China’s Growing Economic and Political Power: Effects on the Global South
Alex E. Fernández Jilberto and Barbara Hogenboom
The impressive growth of the biggest developing country in the world is currently a key economic and political issue.
While the effects of
More importantly, with its industrialization and growth,
Several indicators for
SSA | LAC | US | ||
Population (millions) | 1,296 | 726 | 546 | 294 |
GDP/cap. ($) | 1,500 | 601 | 3,576 | 41,440 |
FDI ($ billions) | 62 | 20 | 69 | 121 |
Export ($ billions) | 593 | 232 | 276 | 819 |
Import ($ billions) | 561 | 212 | 237 | 1,526 |
Sources: CEPAL (2005), WTO (2005), and World Bank (2006)[1]
The expansion of
The rapid growth of
In international politics
This article starts with some facts and figures that illuminate what is meant by the global expansion of
Over the past few years, the world has become aware of the importance of
With its rapid economic growth and expanding export production,
The Chinese contribution to rising world demand and prices of oil and other hydrocarbons deserves special attention. Internationally, it is the second largest consumer of energy, only after the
Next to its imports of fuels, minerals, and metals,
Oil consumption by countries and regions, 2004
Source: World Bank (2005)
Transnational companies (TNCs) have played a key role in the expanding Chinese production for the world market, and even more so in the changing composition of Chinese exports. In the period from 1985 to 2000, the share of primary products and resource-based manufactures decreased from 49 to 12 percent, whereas the share of high technology products rose from 3 to 22 percent. The share of TNCs in Chinese exports rose from 9 to 50 percent between 1989 and 2001. Ninety percent of the exports of these companies are manufactured goods, such as machinery and equipment. There is also a large FDI component in technology intensive products: 91 percent in electronic circuits; 85 percent in automatic data-processing machines; and 96 percent in mobile phones (all in 2000). Apart from US and European companies, in China there are a large number of TNCs originating from Asia, mainly South Korea, Japan, Hong Kong, Taiwan, and Singapore (UNCTAD, 2002b: 161-6; 2005a: 2-3). To other developing countries
Regional distribution of net FDI inflows in
* annual averages
Source: CEPAL (2005)
While
Taken together, to developing countries,
The economic restructuring of China
What started as a gradual global move from socialist to capitalist economic measures in the late 1970s, turned into
The second phase of economic reforms that started in 1984 was the structural reaction to the inflation crisis, the economic chaos and the social instability that reigned in
The signing by
The general opening of
While entry into the WTO allows
Shares of developing countries’ manufactures, 1990s
Sources: ILO (2004), UNCTAD (2002a)
Rather than the conditionality of the IMF and the World Bank, it was changing internal views that gave way to
The implementation of neoliberal policies in
The deepened globalization of the Chinese economy is strengthening its specialization in the industrial sectors in which it possesses major competitiveness and comparative advantages. These sectors are intensive in the use of manual labour, and correspond to the pattern of international competitiveness of the majority of the
The role of China in Asia
In its strategy of finding economic associations,
In addition, China actively participates in the Asia-Pacific Economic Cooperation (APEC) that integrates 21 countries with 2.5 billion inhabitants along the Pacific.[3] The APEC members jointly represent almost 60 percent of the world’s GDP and 50 percent of international trade. In the first ten years of its existence it has even generated 70 percent of global economic growth. APEC’s objective is to liberalize the markets of the group’s most developed countries by the year 2010, and to achieve in 2020 the complete liberalization of the APEC economies (Matus, 2004).
The strategy of “open regionalism” as implemented by China is to construct a regional and global political economy that reduces its dependency on the North American market, to generate more control over its vulnerability for global financial crises, and moreover, to transform Asia into a zone of mediation between the United States and China. With this last matter,
In the late 1990s, it was the East Asian financial crisis of 1997-98 that brought about new views on global relations and changes in Asian relations. The severity of the crisis came to many as a surprise and a shock. The next shock was that the international support was weak and misguided. The IMF imposed policy conditions that were not suited to the specificities of
In 2000, the AMF idea was revived by
The rapidly changing economic position of
This new attitude on South-South cooperation is an example of the general trend of a profound “de-Maoization” of
Since the beginning of the twenty-first century,
While
Peacefulness is stressed in the Chinese policy documents for bilateral and multilateral development relations with
In
The economic activities of the world’s largest developing country with the world’s poorest region have been rapidly growing and in the 1990s China-Africa trade increased 700 percent. In 2000, the China-Africa Forum started a new period of trade cooperation and investment, resulting in a doubling of trade from 2000 to 2003, and again from 2003 to 2005, when trade amounted to $32 billion. Much of this increase was due to the growing Chinese import of oil from countries like
The government of
With the
The global South and globalized markets
In the 1980s and 1990s, the transformation of the private sector into the predominant motor for economic development and a reduced role of the state in the economy were the main elements of international policy prescriptions for low-income countries. This became known as the Washington Consensus, because it was a view shared and effectively applied by US government agencies as well as the IMF and the World Bank (all based in
While the rise of China and the new South-South relations have come about in the context of neoliberal globalization, involving developing countries that have gone through profound neoliberal reforms, these trends implicate important criticisms of the dominant neoliberal approach to achieving economic development in developing regions. The economic success story of
The apparent paradox, then, is that economic liberalization has been as central to
Apart from setting an example for alternative development strategies,
Notes
[1] Some of the
[2] The rising FDI figures do not imply that it was mainly foreign private investment that financed
[3] The APEC countries are
[4]
[5] Speech at the 11th session on Economic Cooperation among Developing Countries,
[6] In a speech at the 42nd Munich Conference on Security Policy,
[7] An extensive overview of China’s global economic expansion and the effects on developing countries and transition economies can be found in two special issues that we guest edited for the Journal of Developing Societies (numbers 3 and 4 of volume 23, 2007) with case studies on Africa (by Piet Konings), Indonesia (by Thomas J. Lindblad), the Middle East (by Gouda Abdel-Khalek and Karima Korayem), Russia (André Mommen) and Latin America (by us).
Alex E. Fernández Jilberto is senior lecturer in International Relations at the
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Alex E. Fernando Jilberto is Senior Lecturer in International Relations at the University of Amsterdam and the author of numerous works on the political economy of Latin America and developing countries Barbara Hogenboom is Lecturer in Political Science at the Centre for Latin American Research and Documentation (CEDLA) in Amsterdam. She writes on transnational politics, globalization and the political and economic development of Mexico and Latin America. They are coeditors of Big Business and Economic Development: Conglomerates and Economic Groups in Developing Countries and Transition Economies Under Globalization and Latin American Conglomerates and Economic Groups Under Globalisation.
This is a revised and developed version of an article that appeared in The Journal of Developing Societies Vol. 23, 3, 2007. Posted at
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