Abstract
Students of foreign aid routinely make the observation that aid giving correlates to the level of economic development of the donor country, its economic success at the time (usually measured in increases in the gross domestic product), its foreign exchange position, and several other economic variables. It is hence conventional wisdom that rich nations give foreign aid and the richer they are the more they give. The same applies to foreign investments. This doesn’t, however, quite fit China.
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Notes
Relating this to China’s view of itself and its role in the world, see Mark Mancall, China at the Center: 300 Years of Foreign Policy (New York: Free Press, 1984), pp. 8–9.
Chinese regard the nineteenth century as recent history. In 1820, China produced around a third of the world’s gross national product—more than the United States, Western Europe, and Eastern Europe combined. See Angus Maddison, The World Economy: A Millennial Perspective (Paris: OECD, 2006), pp. 261–63.
David Shambaugh, China Goes Global: The Partial Power (New York: Oxford University Press, 2013), p. 309.
For details on this period see Alexander Eckstein, China’s Economic Revolution (Cambridge: Cambridge University Press, 1977), chapter 1.
In 1952, China had 0.7 acres of cropped land per capita compared to 2.3 in the Soviet Union. See A. James Gregor, Marxism, China, & Development: Reflections on Theory and Reality (New Brunswick, NJ: Transaction Publishers, 1995), p. 81.
See Alexander Eckstein, China’s Economic Development: The Interplay of Scarcity and Ideology (Ann Arbor: University of Michigan Press, 1976), pp. 10–11. This was well below the United States, the United Kingdom, the Soviet Union, and even Japan, when those countries sought successfully to promote economic growth.
Yuan-li Wu, An Economic Survey of Communist China (New York: Bookman Associates, 1956), pp. 12–13.
See Yuan-li Wu, The Economy of Communist China: An Introduction (New York: Praeger, 1965), pp. 5–17 for details on Mao’s plans and how they differed from that of capitalist, pluralist nations.
John G. Gurley, China’sEconomy and Maoist Strategy (New York: Monthly Review Press, 1976), p. 5. Gurley notes that Mao believed that economic development could happen only within the context of the development of human beings, assumed egalitarianism, and rejected trickle-down economics.
See Audrey G. Donnithorne, China’s Cellular Economy: Some Economic Trends after the Cultural Revolution (London: Eastern Press, 1973).
See Nai-ruenn Chen and Walter Galenson, The Chinese Economy under Communism (Chicago: Aldine Publishing Co., 1969), chapter 8.
See John F. Copper, China’s Global Role: An Analysis of Peking’s National Power Capabilities in the Context of an Evolving International System (Stanford: Hoover Institution Press, 1980), p. 63 for a further discussion of this point.
See Jan S. Prybyla, The Chinese Economy (Columbia: University of South Carolina Press, 1978), chapter 2.
Maria Hsia Chang, The Labors of Sisyphus: The Economic Development of Communist China (New Brunswick, NJ: Transaction Publishes, 1998), pp. 51–55.
Chu-yuan Cheng, Communist China’s Economy, 1949–1962: Structural Changes and Crisis (South Orange, NJ: Seton Hall University Press 1963), pp. 157–58.
Chang, The Labors of Sisyphus, p. 54. According to another source, Mao was shown to have “feet of clay” and had to admit that he knew nothing about economics. See John King Fairbank and Merle Goldman, China: A New History (Cambridge: Harvard University Press, 1998), p. 373.
Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge: MIT Press, 2007), pp. 75–76.
See A. Doak Barnett, China’s Economy in Global Perspective (Washington, DC: Brookings Institution, 1981). According to the author, China’s GNP fell from US$145 billion in 1959 to US$112 billion in 1961. See P. 17.
See Maurice Meisner, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1975–1994 (New York: Hill and Wang, 1996), p. 188.
Ted Fishman, China Inc.: How the Rise of the Next Superpower Challenges America and the World. (New York: Scribner, 2005), p. 126.
Tianyong Zhou, The China Dream and the China Path (Singapore: World Scientific, 2013), p. 2.
Angus Maddison, The World Economy: A Millennial Perspective (Paris: Organization for Economic Cooperation and Development, 2001), p. 263.
William H. Overholt, The Rise of China: How Economic Reform is Creating a New Superpower (New York: W. W. Norton, 1993), p. 33.
Fred C. Bergsten Bates Gill, Nicholas R. Lardy, and Derek Mitchell. China: The Balance Sheet (New York: Public Affairs, 2006), p. 24. Many of the stateowned enterprises earned less than the cost of their capital not to mention that they produced goods that could not be sold outside of China due to their poor quality and they did considerable damage to the environment.
