How china is reshaping the glob rhys jenkins

How China is Reshaping the Global Economy How China is Reshaping the Global Economy Development Impacts in Africa and Latin America Rhys Jenkins Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Rhys Jenkins 2022 The moral rights of the author have been asserted Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2021952590 ISBN 978–0–19–286635–6 DOI: 10.1093/oso/9780192866356.001.0001 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work To my grandchildren, Tom, Mat, Kit, and Leo who will experience the consequences of China’s re-emergence as a global economic power Preface and Acknowledgements I first became interested in the impact of China’s economic growth on the Global South in 2004, when I was commissioned by the UK Department for International Development (DFID) to prepare a paper for a conference in Beijing at the launch of the Inter-American Development Bank’s study of the opportunities and challenges that the emergence of China presented for Latin America and the Caribbean (Devlin et al., 2006) This was the first time that I had visited China, and it began a period when my research was mainly focussed on questions posed by the rise of China Much of my previous work had been about the impact of globalization, starting with studies of transnational corporations and trade liberalization in Latin America and then extending to work on the environmental and socioeconomic implications of globalization in Latin America, South Africa, Vietnam, and Malaysia By the mid-2000s, it was already becoming clear that the dramatic growth of China and its re-incorporation into the global economy was a key feature of globalization in the twenty-first century The accession of China to the World Trade Organization in 2001 sparked a number of studies looking at the likely impacts that this would have in both the North and the South My own interest developed through further studies for DFID on the impacts of China on Asia, Africa, and Latin America, carried out with my colleague Chris Edwards I was also involved in a network of scholars who studied the impacts of the Asian Drivers (China and India) on the Global South and published special issues of the IDS Bulletin and World Development on this theme (Kaplinsky, ed., 2006: Kaplinsky and Messner, eds., 2008) Some of my subsequent research on the impact of China on Latin America, on Brazil, and on South Africa was funded by the UK Economic and Social Research Council (ESRC),1 and this allowed me to go into greater depth on the impacts of China on specific countries I worked with a number of colleagues on these projects and I am particularly grateful for their contributions They include Jonathan Barton, Enrique Dussel Peters, Andrés Lopez, Alexandre ESRC grant numbers RES-165-25-005; RES-238-25-0006; and ES/1035125/1 Preface and Acknowledgements de Freitas Barbosa, and Lawrence Edwards I was also fortunate to receive a Leverhulme Research Fellowship that enabled me to start work on this book As I delved deeper into the impacts of China on Latin America and the Caribbean (LAC) and Sub-Saharan Africa (SSA), I became aware that I needed to obtain a better understanding of the drivers of Chinese growth and global projection Thus, although the book was originally planned as a study of the impacts of China on the two regions, I realized that it needed to begin with developments in China Although I not claim to be an expert on Chinese economic development, I hope that Part I of the book will provide the reader with sufficient background to make sense of the impacts on LAC and SSA I am very conscious that one limitation I faced in writing the book is that I not read Chinese This may have led to the underrepresentation of some points of view I have tried wherever possible to refer to official Chinese documents that are available in English and to the work of Chinese academics that has been translated into or published in English However, this probably does not full justice to the range of Chinese views on LAC and SSA, and it may mean that Chinese perspectives that are more critical are not fully represented On the other hand, I have drawn on a range of sources from both LAC and SSA to ensure coverage of views from within both regions I would like to thank colleagues who have read and commented on parts of this book for their invaluable feedback They include Enrique Dussel Peters, Chris Edwards, Raphie Kaplinsky, Bereket Kebede, Diego Sánchez-Ancochea, and John Thoburn Michael Abou-Sleiman provided research assistance in putting together the database and carrying out the econometric analysis that is reported in the book Finally, Sally Sutton’s editing work on the manuscript helped put it into a coherent and presentable form I acknowledge all their contributions, while accepting ultimate responsibility for the contents and any errors that remain vii Contents List of Figures List of Tables List of Boxes List of Acronyms Introduction: China’s Re-emergence as a Global Economic Power Part I xi xii xiii xiv China and the Global Economy The Transformation of the Chinese Economy 13 The Workshop of the World 34 A Voracious Dragon? China and Global Commodity Markets 54 Going Global: Chinese Firms Abroad 74 The World’s Wallet? China’s Role in Global Finance 95 Part II China and Sub-Saharan Africa China’s Economic Expansion in Sub-Saharan Africa 117 China’s Economic Impacts on Sub-Saharan Africa 155 Social, Political, and Environmental Impacts in Sub-Saharan Africa 191 Part III China and Latin America and the Caribbean China’s Economic Expansion in Latin America and the Caribbean 235 10 China’s Economic Impacts on Latin America 271 11 Social, Political, and Environmental Impacts in Latin America 304 References Zhang, Q., 2016 Complex Asymmetry: A Comparative perspective on China’s relations with Africa and Latin America Revista Tempo Mundo, (2), 95–116 Zhang, Y., 2017 Review of the Sino-Latin American economic and trade cooperation since the Beginning of the 21st century In Z Su, ed., 2017 China and Latin America: Economic and trade cooperation in the next ten years Singapore: World Scientific Publishing Company, 503–46 Zhang, Y., Gu, J., and Chen, Y., 2015 China’s engagement in international development cooperation: The State of the Debate (IDS Evidence Report; No 116) IDS Zhang, Y., and Roelfsema, H., 2014 Unravelling the complex motivations behind China’s outward FDI Journal of the Asia Pacific Economy, 19 (1), 89–100 Zhang Yu, 2014 ‘Hebei looks to relocate its largest and most polluting industries abroad.’ Global Times, 22/12/14 Zheng, B., Sun, H., and Yue, Y., 2012 The present situation and prospects of ChinaLatin American relations: A review of the history since 1949 In S He, ed., China Latin America relations: Review and analysis Milton Keynes: Paths International, 1–21 Zheng, S., and M Kahn, 2013 Understanding China’s urban pollution dynamics Journal of Economic Literature, 51 (3), 731–72 Zhou, Z., 2012 Analysis on Brazil and China’s rapid development and mutual policy In S He, ed., China-Latin America relations: Review and analysis, Volume Milton Keynes: Paths International, 130–41 434 Index Tables, figures and boxes are indicated by italics ADM 56, 68, 224, 289, 335 African Growth Opportunities Act (AGOA) (2000) 88, 169–70 agency in relations with China of Latin America and the Caribbean 360 of Sub-Saharan African 144, 147, 190 Agricultural Bank of China 21, 101 agricultural commodities China’s demand for 55, 57–8, 60–3 and strategy for resource security 68–9 supply conditions 55 Agricultural Development Bank 21 agriculture, initial reforms in 14 aid architecture of Chinese 105–6 China as a donor of 101–6 China as recipient of 101–2 Chinese projects linked to 79–81 as driver of overseas investment 110–12 to Latin America 248, 269 scale of Chinese 103–4 to Sub-Saharan Africa 125–9, 134–5, 147 AidData 126–8, 152, 182 AIIB see Asian Infrastructure Investment Bank (AIIB) aluminium products, and industrialization strategies 70 American Enterprise Institute/Heritage Foundation 122–4 Angola Angolan Model 66, 129 economic impacts on 175–9 economic relations with 144–6, 154 exports to China 157 infrastructure investment in 176–7 and ‘loans-for-oil deals’ 66 loans to 127–9, 177–9 oil exports 175–6 and oil supply 138–40 Apple iPhone 43 Argentina 67–8, 257, 332, 333–4, 338 Asia as destination of Chinese overseas projects 80 ‘flying geese’ pattern of relocation 2, 49, 172–3 integration into production network 50 Asian Financial Crisis (1997) 22, 37 Asian Infrastructure Investment Bank (AIIB) 95, 102–3 asymmetry, economic 375 Australia 49, 67 authoritarian regimes 205–7 banking reform 21 Bank of China 21, 100–1 beef, China’s demand for 58 Beijing, air pollution 29 Beijing Consensus 111, 135, 214 Belt and Road Initiative (BRI) 10, 16, 20, 83, 166, 246, 277, 370, 373–4 bilateral investment treaties 20 Bolivia 66, 244, 252, 273, 315, 331–3, 335, 358 Brazil and Dutch disease 274 economic impacts on 288–93 as iron ore exporter 67 and political impacts of China’s economic activities 320–3 as soybean exporter 68 British Virgin Islands 77, 240, 242 Bunge 56, 68, 224, 251, 257, 289, 335 Burkina Faso 136, 158, 348, 353 business, three tiers of 25 CADFund see China-Africa Development Fund (CADFund) Cameroon 158, 167, 222–3, 225 capital flows see also aid; loans; portfolio investment maintenance of controls on 22 relaxation of controls on 23, 95–6 capitalist accumulation 1–2 carbon emissions 1, 30, 217, 329, 377 Cargill 56, 68, 224, 248, 251, 257, 289, 335 Index CARI see China Africa Research Initiative (CARI) cassava value chain 70 Catalogue Guiding Foreign Investment in Industry, The 18–19 Cayman Islands 77, 240, 242 CCPIT see China Council for the Promotion of International Trade (CCPIT) CDB see China Development Bank (CDB) central planning system 14–15, 27, 30–1 Chavez, Hugo 262, 269, 324–7 child labour, in Sub-Saharan Africa 197 Chile CODELCO 67 and commodities exports boom 274 economic impacts on 287–8, 298–301 FTA with China 280–1 China-Africa Development Fund (CADFund) 97, 134, 140–1 China Africa Research Initiative (CARI) 126–9, 152 China Bank Regulatory Commission 22 China-CELAC (Community of Latin American and Caribbean States) Forum 246, 277, 285–6, 374 China Communications Construction Group 80, 163, 181, 250–1 China Construction Bank 21, 101, 133, 175 China Council for International Cooperation on Environment and Development (CCICED) 220–1 China Council for the Promotion of International Trade (CCPIT) 87–91 China Development Bank (CDB) and Belt and Road Initiative 20–1 in Sub-Saharan Africa 97, 127, 133, 153, 162–3, 220 support for expansion abroad 20–1, 99–100, 108 China Export and Credit Insurance Corporation (SINOSURE) 20 China Fishery Group 68 China Global Investment Tracker 87, 122–6, 241–5, 350 China International Trust and Investment Corporation 82, 326 China Investment Corporation (CIC) 22–3, 96, 98, 104, 107–8 Chinalco 67, 312, 315, 330 China National Cereals, Oils and Foodstuffs Corporation (COFCO) 68, 335 China National Machinery Industrial Corporation 81 China National Offshore Oil Corporation (CNOOC) 65, 76–8, 85, 132, 249 436 China National Petroleum Company (CNPC) 65, 76–8, 85, 93, 132, 142, 218–19, 249, 314, 324 China Non-Ferrous Metals Mining Group (CNMC) 142, 156–7, 187, 198–9, 219 China Ocean Shipping Company 76 China Petrochemical Corporation (Sinopec) see Sinopec (China Petrochemical Corporation) China Power Investment 132 China Railway Construction 132, 163 China Railway Engineering Corporation (CREC) 130, 173–4, 259 China Railway Group 78, 181–2 China State Construction Engineering Corporation 