China & Development Alternatives

1. Patrick Marren Kimmage Development Studies Centre, Dublin, Ireland China & Development Alternatives

2. 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?

3. 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?

4. China & Development Alternatives

5. C15th Chinese ExplorerAdmiral Zheng He

6. Zheng He's Treasure Ships

7. Zheng He & Indian Ocean

8. 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

9. 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

10. 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”

11. India Indep 1947 Parliamentary Democracy Historical Progress – Comparison with India • China • Indep. 1949 • Revolutionary Socialist

12. 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”

13. 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

14. 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

15. 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+

16. China and India • Power • China – Based on peasants and workers – CCP supporters • India – Middle and Upper classes- Congress Party supporters

17. China and India • 1950 China India GDP pc ($) 65 62 • Labour (%) Agric 77 72 • Industry 16 17

18. Who won?

19. Who won?

20. Who won?

21. 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

22. 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.

23. Land reform • 1978 – Household Production System • 3 types of reform tried • 1980 – Bao Gan Dao Hu -favoured • 1982 – 70% of HH practising

24. China Aid • China – major donor • Secretive & not DAC member • Concerns over impact – Human rights, Debt, Governance

25. 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

26. 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

27. 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

28. 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

29. China Aid Operating Principle • Non intervention in State Sovereign Issues Human Rights and Governance concern China as alternative – hinder change

30. 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

31. China Aid DAC – Aid Effectiveness • Paris and Accra Declarations • Ownership • Alignment • Harmonisation • Predictability YET in reality, DAC DONORS DRIVE AGENDAS

33. 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

34. China Aid • China – Africa a market not basket case • African perception of China as an equal, who gives respect

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

44. 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.

45. 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

46. 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