Economic statecraft in China's new overseas special economic zones: Soft power, business or resource security?

International Affairs

Volumn 88, Issue 4, 2012, Pages 799-816

  Bräutigam, Deborah ^a   Xiaoyang, Tang ^b  

^a AMERICAN UNIVERSITY   (United States)

^b INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84863996037     PISSN: 00205850     EISSN: 14682346     Source Type: Journal    
DOI: 10.1111/j.1468-2346.2012.01102.x     Document Type: Article

References (60)

1. The relative lack of scholarship specifically on China is not limited to international political economy. See Marie-Eve Reney, 'What happened to the study of China in comparative politics?', review essay, Journal of East Asian Studies 11: 1, 2011, pp. 105-35.
2. Shaun Breslin, 'Understanding China's regional rise: interpretations, identities and implications', International Affairs 85: 4, 2009, pp. 817-35
3. Trade data are openly available, but China publishes no country-level data on aid or other official flows, and overseas FDI statistics are incomplete.
4. William J. Norris, 'Economic statecraft with Chinese characteristics: the use of commercial actors in China's grand strategy', Ph.D. diss., MIT, Cambridge, MA, 2010, p. 72.
5. David Baldwin, Economic statecraft (Princeton, NJ: Princeton University Press, 1985), p. 3.
6. Alberto Alesina and David Dollar, 'Who gives foreign aid to whom, and why?', Journal of Economic Growth 5: 1, 2000, pp. 33-63.
7. Vivien Foster, William Butterfield, Chuan Chen and Nataliya Pushak, Building bridges: China's growing role as infrastructure financier for sub-Saharan Africa (Washington DC: World BankThe researchers cited no evidence to back this assumption., 2008), p. 64
8. Pádraig Carmody, 'An Asian-driven economic recovery in Africa? The Zambia case', World Development 37: 7, 2009, pp. 1197-207
9. Haibing Zhang, 'China's aid to Africa: oil oriented or not?', World Economy Studies, no. 10, 2007 (Shanghai: Shanghai Academy of Social Sciences 76-80.
10. Sook-Jong Lee, 'China's soft power: its limits and potentials', EAI issue briefing no. MASI 2009-07: 8 (Seoul: East Asia Institute, 2009), p. 8.
11. Joseph Y. S. Cheng and Shi Huangao, 'Sino-Venezuelan relations: beyond oil', Issues and Studies 44: 3, 2008, pp. 99-147.
12. Mark Yaolin Wang, 'The motivations behind China's government-initiated industrial investments overseas', Pacific Affairs 75: 2, 2002, pp. 187-206
13. Joseph S. Nye, Soft power: the means to success in world politics (New York: PublicAffairs, 2004).
14. Jianbo Luo and Xiaomin Zhang, 'China's African policy and its soft power', AntePodium, Victoria University of Wellington, 2009, accessed 16 May 2012.
15. Peter J. Katzenstein and Takashi Shiraishi, eds, Network power: Japan and Asia (Ithaca, NY: Cornell University Press, 1997).
16. Wang, 'The motivations'.
17. Henry Wai-chung Yeung, 'Strategic governance and economic diplomacy in China: the political economy of government-linked companies from Singapore', East Asia: An International Quarterly 21: 1, 2004, pp. 40-64.
18. Norris, 'Economic statecraft with Chinese characteristics', p. 83.
19. Norris, 'Economic statecraft with Chinese characteristics', p. 83.
20. Policy banks are explicitly directed to finance government policies and projects and do not have to operate strictly on market principles. Yet as a review by Standard & Poor's put it, Beijing 'does not guarantee the obligations of China EXIM or provide automatic solvency support': Standard & Poor's, Bank credit report: Export-Import Bank of China (New York, 2006), p. 3.
21. Zhejiang Foreign Trade and Economic Cooperation Bureau, 'Benin China economic and trade development center was launched', 12 Jan. 2009
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24. State Council, 'Replies on approving the suggestions to promote the construction of overseas economic and trade zone', State Council Letter no. 17, 18 Feb. 2008.
25. Xinhua, 'Jiangxi Province plans to invest RMB3.8 billion in Algeria'. ,2012.
26. For an excellent discussion of FOCAC, see Ian Taylor, The Forum on China-Africa Cooperation (New York: Routledge, 2011).