81 Chinese Communist Party 14–16, 24, 26, 137, 258, 370 Chinese Yuan 103 CIC see China Investment Corporation (CIC) Cleaner Production Promotion Law (2002) 32 clothing and footwear and Chinese manufacturing 36, 44, 51–2 in Latin America 277, 279, 281–3, 290, 296, 305, 308 overseas markets 88 relocation to China 49, 51 in Sub-Saharan Africa 120–1, 158–9, 169, 181, 183–4, 186–7, 201–2, 358 CNOOC see China National Offshore Oil Corporation (CNOOC) CNPC see China National Petroleum Company (CNPC) coal China’s demand for 58 as energy 30–3 environmental impacts of 62–3 overseas projects 87 working conditions 195–6 Colombia 277–82, 305 colonialism comparisons with 3–4 and processing of products 71 commercial banks creation of 21 as drivers of overseas investment 109 and foreign lending 22–3, 99–101 greater independence of 21, 109, 113 joint-stock (JSCBs) 21 and One Belt and Road Initiative 21 in Sub-Saharan Africa 133–4 commercial objectives of Chinese firms 84–91 and Chinese interests in Latin America 257–61 and Chinese interests in Sub-Saharan Africa 135, 141–4 Index comparative perspective on China’s involvement 349–50 and Latin American interests 263 and Sub-Saharan African interests 146–7 commodities see also global commodity markets; natural resources characteristics of the Chinese market 71–2 China’s demand for 55, 60–63 exports from Brazil 288–90 exports from Latin America 272–5 exports from Sub-Saharan Africa 156–61 and ‘locking up’ of global supplies 68–72 and non-price impacts of China’s demand for 64–72 prices 58–63, 59 soft 70 strategies to secure supplies 64–6 supply of 55 commodity-backed loans 128–9, 139–40, 145–6, 261 commodity markets China’s significance in 56–8 organization of 55 Company Law (1993) 15 Company Law (1994) 24 competition comparative perspective on China’s involvement 358 in manufacturing in Latin America 278–85 and overcapacity 38 competitiveness, in manufacturing 39–42 conditionality, not imposed by China 4, 111, 136–7, 144, 327 conflict in Latin America 304, 312–15, 330, 332, 353, 360 in Sub-Saharan Africa 210–11, 360 with the United States 325–7, 366–7 Confucius Institutes 112 Congo, Republic of 221–4, 346 construction market seeking 88–9 in Sub-Saharan Africa 124 and Sub-Saharan African interests 143, 147 consumer demand 35–6, 55 consumer goods 35–6, 44 consumption 15–16 contracted projects see overseas projects contractors 80–1 copper from Chile 287, 298–300 China’s significance in 69 dependence on imports 56–7 imports from Latin America 237–9, 254, 272 imports from Sub-Saharan Africa 120, 139, 142, 156–7, 195–6, 218 mining 313–14 stockpiles 60, 64 and strategic economic objectives in SSA 139 strategy for resource security 66–7 wages 173, 193–4 working conditions 195–6, 198–9, 202 corporate social responsibility (CSR) 71–2 corruption, in Sub-Saharan Africa 207–10 Costa Rica 238, 252–3, 262–3, 279–80 cotton, China’s demand for 57–8, 62 COVID-19 10, 111, 132, 365, 367–8, 371–4 Cuba 235, 272, 346 currencies China as manipulator 40 current account 15, 22 debates about state-owned enterprises 26–7 around China’s relations with Latin American and the Caribbean 4–5 around China’s relations with Sub-Saharan Africa 3–5 “debt trap diplomacy” 204, 212–13, 370 deforestation in China 31 and illegal logging 217, 222–3 and soybean production 304–5, 323–4, 326–8 and timber 225 democracy, in Sub-Saharan Africa 205–7 Democratic Republic of Congo economic relations with 154 loans to 146 mineral exports to China 156 mining industry 142, 157, 193–4, 197 poor environmental record in 218–19 protests 215 resource-backed loans 67, 107 Sicomines agreement 130–1 Deng Xiaoping 2, 18, 136, 214, 252, 370 developed countries as destination for OFDI 77 and portfolio investment 98 preferential access to markets in 88 developing countries as destination for OFDI 77 and exports standards 71 loans to 95 and overseas projects 80 possible impacts of China on and processing of products 71 Development Assistance Committee (DAC) 103–4 diamonds, ‘loans-for-mineral’ deals 67 direct export subsidies 41–2 437 Index discontent, urban 14–15 diversification of energy supplies 65 of metal supplies 67 strategy for resource security 64 domestic financial market, and capital controls 22 domestic market comparative perspective on China’s involvement 358 and economies of scale and scope 40 expansion of 15–16 in manufacturing in Latin America 278–83 opened up to foreign investment 18–19 reduction in protection 18 Dominican Republic 253, 330, 348 Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) 240, 283, 352, 357 Dongguan (Guangdong) 40 DRC see Democratic Republic of Congo dual exchange rate 22 ‘dual-track system’ 14–15, 17–18 Dutch Disease 159–60, 178, 274 econometric model Caribbean 263–8, 340–1 China in Latin America and the China in Sub-Saharan Africa 148–53, 228–31 economic impacts, comparative perspective on China’s involvement 356–8 economic objectives see strategic economic objectives economic policy, major changes in 14 economic reform and the financial sector 21–2 and global economy 17–21 and growth 363–4 impact of and the labour market 27 and manufacturing 35–6 Economic Trade and Development Zones (ETDZs) 17–19 economic transformation 13–16, 33 financial sector 21–3 growing integration with global economy 17–21 inside out view 1–2 labour, wages and productivity 26–9 natural resources, energy and the environment 29–33 outside in view 1–2 SOEs and enterprise reform 23–6 Ecuador 66, 246–8, 251–2, 254, 259, 261–3, 269, 276, 312–13, 318–19, 330–1 438 Eight Principles for Economic Aid and Technical Assistance to Other Countries 102, 110–11 embassies, and aid programmes 105–6 employment see also labour market and casualization of workers 196–7 and child labour 198 of locals 172, 192–3, 359 numbers in Latin America 278, 295, 305–11 numbers in Sub-Saharan