a broader
rebalancing of Old and New powers
G20 – takes spot light away from China, slowly
growing into its role, but still uncomfortable with
this new power
China & G20
Q: Will G20 sit above BWI’s? As steering and
reforming institution
Possibly – it’s globally representative, more
authoritative and legitimate than previous G
groups
Includes Old and New, comprises most of
established and emerging powers, producing
most of the worlds output, but small enough to
reach agreement.
China & G20
USA - Worried about “Multipolarity without
multilateralism” Old Global institutions
ineffective, not representative, in capable to
dealing with new millennium challanges.
G20 with a nested G2 offers a way of meeting
those challenges
Sino-US relations – remain most important in
terms of global impact, but focussed on
economic interests rather than geostrategic
rivalry
China & G20

China – Views

Will collapse

Will become like US & Europe

Will survive as China
CCP – Lesson from Tiananmen



Refuse equal dialogue with society
Fear for breakup of CCP unity – closed ranks,
debates now internal
But its shown to be receptive to change to maintain
survival