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Abstract

As noted in Volume 1, Chapter 1, in the various studies published on China’s financial assistance to developing countries there were, and are, large discrepancies in the value of China’s help reported. There were also significant disagreements about where China’s foreign assistance went in terms of both countries and regions.

Keywords

Foreign Investment Foreign Policy Recipient Country Chinese Leader Foreign Assistance 
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Notes

  1. 1.
    David Shambaugh, China Goes Global: The Partial Power (New York: Oxford University Press, 2013), p. 61. The Foreign Ministry and some other ministries declassify materials after 30 years, but they are often not made available and many documents are not included in the declassification process.Google Scholar
  2. 2.
    See Charles Wolfe Jr., Xiao Wang, and Eric Warner, China’s Foreign Aid and Government-Sponsored Investment Activities: Scale, Content, Destinations and Implications (Santa Monica, CA: Rand Corporation, 2013), p. viii. In this study, in contrast to others, as indicated in its title, the term used is “foreign aid and government-sponsored investment activities.” This explains its larger numbers and why they are close to this author’s numbers.Google Scholar
  3. 9.
    In some cases the recipients have been paid less than the market value for their resources; in some other cases it has been the opposite. This issue has been mentioned several times in this book. The most notable case of China paying less for resources is its buying petroleum from Venezuela for as little as 6 dollars a barrel (when the world market price neared 100). Under Hugo Chavez, Venezuela, of course, gave “friendly prices” to many countries. Also China may be said to have used some of the money to build oil refineries in Cuba, a country Venezuela was also assisting. See Juan Pablo Cardenal and Heriberto Araujo, China’s Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing’s Image (New York: Crown, 2014), p. 134. One of the most obvious cases of China paying more than the market price was its purchase of a copper mine in Afghanistan. However, there are a number of other instances.Google Scholar
  4. 23.
    Inflation, as just mentioned, was a factor. China overvalued its currency for a variety of reasons. Early on China did not seek to export much, so this was not important. Later it did. China’s currency was devalued by a quite large amount in 1994. See Michael Pettis, Avoiding the Fall: China’s Economic Restructuring (Washington, DC: Carnegie Endowment, 2013), p. 34.Google Scholar
  5. 26.
    This the author has estimated, using a fairly strict definition of military aid and not considering the troops that China, provided to North Korea. See John F. Copper, China’s Foreign Aid: An Instrument of Peking’s Foreign Policy (Lexington, MA: D.C. Heath, 1976), p. 134.Google Scholar
  6. Also see John F. Copper, “China’s Military Assistance,” in John F. Copper and Daniel S. Papp (eds.), Communist Nations’ Military Assistance (Boulder, CO: Westview Press, 1983), p. 96. The author suggests a very large portion of China’s foreign aid was military aid. It needs to be pointed out that China’s arms aid was higher during the Korean War and during the early part of the Vietnam War and declined in the 1970s, especially in the latter part of that decade. It needs also be noted that Communist Bloc nations also gave a large portion of their aid in military assistance.Google Scholar
  7. See Daniel S. Papp, “Communist Military Assistance: An Overview,” in Copper and Papp (eds.), Communist Nations’ Military Assistance, pp. 1–3. See Volume 1, Chapter 1, for a definition of military aid. Much of the aid the United States gave was considered military aid because it went to the allies and was justified on security grounds when Congress approved it. China kept its aid to North Korea and Vietnam secret and when mentioned it did not generally refer to it as military aid but rather help to a “fraternal” Communist country. Assistance.Google Scholar
  8. Carol H. Fogarty, “China’s Economic Relations with the Third World,” China: A Reassessment of the Economy (U.S. Congress Joint Economic Committee) (Washington, DC: U.S. Government Printing Office, 1975), p. 735.Google Scholar
  9. 28.
    This can be gleaned from the context in which China gave military aid. Further, at the beginning of period two Chinese officials said that “friendship prices” had to be generally discontinued. At this time, China began to show its arms at exhibitions, at international arms trade fairs, and began to advertise its weapons. The Chinese official’s statement was in a newspaper article in the Wall Street Journal, cited in Anne Gilks and Gerald Segal, China and the Arms Trade (London: Croom Helm, 1985), p. 1.Google Scholar
  10. 29.