Africa 202–3 reduction in 187–8, 305–6 in Sub-Saharan Africa 192–3 and unemployment 188 as worst in Sub-Saharan Africa 198–202 energy commodities China’s demand for 55, 58, 60 and commodity markets 55 main recipient of lending 128 renewable see renewable energy and strategy for resource security 65–6 supply of 55 energy use, and economic transformation 30–2 enterprise reform, and state-owned enterprises 23–6 environmental activism 32 environmental impacts and Chinese firms 218–21 and commercial objectives in Sub-Saharan Africa 143–4 comparative perspective on China’s involvement 361 domestic concerns 70 of economic activities in Latin America 304–5, 328–38 of economic activities in Sub-Saharan Africa 216–28 of economic growth 15–16 and economic transformation 29–33 lack of concern 71–2 in Sub-Saharan Africa 216–28 and trade in Sub-Saharan Africa 217–18 environmental policies, and economic transformation 31–2 Environmental Protection Law (2015) 33 Environmental Protection Law of the People’s Republic of China (1979) 31 Eswatini see Swaziland Ethiopia development of manufacturing 182–3 economic impacts on 174, 183–4 economic relations with 154 infrastructure investment 181–2 loans to 181–2 trade relations with China 180–1 Eurozone crisis 95 exchange rates 22, 40–1 Index Exim Bank and aid programmes 105 and Angolan Model 129 and Belt and Road Initiative 20–1 and commercial objectives in Sub-Saharan Africa 141–2 concessional loans 102 creation of 21 as driver of overseas investment 108 and environmental standards 220, 332 and foreign lending 99–100 as key Chinese actor 347 and Latin American and the Caribbean 246–7, 297, 325 and loan to Angola 144–5 and strategic economic objectives in Sub-Saharan Africa 140–1 and Sub-Saharan Africa 130, 133, 141–2, 144–6, 153, 162–3, 171, 175–6, 347 support for expansion abroad 20 trade credit 104 export credits 99, 112–13 Export-Import Bank of China (Exim Bank) see Exim Bank exports boom in Chinese 15 China’s impact on 52 comparative perspective on China’s direct export subsidies 41–2 growth in 13, 19, 36–7 involvement 349, 357–8 from Latin America 272–5, 283–5 of manufactures 34, 34–8, 43–8 share of global 34–5, 37–8 sophistication of 44–7 from South Africa 185–6 standards 71 and strategic economic objectives 83 to Sub-Saharan Africa 120–1 from Sub-Saharan Africa 156–61 extractive industries employment in the 201 outward foreign direct investment (OFDI) 86 social, political and environmental impacts in Latin America 304–5, 311–13, 329, 338–9, 357, 359–61 and strategic economic objectives in Sub-Saharan Africa 138 target of FDI in Latin America 292 target of FDI in Sub-Saharan Africa 124 feedstuffs, China’s demand for 57–8, 61–2, 68 finance see global finance financial account 22 financial sector 15, 21–3, 124 fishmeal 57–8, 61–2, 68 Five Principles of Peaceful Coexistence 101 Five Year Plan (5th) (1976–80) 101 Five Year Plan (10th) (2001–5) 20, 66, 83–4 Five Year Plan (11th) (2006–10) 32 Five Year Plan (12th) (2011–15) 32, 38–9, 84 Five Year Plan (14th) (2021–25) 368 ‘flying dragon’ 172–3 ‘flying geese’ model 14, 49, 172–3 FOCAC see Forum on China-Africa Cooperation (FOCAC) food consumption 55, 61 footwear see clothing and footwear foreign assets 98 foreign banks in China 21–2 foreign direct investment (FDI) in the 1980s 18, 36 in the 1990s 18–19, 36–7 in agriculture 68 into China 18–20 and economic relations in Latin American and the Caribbean 240–3 and economic relations in Sub-Saharan Africa 121–4, 151 efficiency seeking 84–5, 89–90 liberalization of regulation 17–18 market seeking, as 84–5, 87–9 natural resource seeking 85–7 share of greenfield 75, 202–3, 310 source and destination strategic asset seeking 84–5, 90–1 technology targeted 38 foreign exchange reserves and creation of SWFs 107 growth in 20 massive 22, 95 regime unified 15 scarcity 83 foreign firms in China 25, 47 forestry 71, 221–5 Fortune, Global 500 list 25–6 Forum on China-Africa Cooperation (FOCAC) 3, 97, 118, 126–7, 131, 137, 180 Four Principles of Economic and Technological Cooperation 102, 111 Foxconn 47 Free Trade Agreements (FTAs) 255, 262–6, 285, 299–300 Fujian 18 future developments 364–74 Galanz 93 The Gambia 136, 154 garment industry see also clothing and footwear and competition from China 283–4 439 Index Galanz (Continued) costs of in Sub-Saharan Africa 173 exports from Latin America 34, 283–4 exports from Sub-Saharan Africa 169 and growth in Chinese manufacturing 52, 187 in Hong Kong 49 impact on prices 158–9 and technology 172 Geely 90 geography, and economic relations in Sub-Saharan Africa 152 geo-politics, differences in 353 Ghana 142, 147, 154 global commodity markets see also commodities China and 54–6, 72–3 China’s impact on prices 58–63 China’s significance in 56–8, 69 and ‘locking up’ of global supplies 68–72 non-price impacts of China’s demand 64–72 global economic power, China’s re-emergence as a 1–2 global economy China’s impact on 50–3 and economic transformation 17–21 insertion of Sub-Saharan Africa and Latin America into 351–3 global finance bank loans and trade credits 99–101 China as an aid donor 101–6 China’s role in 95–6, 112–14 development 113–14 drivers of Chinese financial flows 106–12 increase in importance in portfolio investment 96–8 global financial crisis (2008) 15, 25, 53, 90–1, 108 globalization 1–2, 365–6 GNPC 66 Go Global strategy adoption of 65 and Chinese firms abroad 15, 74 commercial objectives 84–91 and outward foreign direct investment (OFDI) 74–8 and overseas projects 78–80 start of 20 state driven or market driven 91–4 governance and China’s rise 37 of development finance 113–14 and policy of non-interference 111, 204, 206–7, 214 in Sub-Saharan Africa 228, 230–1, 316, 360 government repression, and Tiananmen Square 14–15 440 government subsidies, and competitiveness 41–2 grains, China’s demand