The World Bank and China: Future Prospects (original) (raw)
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China's Role in Global Development Finance: China Challenge or Business as Usual?
Global Policy, 2020
China's economic success has prompted both academic political economists and applied policy analysts to speculate about the implications of a new ‘China model’ of economic development and global economic governance. A particular issue is the degree to which the China model involves developing in opposition to or in cooperation with the pre‐existing norms of global economic governance. Recognizing the ambiguity of the China model, we consider two alternative interpretations of China's role in global economic governance: China Challenge (CC) and Business as Usual (BaU). We flesh out these contrasting interpretations using evidence from the lending behavior of four major development finance institutions in which China plays a leading or determinative role: the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB), the Silk Road Fund (SRF), and the China‐Africa Development Fund (CADF) of the China Development Bank. We find that (at least in the restricted d...
The Peoples Republic of China has experienced a remarkable period of economic high growth over the last decades. China’s gross national product has grown in eightfold over the last twenty years, making it the world’s second largest economy by nominal GDP. According to the IMF, China is the largest economy by purchasing power parity (IMF, 2014). China is the world’s fastest growing major economy with a growth rate of 10% over the last 20 years (Wang, 2007). Furthermore China is proliferating its activity n Africa on an exponential rate (Taylor, 2006). China is the world’s second largest trading partner of Africa (China–Africa Business Council, 2015). Furthermore China is handing out extensive loans and supplying in interest-free loans to sub-Saharan African countries (Bader, 2014; Taylor; 2006). This is quite remarkable, as China was still receiving excessive amounts in loans in the 1990’s. China went from an aid-recipient country, to an aid-supplying country in less than 15 years (World Bank, 1997). China has a clear foreign development policy and supplies its aid to developing countries with preconceived plans (Wang, 2007). The rapid economic growth and the shift to aid-supplying country make a relevant topic. The topic has gained a lot of attention recently in both world media and amongst academic scholars. These factors combined are what made me think of this puzzle and, together with my personal years of studying in China, make it an interesting subject to me. This paper is about the increased development aid and loans by China to sub-Saharan African developing countries. I will compare these loans with loans distributed by the World Bank. The variables that I will analyze are the effects of conditionality on the developing countries. Important to note here is that conditionality is often linked with structural adjustments. However these terms are not precisely the same, they are used interchangeable in this research paper. I will investigate whether Chinese loans are conditional and if so, what the conditions are. I will compare these with the conditions of the World Bank loans. Therefore my research question is: What are the effects of the conditionality of loans to developing, aid-recipient countries given by the World Bank versus loans given by China? In order to give this research question more focus the research is concentrated on the effects of conditions on regime type and the GDP of the aid-recipient countries. A distinction is made in measuring the regime type between a democracy and autocracy. The effect of conditionality on the GDP is measured by looking at UN-databases. A sub-question needs to be answered before I can focus on the main research question. This question is What are the conditions of Chinese and World Bank loans? I will focus my research on two particular case studies: Angola and south-Sudan. In order to answer my research question I have divided this article in distinct parts. In the first part I will provide a review of the literature. Three different authors and their takes on the topic are presented. Even though the perspectives are different, all authors agree on the fact that Chinese loans might have a more negative effect than the World Bank’s loans on the aid-recipient country in terms of democracy, human rights and governance. In the second part I will analyze the incentives of the World Bank and China to hand out loans. I will also examine the structural adjustment programs by the World Bank, as these are closely intertwined to their conditional loans. I will use the Washington and the Beijing consensus as grips in this analysis. In the third, methodological part I justify the choice for Angola and south-Sudan as case studies. In my analysis I will investigate the effect of conditional loans on the GDP and the type of regime by examining the GDP of Angola and south-Sudan. In the conclusion I will argue that the effects of the World Bank are indeed beneficial, and that the effects of Chinese loans are relatively obscure.
China challenges global governance? Chinese international development finance and the AIIB
International Affairs, 2018
Scholars and policy-makers have been increasingly debating the potential impact of rising powers on the architecture and outputs of global governance, with particular reference to China-the most important emerging power. 1 This discussion overlaps with a broader debate over whether China is a 'status quo' power that will maintain the post-Second World War 'international liberal order', or a 'revisionist' state seeking to overturn this order. 2 Much of this debate has focused on existing multilateral institutions, where 'gridlock' is frequently blamed on rising powers' obsession with state sovereignty and/or demands for greater status and respect for their interests and agendas. 3 Many perceive a growing challenge to US domination of these institutions, and a tendency to establish new ones that 'perform a similar function' but are more responsive to emerging powers' demands. 4 This is taken by some to denote a growing challenge to the international liberal order, particularly from China. 5
China in Africa: Competition for traditional development finance institutions
World Development, 2019
Official development finance from China has risen tremendously in the past two decades across the globe, including in the world's poorest continent Africa. How has this sudden increase in development resources affected the two major multilateral development banks (MDBs) in the region, the World Bank and the African Development Bank (AfDB)? One might expect that the MDBs would compete with China to maintain influence in Africa. This study uses statistical tests and interviews with government officials in three recipient countries to see if this is the case. The results indicate that total MDB finance by country change little over time in response to Chinese activity. The sectoral allocation of concessional lending to the poorer countries does not show any responsiveness either. In contrast, shifts in levels and sector allocation can be observed for non-concessional countries. Overall, the study suggests that while China's role in African development finance is indeed substantial and growing, it has not had the ''game changing" impact on traditional development finance as popular perception might lead one to believe. This may change, however, once more recipient countries develop economically and move to non-concessional lending.
2018
This book is a history of the partnership between the Asian Development Bank (ADB) and the People’s Republic of China (PRC) spanning three decades. Since joining ADB in 1986, the PRC has evolved from being a poor and predominantly agrarian economy to an upper-middle-income manufacturing and services powerhouse that has become a leading international source of financial, technical, and knowledge cooperation. This historically unprecedented transformation has shaped every aspect of the ADB–PRC relationship. The successful partnership owes much to the PRC’s unique approach to developing its economy, and oers valuable lessons for other countries and development partners.
China in the International Financial System: A Study of the NDB and the AIIB
2016
Iv • CENTRE FOR INTERNATIONAL GOvERNANCE INNOvATION ABOUT THE AUTHOR Xingqiang ("Alex") He is a CIGI research fellow. Prior to joining CIGI, Alex was a research fellow and associate professor at the Institute of American Studies at the Chinese Academy of Social Sciences (CASS). At CIGI, he is focusing on China and the Group of Twenty, China and global economic governance, and domestic politics in China and their impact on China's foreign economic policy making.
The World Bank in the Post-Structural Adjustment Era
Handbook of Global Economic Governance: Players, Power and Paradigms, 2014
Originally created as part of a global financial architecture aimed at reducing the likelihood of global economic crisis and now situated as the preeminent institution in the broad international development community, the World Bank has witnessed tremendous transformation of its mission, structure and operations over its 65-year existence. In this chapter, we focus on the World Bank as a lender of international development funds. We first briefly describe some of the major transformations that the Bank underwent through the mid-1990s in order to set up an extended discussion of the incorporation of the 'governance and anticorruption' (GAC) agenda into the World Bank's lending operations. We show how the GAC agenda emerged as the product of crises of legitimacy and effectiveness linked to the failures of structural adjustment lending during the 1980s and early 1990s. We argue that the GAC agenda remains ill defined almost 20 years after its emergence, for three fundamental reasons: (1) the challenges of creating better governing institutions in the developing world; (2) the disbursement culture that drives bureaucratic decisions within the Bank; and (3) the question of to which constituencies the Bank should be responsive.