    Andrew J. Nathan and Andrew Scobell, China’s Search for Security (New York: Columbia University Press, 2013), pp. 182–83.Google Scholar
  11. 32.
    Daniel L. Byman and Roger Cliff, China’s Arms Sales: Motivations and Implications (Santa Monica, CA: Rank Corporation, 1999), p. 29.Google Scholar
  12. 45.
    Wolfgang Bartke, China’s Economic Aid (New York: Holmes and Meier, 1975), p. 204.Google Scholar
  13. 62.
    For details see Deborah Brautigam, The Dragon’s Gift: The Real Story of China in Africa (New York: Oxford University Press, 2009), chapters 9 and 10.Google Scholar
  14. 63.
    Elizabeth Economy and Michael Levi, By All Means Necessary: How China’s Resource Quest Is Changing the World (New York: Oxford University Press, 2014), p. 64.Google Scholar
  15. 65.
    David H. Shinn and Joshua Eisenman, China and Africa: A Century of Engagement (Philadelphia: University of Pennsylvania Press, 2012), p. 151.Google Scholar
  16. 68.
    China’s trade surplus in agricultural goods in 2001 of $4.2 billion by 2004 was a deficit of $4.64 billion. That year the China Agricultural University opened the China Food Security Research Centre. See David Lampton, The Three Faces of Chinese Power: Might, Money, and Minds (Berkeley: University of California Press, 2008), p. 243.Google Scholar
  17. 74.
    Kurt Muller, The Foreign Aid Programs of the Soviet Union and Communist China: An Analysis (New York: Walker and Company, 1964), p. 234.Google Scholar
  18. 76.
    Western aid in this realm has been harshly criticized for its lack of effectiveness. See William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin, 2006), pp. 3–5.Google Scholar
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    Shino Watanabe, “China’s Foreign Aid,” in Hyo-sook Kim and David M. Porter (eds.), Foreign Aid Competition in Northeast Asia (Sterling, VA: Kumarian Press, 2012), p. 60.Google Scholar
  20. 81.
    The Kremlin’s defeat in Afghanistan, of course, happened for a variety of reasons, China’s aid to the Afghan rebels being only one of them. Yet the defeat was in a number of ways similar to the US defeat in Vietnam. Certainly Moscow’s position on arms agreements, its fading image in the Communist world (as witnessed by it no longer claiming undisputed ideological leadership), and its negotiations to improve relations with China are very similar. See Sutter, Chinese Foreign Relations: Power and Policy Since the Cold War (third edition) (Lanham, MD: Rowman and Littlefield, 2010), pp. 271–72.Google Scholar
  21. 82.
    The anticipation of a multipolar world is the most common view. A bipolar view is expressed in the idea of Chinamerica and G-2 and the Beijing Consensus versus the Washington Consensus. The unipolar view is expressed in Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New Global Order (London: Allan Lane, 2012).Google Scholar
  22. 84.
    China has become admired and emulated in the Third World as a result of the growing “Beijing Consensus.” See Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century (New York: Basic Books, 2010), p. 232. The author notes China’s advances in soft power. In addition China has become a model for Third World countries that are disappointed with democracy and have abandoned it or are looking for another model.Google Scholar
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    Bruce A. Elleman and Clive Schofield, “Introduction,” in Bruce A. Elleman, Stephen Kotkin, and Clive Schofield (eds.), Beijing’s Power and China’s Borders: Twenty Neighbors in Asia (Armonk, NY: M. E. Sharpe, 2013), p. 3.Google Scholar
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    Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century (New York: Basic Books, 2012), p. 116.Google Scholar
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    Dibasa Moyo, Dead Aid: How Aid Is Not Working and How There Is a Better Way (New York: Farrar, Straus and Giroux, 2009), chapter 4 and pp. 103–6.Google Scholar
  27. 117.