for 58, 61 Grand Plan of Trade and Economic Cooperation (1994) 102 ‘grasping the large, letting go the small’ policy 24 Great Leap Forward (1958–60) 27 greenhouse gas (GHG) emissions 6, 30, 329 gross domestic product (GDP) 1, 13, 17, 37–9 gross national income per capita 13 Guangdong 18, 40 Guangzhou 131, 146 Haier Group 88, 93, 109, 256, 326 health and safety 198–9, 202 see also working conditions poor records of 359–60 poor standards in Sub-Saharan Africa 195–6, 200–2 heavy industries 25–6, 29–32, 35, 37, 54 Hebei Group 25 Hebei Province 71 hides and skins, China’s demand for 57–8, 62 High-Technology Development Zones 48 Hong Kong 18, 76–7, 81, 97–8 household registration system (hukou) 27 Huawei 25–6, 76–8, 133 Hu Jintao, President 97, 235–6, 255 human capital, and sophistication 47 human rights 71–3, 108, 111, 137, 194, 204 Human Rights Watch (HRW) 194, 198–9 hydropower 32–3, 126, 163, 181–2, 220, 226, 246, 276, 314, 332, 346 imports growth in 19, 70 from Latin America 238, 270 share of Chinese in selected countries 168 to South Africa 186–7 from Sub-Saharan Africa 119–21, 120, 168 incentive system, reform of 24 ‘Indigenous Innovation’ 37 Industrial and Commercial Bank of China (ICBC) 22, 101, 132, 134, 246, 250–1, 256, 266 industrial clusters 40 industrialization strategies 55, 69–71, 375–7 industrial output 25, 35, 38 industrial policy 37 industrial production 13, 35 inflation 36 infrastructure development/investment in Angola 177–8 in Brazil 282–3 Index in Chile 300–1 comparative perspective on China’s involvement 358 emphasis on 113 in Ethiopia 181–2 in Latin America 275–7 in Mexico 297 revival in 37 in Sub-Saharan Africa 161–7 and Sub-Saharan African interests 145 inside out view, of economic rise 1–2 institutional context, differences in 353–5 international expansion see Go Global strategy International Monetary Fund (IMF) 22, 102 interoceanic canal, environmental impacts in Latin America 331 investment 13, 37 see also foreign direct investment (FDI); outward foreign direct investment (OFDI) investment flows, share of global 74 iron ore 66–7, 69–70, 138, 289 ‘iron rice bowl’ 27 Japan 1–2 Jilin Petrochemical Corporation 30 Jinan (Shandong) 40 Jinchuan Group 67n8, 132 job losses, in state-owned enterprises 24, 27–8 joint-stock commercial banks (JSCBs) 21 Kazmunai Gas (KMG) 66 Kenya 133, 154, 166–71, 196–200, 204, 209, 213, 221, 226, 373 Keynesian policies, abandonment 1–2 Kingho Energy 132 Labour Law (1994) 27–8 labour market see also employment; working conditions casualization of workers 196–7 cheap labour not a factor 89 child labour 197 and China’s economic activities in Latin America 305–11, 316 and China’s economic activities in Sub-Saharan Africa 195–202 comparative perspective on China’s involvement 358–9 and economic transformation 27–9 low unit costs 39–40 and migrant workers 27–9 mobility 27–8, 33 productivity 36 labour militancy 29 Latin America and the Caribbean (LAC) 246, 250, 261, 268–9, 276, 292, 325, 332, 347 and China looking forward 364–74 Chinese interests in economic engagement in 250–61, 348–50 comparative perspective on China’s involvement 345–6, 361–2 comparisons with Sub-Saharan Africa 350–5 contracted projects 80, 243–6 debates around relations with 4–5 determinants of economic relations 263–8 economic expansion in 235–6, 268–9 economic growth 274–5 economic impacts on 271, 301–3, 356–8 economic relations by country 270 environmental impacts 328–38 exports to China 237–8, 272–5, 285 foreign direct investment (FDI) in 241 growth of economic relations 236–48, 346–7 infrastructure development 275–7 insertion into the Global Economy 350–3 interests in expanding economic relations 261–3 key actors in economic relations 248–50, 251, 347–8 loans to 247 manufacturing 277–87, 280, 281, 306 political impacts 316–27 problems in economic relations 375–7 significant increase in influence social impacts 305–15 social, political and environmental impacts 304–5 summary of China’s major impacts 356 technology transfer and local linkages 285–6 trade with China 237 trade with China and the USA 319 winners and losers 302–3 ‘leading dragon’ phenomenon 172–3 Lenovo 90, 249, 260–1, 287 Lesotho 154, 159, 169 linkages comparative perspective on China’s involvement 359 and Latin American manufacturing 285–7 and Sub-Saharan African manufacturing 170–3 loans to Angola 66, 127–8, 177–8 to Brazil 292 to Chile 302 and Chinese interests in Latin America 255–6 commodity-backed 128–9, 139–40, 145–6, 261 441 Index loans (Continued) to Democratic Republic of Congo 67, 108, 146 and determinants of economic relations with Sub-Saharan Africa 151–2 to developing countries 95 and economic relations in Latin American and the Caribbean 267–8 to Ethiopia 181–4 as global finance 99–101 and growth of Latin American relations 246–8 and growth of Sub-Saharan African relations 126–9 and key actors in Sub-Saharan Africa 133–4 to Latin America 268–9 and Latin American interests 263 and ‘loans-for-oil deals’ 66 to Mexico 297 resource-backed 66, 108–9, 254 and strategic economic objectives 84 to Sub-Saharan Africa 126–7, 128, 129 and Sub-Saharan African interests 163 to Zimbabwe 67–8, 79, 129 ‘loans-for-mineral’ deals 67, 78–9, 128–9 ‘loans-for-oil deals’ 66 local communities 311–15, 360 local firms 132 logging 225 see also timber demand for 225 illegal 217, 222–3 impact of extensive 31, 221 London Metal Exchange 55 long-term supply contracts, as strategy for resource security 64 Louis Dreyfus 56, 68, 257, 289, 335 Lou Jiwei 96, 107 Madagascar 158–9, 169–70, 215 ‘Made in China’ 38–9, 43 Malawi 136, 154 manufacturing and Chinese interests in Latin America 260 competition to Sub-Saharan African 167–70 competitiveness 39–42 development of 35–9 development of Ethiopian 182–3 effect on labour market in Latin America 305–8, 306 exports from Latin America 285 global