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   Parliamentary
    Socialist        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           China         India
GDP pc ($)         65            62
   Labour (%)
Agric                   77            72
   Industry            16            17
              Who won?

        HDI   Life Exp   Schoolin     GNI pc
                            g


               years      years     $ ppp (2008)



CHINA   89     73.5        7.5         7258



INDIA   119    64.4        4.4         3337
                   Who won?

        Literacy   2nd Level   3rd Level   P/T ratio
                    Enroll


         % 15+      years       years



CHINA     93          74          22          18



INDIA     63          57          13          40
                   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