    The reader is reminded that, as noted in Volume 1, Chapter 2, Mao’s ideology was revolutionary and reflected his intentions of creating a very new and different China. Reference was often made to “new China.” China’s official news agency was called the New China News Agency. For more details on this point, see Franz Schurmann and Orville Schell (eds.), Communist China: Revolutionary Reconstruction and International Confrontation 1949 to the Present (New York: Vintage Press, 1967), Part I.Google Scholar
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    Samuel B. Griffith, “The Military Potential of China,” in Alistair Buchan (ed.), China and the Peace of Asia (New York: Praeger, 1965), pp. 65–91.Google Scholar
  29. 122.
    This point was discussed in previous chapters. Also see Peter VanNess, Revolution and Chinese Foreign Policy: Peking’s Support for Wars of National Liberation (Berkeley: University of California Press, 1970), p. 169.Google Scholar
  30. 125.
    Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower (New York: Henry Holt, 2015), pp. 57–58.Google Scholar
  31. 127.
    Harold C. Hinton, Communist China in World Politics (Boston, MA: Houghton Mifflin, 1966), p. 45. The author notes that China had given up splitting the United States and the Soviet Union and had proclaimed itself a Third World country at this time. It should be noted that the $20 billion would be a much larger figure if converted to current dollars.Google Scholar
  32. 129.
    Gerald Segal, “Foreign Policy,” in David S. G. Goodman and Gerald Segal (eds.), China in the 1990s: Crisis Management and Beyond (Oxford: Clarendon Press, 1991), p. 180.Google Scholar
  33. 132.
    Michael B. Yahuda, China’s Role in World Affairs (Kent, UK: Croom Helm Ltd, 1979), p. 13.Google Scholar
  34. 134.
    David Arase, Japan’s Foreign Aid: Old Continuities and New Directions (London: Routledge, 2012), p. 1. In recent times as China’s economy has boomed and Japan’s has floundered Beijing’s foreign aid and foreign investments have far exceeded Tokyo’s. In Africa, for example, recently China’s aid has exceeded Japan’s by fivefold and its investments eightfold. “First China, Now Japan Moves to Woo African Nations at Economic Forum,” South China Morning Post, May 31, 2013 (online at scmp.com).Google Scholar
  35. 138.
    Geoff Dyer, The Contest of the Century: The New Era of Competition with China—and How America Can Win (New York: Knopf, 2014), pp. 88–98.Google Scholar
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    “U.S.-China Interactions in the Middle East, Africa, and Latin America,” in David Shambaugh (ed.), Tangled Titans: The United States and China (Lanham, MD: Rowman and Littlefield, 2013), p. 327.Google Scholar
  37. 154.
    Stephen Browne, Aid and Influence: Do Donors Help or Hinder? (New York: Taylor and Francis, 2006), p. 113. In 2004, 70 percent of US aid was tied to the purchase of American products. The percentage was even higher in the case of Japan.Google Scholar
  38. 159.
    See, Zhang Weiwei, The China Wave: Rise of a Civilizational State (Hackensack, NJ: World Century, 2012), chapter 3; Cardenal and Araujo, China’s Silent Army, epilogue; Jacques, When China Rules the World, chapters 7 and 12. Recently China has shown little willingness to cooperate with the Development Assistance Committee of OECD but has been eager to work with the development working group of the G-20. See Bonnie Glaser, “The Diplomatic Relationship: Substance and Process,” in Shambaugh (ed.), Tangled Titans, p. 166.Google Scholar
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    Paul Collier, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done about It (Oxford: Oxford University Press, 2007), p. 186.Google Scholar
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    Staffan I. Lindberg, “The Power of Elections in Africa Revisited,” in Staffan I. Lindberg (ed.), Democratization by Elections: A New Mode of Transition (Baltimore: Johns Hopkins University Press, 2009), p. 46.Google Scholar
  41. 178.
    Maria Hsia Chang, The Labors of Sisyphus: The Economic Development of Communist China (New Brunswick, NJ: transaction Publishers, 1998), pp. 119–20, and Jacques, When China Rules the World, p. 225.Google Scholar
  42. 181.