impacts of growth of 50–3 growth of 34–5 impact on Brazilian 290–3 impact on Latin American 277–87 impact on Sub-Saharan African 167–74 442 integration into global production networks 48–50 investment in Sub-Saharan Africa 124 key features of exports 43–7 and local linkages in Latin America 285–7 and local linkages in Sub-Saharan Africa 170–2 output 1, 52 productivity in 28 share of global 34, 34, 46, 51 in Sub-Saharan Africa 160–6 technology transfer in Latin America 285–7 technology transfer in Sub-Saharan Africa 170–2 Maoist period 17 Mao Zedong 14, 78, 117 market driven international expansion 91–4 market economy move to 2, 14–15 socialist 2, 14–15, 24–5 Mauritania 157 Mauritius 141, 158–9, 173 mergers and acquisitions 75, 260 Mexico 283, 287, 293–8 Middle East 80 Midea Group 78 migrant workers 27–9 minerals and metals China’s demand for 55–7, 60–1 commodity markets 55 and industrialization strategies 70 and strategic economic objectives in as strategy for resource security 66–7 Sub-Saharan Africa 138–40 supply of 55 mining and Chinese interests in Latin America 254–5, 259–60 and commercial objectives in Sub-Saharan Africa 142 exports to China 156–7 and investment in Sub-Saharan Africa 124 overseas expansion 67 and strategic economic objectives in Sub-Saharan Africa 138 Ministry of Agriculture 105, 134 Ministry of Commerce (MOFCOM) 20, 75, 86, 105–6, 122–4, 131–2, 135, 137–8, 219, 240–1, 347 Ministry of Education 105, 134 Ministry of Environmental Protection 29, 32, 219 Ministry of Finance (MOF) 20, 96, 105–6 Ministry of Foreign Affairs (MOFA) 65, 105–6, 130–1, 135, 137–8, 248–9, 347 Ministry of Foreign Commerce (MOFCOM) see Ministry of Commerce (MOFCOM) Index Ministry of Foreign Economic Liaison 83 Ministry of Foreign Trade 17 Ministry of Health 105, 134 Minmetals 67, 73, 157, 186, 259, 301, 314 monobank see People’s Bank of China Mozambique 165, 196, 220, 225 multilateral institutions, role in 102–3 ‘mutual benefit,’ in Chinese discourse on aid 110 Nanjing Automotive 90 national champions 15, 25 National Development and Reform Commission (NDRC) 67, 89–90 National Social Security Fund (NSSF) 96–7, 107 Natural Forest Protection Program 31 natural resources see also commodities and drivers of investment in 108 and economic transformation 30–1 and strategic economic objectives 83–4 neo-liberalism, adoption of 1–2 New Development Bank (NDB) 95, 103 newly industrializing countries 51 ‘New Normal’ phase 16, 33, 38–9, 62–3, 367–9 Nicaragua 243, 253, 283, 331 Nigeria 138, 147, 154 Non-Ferrous Company Africa (NFCA) 157 non-interference comparative perspective on China’s involvement 348–50 in Latin America and the Caribbean 252, 318 policy of 101, 111, 346–7 in Sub-Saharan Africa 144, 192, 204–7, 214–15 North American Free Trade Agreement (NAFTA) 288–9, 294, 297, 352 North Korea 98 North Vietnam 101 NSSF see National Social Security Fund (NSSF) oil China’s demand for 58 China’s significance in 69 and Chinese interests in Latin America 253–4, 259 exports from Angola 176–7 prices 63 and resource seeking 85–6 and strategic economic objectives in SSA 138–40 as strategy for resource security 65–6 ‘One Belt, One Road’ initiative See Belt and Road Initiative One China Policy 111, 136 Open Port Cities 17 ‘ordinary trade’ 18 Organization for Economic Co-operation and Development (OECD) 43–4, 77, 103–4, 113 projects in Sub-Saharan Africa 163–4, 170, 208 outside in view 1–2 outward capital flows 95–6 outward foreign direct investment (OFDI) annual flows of 76 to Brazil 292 to Chile 200–1 and Chinese interests in Latin America 259–61 and economic relations in Latin America and the Caribbean 266 in extractive industries 86 growth in 20=1, 74–7 impact on labour markets in Latin America 309–10 in Latin America 241 Latin American interests in expanding economic relations with China 263 liberalization of 22–3 to Mexico 297 problems in measuring 74–5 and strategic economic objectives 82–4 in Sub-Saharan Africa 122 overseas projects annual flows of 76 by Chinese companies 78–80 geographical distribution of 79 in Latin America 247, 310–11 in Latin America and the Caribbean 243–6, 267 in Sub-Saharan Africa 124–5, 125–6, 132, 151 Panama 253, 277, 353 People’s Bank of China 21–2 Peru 68, 259–60, 272, 277–82, 310, 313–15, 330–2 FTA with China 339 Petrobras 66, 250, 261, 292 PetroEcuador 66 ‘pillar industries’ 25–6 plywood 70 policy banks and Chinese interests in Latin America 261 creation of 22–3 drivers of overseas investment 108–9 and environmental impacts of China’s economic activities 332 and foreign lending 99 443 Index policy banks (Continued) key Chinese actors 347 lending abroad 22–3 and ‘loans-for-oil deals’ 66 policy space 213–14, 262, 360–1 political context, differences between Sub-Saharan Africa and Latin America 360–5 political impacts comparative perspective on China’s involvement 360–1, 356 determinants of economic relations in Sub-Saharan Africa 228–30 of economic activities in Brazil 320–3 of economic activities in Latin America 304, 316–20 of economic activities in Sub-Saharan Africa 202–16, 229–31, 230 of economic activities in Venezuela 324–7 on governance 231 and instability in Sub-Saharan Africa 210–11 political objectives African interests in expanding economic relations with China 138 in going global 78–9 pollution air 29, 33 and conflicts in Latin America 313 domestic concerns 70 energy 30–2 water 30 portfolio investment, as global finance 96–8 poverty line 13 poverty reduction 13, 110 Power Construction Corporation of China 81 Prebisch-Singer thesis 273 private firms and commercial objectives in Sub-Saharan Africa 142–4 as key actors in Sub-Saharan Africa 131–2 private sector increase in significance in China 38 and OFDI 77 overseas projects 80 rapid growth in 25 and SOEs 23–4 privatization, increase in 15 processing trade 18, 46–7 production