By 2007, the SOEs that remained were making profits to the tune of $200 billion per year or more than 6 percent of the GDP. See Edward Tse, The China Strategy: Harnessing the Power of the World’s Fastest Growing Economy (New York: Basic Books, 2010), p. 37.
Willem Van Kemenade, China, Hong Kong, Taiwan, Inc. (New York: Doubleday, 1997), p. 258.
Also see Prem Shankar Jha, Crouching Dragon, Hidden Tiger: Can China and India Dominate the West? (New York: Soft Skull Press, 2010). Jha believes that the decentralization of economic planning and a change in those responsible for investment facilitated China’s economic miracle.
Deng’s economic “genius” was, it is said, that he appropriately did not develop an overall economic plan, kept his hands off most of the time, and intervened only when necessary. He also sought good advice and listened. See Barry Naughton, “Deng Xiaoping: The Economist,” in David Shambaugh (ed.), Deng Xiaoping: Portrait of a Chinese Statesman (Oxford: Clarendon Press, 1995), p. 84.
After a decade or so after 1984, China’s People’s Liberation Army became the largest commercial entity in China setting up 20,000 companies with a profit of $5 billion. By one estimate half of China’s military personnel were engaged in commercial activities. See John Naisbitt, Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World (New York: Simon and Schuster, 1996), p. 27.
See Fei-ling Wang, “Beijing’s Incentive Structure: The Pursuit of Preservation, Prosperity and Power,” in Yong Deng and Fei-ling Wang (eds.), China Rise: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Rowman Littlefield, 2005), p. 32.
Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New World Order (New York: Penguin, 2012), p. 156.
Sterling Seagrave, Lord of the Rim: The Invisible Empire of the Overseas Chinese (New York: G. P. Putnam’s Sons, 1995), pp. 2–3. The author includes Taiwan in this figure. He compares the $2 trillion figure with Japan’s (with about twice as many people). $3 trillion.
Samuel S. Kim, “China’s Path to Great Power Status in the Globalization Era,” in Guoli Liu (ed.), Chinese Foreign Policy in Transition (New York: Aldine de Gruyter, 2004), p. 359. This chapter was originally published in Asian Perspective in 2003.
Sarah Y. Tong and John Wong, “China’s Economy,” in Robert E. Gamer (ed.), Understanding Contemporary China (third edition) (Boulder, CO: Lynne Rienner, 2008), p. 119.
See Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 2005), chapter 6.
A. Doak Barnett, “Political Overview,” in Shao-chuan Leng (ed.), Reform and Development in Deng’s China (Lanham, MD: University Press of America, 1994), pp. 5–6.
See Orville Schell, Mandate of Heaven: The Legacy of the Tiananmen Square and the Next Generation of China’s Leaders (New York: Touchstone Books, 1994), p. 404.
Brahma Chellaney, Asian Juggernaut: The Rise of China, Japan and India (New York: Harper Collins, 2010), p. 80.
Country Profile 2001: China (London: Economist Intelligence Unit, 2001), p. 15. This amounted to around 5 percent of China’s gross domestic product. About 9 percent of this investment came from the United States. Meanwhile, China’s total investment received by 2000 was US$348.3 billion. See Robert Andre LaFleur, China: A Global Studies Handbook (Santa Barbara, CA: ABC CLIO, 2003), p. 107.
Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower (New York: Henry Holt and Company, 2015), p. 168.
Ivan Tselichtchev, China versus the West: The Global Power Shift of the 21st Century (Singapore: John Wiley and Sons, 2012), p. 7.
Bill Emmott, Rivals: How the Power Struggle between China, India and Japan Will Shape Our Next Decade (Boston: Houghton Mifflin Harcourt, 2008), p. 56. The author states that China’s economy in 1978 was $228 billion in GDP; in 2007 it was $3.3 trillion. The GDP per capita increased tenfold during this period.
Will Hutton, The Writing on the Wall: Why We Must Embrace China as a Partner or Face It as an Enemy (New York: Free Press, 2006), p. 6.
Ezra F. Vogel, Deng Xiaoping and the Transformation of China (Cambridge, MA: Belknap Press, 2012), p. 693
C. Fred Bergsten, Charles Freeman, Nicolas R. Lardy and Derek J. Mitchell, China’s Rise: Challenges and Opportunities (Washington, DC: Peterson Institute, 2008), p. 3.
Oded Shlenkar, The Chinese Century: The Rising Chinese Economy and Its Impact on the Global Economy, the Balance of Power, and Your Job (Upper Saddle River, NJ: Wharton School Publishing, 2005), p. 11. Data are for 2004.
Eamonn Fingleton, In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony (New York: St. Marin’s Press, 2008), pp. 12–13.
Martin Wolf, Fixing Global Finance (Baltimore, MD: Johns Hopkins University Press, 2008), p. 165.
See Gordon G. Chang, The Coming Collapse of China (New York: Random House, 2001).