    See David Osterfeld, Prosperity versus Planning: How Government Stifles Economic Growth (New York: Oxford University Press, 1992), p. 209 and 204, and David Bayley, “The Effects of Corruption in a Developing Country,” Western Political Quarterly, December 1966, p. 727.Google Scholar
  43. 186.
    This was in 1992, at a meeting in Rio de Janeiro to develop a “Grand Bargain” to deal with global environmental degradation. Agenda 21 was the result, a 700-page plan for “sustainable development.” Very little happened beyond a lot of negotiations. Thirteen years later another attempt was made at a G-8 meeting in Scotland. The results were similar. See Robert L. Hicks, Bradley C. Parks, J. Timmons Roberts, and Michael J. Tierney, Greening Aid? Understanding the Environmental Impact of Development Assistance (London: Oxford University Press, 2008), pp. 1–3.CrossRefGoogle Scholar
  44. 187.
    See Ivan Tselichthev and Frank-Jurgen Richter, China versus the West: The Global Power Shift of the 21st Century (New York: John Wiley, 2012), pp. 63–66.CrossRefGoogle Scholar
  45. 221.
    Carol Lancaster, Foreign Aid: Diplomacy, Development and Domestic Politics (Chicago: University of Chicago Press, 2007), p. 2. The author cites a DAC report.Google Scholar
  46. 230.
    Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is Transforming the World (New Haven, CT: Yale University Press, 2007), p. 98. The Rand study cites China’s “aid” (defined to include foreign investments) was $189.3 billion in 2011 compared to the United States giving $8 billion (not including aid to Iraq and Afghanistan) and the US Export-Import Bank extending $6.3 billion in loans. See Wolfe et al., China’s Foreign Aid and Government-Sponsored Investment Activities, p. xiv.Google Scholar
  47. 231.
    Douglas E. Schoen and Melik Kaylan, The Russia-China Axis: The New Cold War and America’s Crisis of Leadership (New York: Encounter Books, 2014), p. 208.Google Scholar
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    See Anoralee Saxerian, The New Argonauts: Regional Advantages in the Global Economy (Cambridge: Harvard University Press, 2006).Google Scholar
  49. Also see Louise Fawcett and Andrew Harrel, Regionalism in World Politics (London: Oxford University Press, 2000).Google Scholar
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    Thomas Friedman and Michael Mandelbaum, That Used to Be Us (New York: Picador, 2012), pp. 196–97.Google Scholar
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    Joseph S. Jr. Nye, The Future of Power (New York: Public Affairs Press, 2011), p. 180.Google Scholar
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    Notwithstanding the many Western critics of China that see a gap between China’s economic development and its political modernization, some espouse quite a different view. One writer notes that the legitimacy of the Chinese state depends on its “millennial foundations” rather than an electoral mandate and that it is highly competent and probably superior to others. In fact, he states it may have a powerful influence on the rest of the world in the future. See Jacques, When China Rules the World, p. 425. The well-known US-based Chinese scholar Minxin Pei, who advocates democracy in China and is a critic of the Chinese political system, admits that the Chinese Communist Party has “consolidated” its rule and has forestalled pressure for greater freedoms. Minxin Pei, China’s Trapped Transition: The Limits of Developmental Autocracy (Oxford: Oxford University Press, 2010), p. 207.Google Scholar
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    As noted earlier this point is developed by Amy Chua in The World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (New York: Doubleday, 2003).Google Scholar
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    As mentioned in Chapter 3, John Naisbitt makes this point in his book Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World (New York: Simon and Schuster, 1996).Google Scholar
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    This is reflected in the term “tiger mother” to describe it. See Amy Chua, Battle Hymn of the Tiger Mother (New York: Penguin, 2011).Google Scholar
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    This has long been true. See Orville Schell and John Delury, Wealth and Power: China’s Long March to the Twenty-first Century (New York: Random House, 2013), pp. 47, 57, and 59. Various recent studies confirm this connection. See, for example, the research done by the Lumina Foundation (online at luminafoundation.org).Google Scholar
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    See Michael Pettis, The Great Rebalancing: Trade, Conflict, and the Perilous Road ahead for the World Economy (Princeton, NJ: Princeton University Press, 2013)Google Scholar
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