fragmentation of processes 48 global networks 48–50 moved off-shore to reduce costs 1–2 productivity and competitiveness 39–40 and economic transformation 26–9 growth in 13, 36 444 levels in Sub-Saharan Africa 173 protection, reduction in domestic market 18 provincial governments, and aid programmes 105 Qingjian Group Co Ltd 81 Rand Corporation 103–4 raw materials and Chinese interests in Latin America 251–5 strategic economic objectives 140, 349 real estate, urban 18–19 renewable energy 6, 32–3, 368, 376 in Latin America 285–6 in Sub-Saharan Africa 182, 192, 219, 225–7 Renminbi (RMB) 41, 256 research and development (R&D) 37, 84 resource-backed loans 67, 108–9, 254 resource curse 189, 205, 209, 275 see also Dutch Disease resource security 64, 139 resource seeking 85–7 resources for infrastructure 128–9 Rio Tinto 67, 69 Rosneft 66 round tripping 18–19, 75, 76–7 rural incomes 14 SAFE Investment Company 22–3 Sanusi, Lamido Sao Tome and Principe 136, 154, 348, 353 sawn wood see timber self-sufficiency 58 Senegal 154, 168–9, 336, 374 SEZs see Special Economic Zones (SEZs) Shangdong Iron and Steel 132 Shanghai Automotive Industry Corporation 25–6 Shanghai Baosteel 67, 69 Shanghai Construction 200 Shanghai Pengxin International Group 335 Shanghai stock exchange 15 Shantou (Guangdong) 17–18, 40 Shenzhen 17–18, 20 Shenzhen Energy 132 Shenzhen stock exchange 15 Shougang Group 86, 249, 251, 259, 310, 312–13, 330–1 SIC see State Administration of Foreign Exchange (SAFE) Investment Company (SIC) Sichuan Hongda 132 Sicomines agreement 67, 129–31, 157 Index Sinochem 75–7, 249 Sinohydro 130, 133, 163, 181, 276, 331 Sinomach 133, 163, 234, 234 Sinopec (China Petrochemical Corporation) and Angolan Model 129–30 investment in Brazil 241 investment overseas 65, 75–6, 85–6 in Latin America and the Caribbean 241, 249, 259, 261, 314 in Sub-Saharan Africa 129, 131–2, 176, 178–9, 218–21 Sinopec Sonangol International (SSI) 129–30 Sinosteel 86, 132, 186 social impacts and changes in awareness 376–7 comparative perspective on China’s involvement 356, 358–9 of economic activities in Latin America 305–15 of economic activities in Sub-Saharan Africa 192–203 socialist market economy 2, 14–15, 24–5 soft power 112, 137 solar power 225–7 Sonangol 129–30, 175–6 South Africa competition in third markets 188 economic impacts on 147, 184–8 economic relations with 154 exports to China 185–6 exports to third markets 188 imports from China 186–7 most important destination of FDI 124 overall economic impacts 188 South-South cooperation 18, 71, 72–3, 228, 303, 317, 321, 346–7, 350 sovereign wealth funds (SWF) 96–8, 107–8 soybeans China’s demand for 57–8, 61–2 and Chinese interests in Latin America 255 environmental impacts 333–4, 335–7 exports from Brazil 288–9 exports from Latin America 257, 272 and industrialization strategies 70 in Latin America 332–3, 337–8 and the Latin American soy value chain 334–5 and supply security 67–8 Special Economic Zones (SEZs) 14, 17–18, 43, 141 starch 70 state and China’s growing role in global finance 113 and OFDI 20 strategic objectives in going global 81–4 State Administration of Foreign Exchange (SAFE) 20 State Administration of Foreign Exchange (SAFE) Investment Company (SIC) 96–7, 107 State Capital Construction Commission, ‘Report on the Development of Overseas Construction Contracted Projects’ 83 State Council, investment of foreign exchange reserves 81–3, 96, 99–100, 105–6, 162 State Development Planning Commission 65 state driven, international expansion 5, 91–4 State Environmental Protection Administration (SEPA) 31–2 State-owned Asset Supervision and Administration Commission (SASAC) 25–6 state-owned enterprises (SOEs) changes in 15 and Chinese interests in Latin America 259 and commercial objectives in Sub-Saharan Africa 143–4 corporatization 24–6 debates 26 and ‘dual-track system’ 14 and economic transformation 23–6 and energy supply security 65 fall in numbers 24 and industrial production 35 key actors in Sub-Saharan Africa 131–2 and OFDI 77 oil companies 65 overseas projects 78–80 and the private sector 23–4 reform of 15 and the socialist market economy 24–5 and strategic economic objectives 83 subsidies 42 workers 14 State Planning Commission 17 steel and industrialization strategies 30–1, 34, 69–70, 86, 289 in Latin America 305 stockpiles 64, 66–7 Straits of Malacca 65–6 strategic asset acquisition, and Chinese interests in Latin America 261 strategic diplomatic objectives of China 81–2 and Chinese interests in Latin America 251–3 and Chinese interests in Sub-Saharan Africa 135–7, 149 comparative perspective on China’s involvement 348 445 Index strategic diplomatic objectives (Continued) Latin American interests in expanding economic relations with China 262 strategic economic objectives African interests in expanding economic relations with China 145–6, 153 of China 82–4 and Chinese interests in Latin America 250–1, 254–6 and Chinese interests in Sub-Saharan Africa 135, 137–41 comparative perspective on China’s involvement 349 as drivers of overseas investment 106–9 in going global 82–4 Latin American interests in expanding economic relations with China 261–3 Strategic Petroleum Reserve (SPR) 65–6 Sub-Saharan Africa (SSA) African interests in expanding economic relations with China 144–7 aid to 101 and China looking forward 371–4 and Chinese interests in economic engagement 134–44, 348–50 Chinese official outflows to 128 comparative perspective on China’s involvement 345–6, 350–4, 362 contracted projects 124–5, 125–6 debates around China’s relations with the region 3–5 determinants of economic relations with China 148–52, 149, 154 economic expansion in 117–18, 152–3 economic impacts on 155–6, 189–90 economic relations by country 154 economic relations with 154, 346–7 environmental impacts 216–28 exports to China 156–61, 168, 189 financial