See Michael Pettis, The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy (Princeton, NJ: Princeton University Press, 2013).
Michael Pettis, Avoiding the Fall: China’s Economic Restructuring (Washington, DC: Carnegie Endowment for International Peace, 2013), p. 22.
See John Wong and Huang Yanjie, “China Coming to the End of Its High Growth,” in Gungwu Wang and Yongnian Zheng (eds.), China: Development and Governance (Singapore: World Scientific, 2012) pp.103–16.
Amy Chua, Worldon Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (New York: Random House, 2003). In recent years, China has been the largest and fastest growing location of entrepreneurial start-ups. See also Tse, The China Strategy, p. 16.
See Charles A. Kupchan, No One’s World: The West, The Rising Rest, and the Coming Global Turn (Oxford: Oxford University Press, 2012). Kupchan believes, for a variety of reasons, developing countries will continue to grow at a rate faster than the developed countries.
See James R. Gorrie, The China Crisis: How China’s Economic Collapse Will Lead to a Global Depression (Hoboken, NJ: John Wiley and Sons, 2013). The author argues that because of slow growth in the United States and Europe the world economy has become very dependent on China’s economic health and growth.
Nicholas R. Lardy, “China and the International Financial System,” in Elizabeth Economy and Michel Oksenberg (eds.), China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999), p. 209 and p. 211.
Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Lanham, MD: Rowman and Littlefield, 2010), p. 102.
Gary Clyde Hufbauer and Yee Wong, “China Bashing 2004,” International Economics Policy Briefs, (Washington, DC: Institute for International Economics, September 2004), p. 27.
Zachary Karabell, Superfusion: How China and America Became One Economy and Why the World’s Prosperity Depends on It (New York: Simon and Schuster, 2009), p. 109.
Ibid. See also John F. Copper, “China’s Military Assistance,” in John F. Copper and Daniel S. Papp (ed.), Communist Nations’ Military Assistance (Boulder, CO: Westview Press, 1983), pp. 98–108.
Alexander Eckstein, Communist China’s Economic Growth and Foreign Trade: Implications for U.S. Policy (New York: McGraw-Hill, 1966), p. 169 and Perkins, “The Economic Background and Implications for China,” p. 94.
Choh-ming Li, “Economic Development,” China Quarterly, January–March 1960, reprinted in Franz Schurmann and Orville Schell, Communist China (New York: Vintage Books, 1967), p. 199.
Henry Kissinger, On China (New York: Penguin, 2011), p. 117.
Donald S. Zagoria, The Sino-Soviet Conflict: 1956–61 (New York: Atheneum, 1964), p. 86. One explanation is that the Soviet Union was preoccupied with Eastern Europe at the time and extended large credits to several countries there. China, however, was angry over the fact that “rebellion yielded better reward than loyalty.” See Hudson et al., The Sino-Soviet Dispute, p. 37.
Sidney Klein, The Road Divides: Economic Aspects of the Sino-Soviet Dispute (Hong Kong: Green Pagoda Press, 1966), p. 66 and 68. This aid was also interpreted as “intended to encourage the Nehru government’s policies directed against communism, against the people and against socialist countries.” See Yahuda, China’s Role in World Affairs, p. 159.
Jung Chang and Jon Halliday, Mao: The Untold Story (New York: Knopf, 2005), pp. 381–85. The authors note also that Mao was determined to build China into a strong military power, including obtaining nuclear weapons and this motivated Mao to spend less on agriculture, resulting in food shortages. They note that 61 percent of the Chinese government’s budget went to military and arms-related industries. Just over 8 (8.2) percent was allocated to education and health care and that official government documents mention cutting consumption to satisfy the need for exports.
Jung Chang and Jon Halliday, Mao: The Untold Story (New York: Alfred Knopf, 2005), p. 383.
Frank Dikötter, Mao’s Great Famine: The History of China’s Most Devastating Catastrophe, 1958–1962 (New York: Walker Publishers, 2010).
See John W. Garver, Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ: Prentice Hall, 1993), p. 243 and 312.
See Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence,” in David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978–2000 (Stanford, CA: Stanford University Press, 2001), p. 226.
Elizabeth C. Economy and Michael Levi, By All Means Necessary: How China’s Resource Quest Is Changing the World (New York: Oxford University Press, 2014), pp. 47–49.
Samuel P. Huntington, The Clash of Civilizations and the Remaking of the World Order (New York: Simon and Schuster, 1996), p. 229.
Aaron L. Friedberg, A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia (New York: W. W. Norton, 2011), p. 157.
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Copper, J.F. (2016). China’s Economy and Its Foreign Aid and Investment Diplomacy. In: China’s Foreign Aid and Investment Diplomacy, Volume I. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137532732_3
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