flows to 128 foreign direct investment (FDI) in 121–4, 122 growth of relations with China 118–31 impacts of China in 5–7, 356–61 imports from 120 infrastructure investment 161–7, 189 insertion in the Global Economy 350–3 interests in expanding relations with China 144–7 key actors in economic relations 131–4, 347–8 loans and aid 125–9 manufacturing 167–74, 168, 189–90 political impacts 203–16 problems in economic relations with China 375–7 significant increase in influence 446 social impacts 192–203 social, political and environmental impacts 191–2 summary of China’s major impacts 356 textiles 169–70 trade with China 119, 119–21 Sudan 78, 124, 127, 138, 139, 142, 154, 156–7, 160–1, 205, 211, 215, 219, 272 supply routes alternative 64 and oil supply security 66 Swaziland (now Eswatini) 136, 169, 348 economic relations with 154 Taiwan diplomatic relations with 81–2, 136 FDI into China 18 and Latin American and the Caribbean 235, 346 Latin American relations with 235, 240, 264–6, 318, 321, 341 less OFDI for countries recognizing 252–3, 268–9 One China Policy 136, 356 political objectives 81–2 relations with 348, 356 South African relations with 185 Sub-Saharan African relations with 149, 149–53, 169, 229–30 and UN Security Council seat 111 Tanzam Railway 78, 101, 117, 346 Tanzania 101, 133, 154, 164, 168–9, 173–4, 188, 197, 202–3 tariffs, reduction in 18–19 tax havens 77, 98 technological upgrading 37, 45–8, 46, 84, 369 technology transfer 170–2, 358 textiles in China 35 exports from Sub-Saharan Africa 169–70 in Latin America 277, 281, 281–2 in Sub-Saharan Africa 158–9, 169–70, 187 Tiananmen Square 14, 111, 117, 136 Tibet 136 timber China’s demand for 57–8 and environmental impacts 210–13 and environmental impacts in Sub-Saharan Africa 221–5 illegal 71 risk of illegality 223 township and village enterprises (TVEs) 14, 35 trade and Chinese interests in Latin America 258–9 Index costs of in Sub-Saharan Africa 173 and economic relations in Latin America and the Caribbean 265–6 and economic relations in Sub-Saharan Africa 150 and the environment in Latin America 329–30 and the environment in Sub-Saharan Africa 217–18 growth of Latin American relations 236–9 growth of Sub-Saharan African relations 119–21 key actors in Sub-Saharan Africa 131–2 with Latin America 237 liberalization of 16–18, 278–9 relations with Ethiopia 181 shares of Latin American with China and the USA 319 with Sub-Saharan Africa 119 trade credits, as global finance 99–101 trade surpluses 19–20, 44 trade unions, in Sub-Saharan Africa 197 transnational corporations (TNCs) 36, 38, 55, 75–6 Transneft 66 transport in Latin America 246, 334–6 main recipient of lending 126, 128 in Sub-Saharan Africa 126, 129–30, 163–5, 181–2 Treaty of Peace and Friendship 102 ‘trinity development cooperation’ 102 tropical products, China’s demand for 58, 61 Turkmengaz 66 unemployment, increase in 27–8, 188 ‘unfair’ practices, by government 40 United Nations 111, 117, 137, 340–1, 341 see also voting coincidence United Nations Conference on Trade and Development (UNCTAD) 87 United States and China Threat 316–20, 327–8 Chinese holdings of US securities 22 and Chinese interests in Latin America 251–2 destination of Chinese finance 98 and Latin American interests 262 as soybean exporter 67–8 “trade war” with China 53, 239, 256, 296, 334, 365–7, 371, 373 urban discontent 14–15 urbanization and commodities demand 55 and metals demand 56–7 and minerals demand 56–7 urban real estate, opened up to foreign investment 18–19 Uruguay 237, 240, 260, 270, 272–3, 279–80, 284, 332, 352 Vale 55–6, 67, 69, 248–9, 251, 289–90, 293 value added (in China), to exports 34, 43–4, 46–7 value added tax (VAT) 41–2 Venezuela 66, 242–5, 247–8, 252–4, 261–3, 276–7, 318–19, 324–7 voting coincidence between Latin America and China 265–6, 318, 321, 321, 340–1, 341 between Latin America and USA 321 between Sub-Saharan Africa and China 150, 150–2, 228–30 wages and competitiveness 39–40 and economic transformation 27–9 in Sub-Saharan Africa 173, 194–5 Washington Consensus 111, 156, 162, 207, 213, 262–3, 278, 352 Wenzhou (Zhejiang) 40 White Paper on foreign aid (2011) 103–4, 110, 213 wind power 217, 225–7, 361 wood see timber working conditions in coal 195–6 in copper mines 195–6, 198, 202 in Sub-Saharan Africa 195–202 ‘workshop of the world’ 34–5, 43, 54 World Bank 79, 102 World Trade Organization Agreement on Textiles and Clothing 291 China’s accession to 2, 14–15, 19, 21–2 Multi-fibre Arrangement 88 negotiation to join 15 preparation for membership 18 and processing trade 43–4 Trade Related Investment Measures Agreement 19 Wuhan Iron and Steel 67, 86 Xiamen 17–18 Xi Jinping, President 10, 16, 235, 365, 370, 374 Zambia child labour 197 copper mines 142, 156–7, 195–6, 198–9, 202 economic relations with China 154, 160 447 Index Zambia (Continued) employment 203 environmental impacts 219, 226–7 exports to China 150–1 foreign direct investment (FDI) in 119, 135 mining 156–7 policy space 213–15 TanZam railway 78, 101, 117, 346 wages 173, 193–4 448 working conditions 195–6, 198–9, 202 Zhao Ziyang, Premier 102 Zhou Enlai, Premier 101, 346 Zhubai 17–18 Zimbabwe economic relations with China 154 ‘loans-for-mineral’ deals 68, 129 ZTE 26, 133, 163, 182, 342, 347 ... reduce How China is Reshaping the Global Economy Second Edition Rhys Jenkins, Oxford University Press © Rhys Jenkins (2022) DOI: 10.1093/oso/9780192866356.003.0001 How China is Reshaping the Global... labour How China is Reshaping the Global Economy Second Edition Rhys Jenkins, Oxford University Press © Rhys Jenkins (2022) DOI: 10.1093/oso/9780192866356.003.0002 How China is Reshaping the Global... How then did China go from being a minor industrial power at the end of the 1970s to become the ‘workshop of the world’ in the early How China is Reshaping the Global Economy Second Edition Rhys