27. Shortly after the Algerian zone was approved, the Algerian government changed its legislation, requiring Algerian companies to own 51 per cent of any new companies, dissuading the Chinese investor. In Mexico, the Chinese developer (Geely Automobiles) decided not to move forward with its proposal, possibly in order to concentrate on its new purchase of Volvo. The Venezuela zone proposed by Inspur, a Chinese computer company with business interests in Venezuela, was considered the most promising of those reviewed in the 2007 tender but it appears not to have been implemented. The St Petersburg zone continued to be developed, but the developers decided to withdraw from the MOFCOM programme, because they wanted to focus on residential and commercial real estate rather than manufacturing (authors' interviews with MOFCOM officials in Beijing (November 2009), Shanghai (July 2011) and Xiamen (September 2011)).
28. People's Republic of China Ministry of Commerce, 'China's first overseas trade and economic cooperation zone unveiled in Pakistan', 28 Nov. 2006, accessed 20 May 2012.
29. Unless otherwise stated, this paragraph and the next draw on personal communications with a knowledgeable official in the Chinese government, July 2008.
30. Interview, Ministry of Commerce officials, Beijing, 25 Nov. 2009.
31. Xilai Bo, 'Sannian zhijou jianshe 3 dao 5 ge jingji maoyi hezuo qu' [Construct 3-5 economic cooperation zones within three years], interview transcript, China Central Television, 13 Nov. 2006.
32. Interview with Commercial Representative of Chinese Embassy, Dar es Salaam, July 2008; interview with MOFCOM official, Beijing, Nov. 2009.
33. China-Russia Economic and Trade Cooperation website, 14 Nov. 2011, accessed 16 May 2012.
34. Interview with department manager of Northwestern Forestry Co., Xiamen, 10 Sept. 2011.
35. China-Russia Economic and Trade Cooperation website.
36. People's Republic of China, Ministry of Commerce, 'Shangwubu, caizhengbu kaizhan diyici hezuoqu queren kaohe' [MOFCOM and MOF carry out the first inspection of cooperation zones], 13 Aug. 2010, accessed 21 May 2012
37. CRCC China-Africa Construction Limited, 'Introduction of Lekki Free Trade Zone project', 24 Dec. 2010, accessed 16 May 2012.
38. People's Republic of China Ministry of Commerce, Letter of Cooperation Zone Office, Index for evaluating regional external environment of overseas cooperation zones, no. 37, 7 Dec. 2010.
39. Chinese Overseas (Africa) Economic and Trade Cooperation Zones and China-Africa Development Fund, Newsletter of joint meeting of Chinese overseas (Africa) economic and trade cooperation zones and China-Africa Development Fund, no. 2, July 2010; Hongdou Group, 'Short-term financing prospectus', no. 1, April 2011; International Monetary Fund, Direction of trade 2010 (Washington DC: 2011); authors' interviews with manager of Longgiang zone, Xiamen, 10 Sept. 2011, and Ethiopia zone, Addis Ababa, 18 Nov. 2012.
40. China-Africa Development Fund, promotional booklet distributed at FOCAC ministerial meeting, Sharm el Sheikh, Egypt, 5 Nov. 2009; interviews, Xiamen, 11 Sept. 2011.
41. Xinhua, 'Zhongguo jiajianli 50ge jingwai jingmao hezuoqu jianshao maoyi moca' [China to establish 50 overseas economic cooperation zones to reduce trade frictions], 19 April 2012.
42. Ziying Fu, 'International strategy and a harmonious world for the financial industry and businesses', speech presented at China Financial Forum, Beijing, 12 Feb. ; Xilai Bo, 'Sannian zhijou jianshe 3 dao 5 ge jingji maoyi hezuo qu' [Construct 3-5 economic cooperation zones within three years].2007
43. State Council, 'Replies on approving the suggestions to promote the construction of overseas economic and trade zone'.
44. 'Interview with Chinese ambassador in Zambia Li Qiangmin', Southern Weekly, 7 April 2010, accessed 16 May 2012.
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47. People's Republic of China, Ministry of Commerce, 'Why China builds cooperation zone in Egypt', 16 Oct. 2008, accessed 16 May 2012.
48. China-Africa Development Fund, promotional booklet.
49. China-Africa Research Center, 'China-Africa trade and economic relationship annual report 2010', Beijing Chinese Academy of International Trade and Economic Cooperation, 2010, accessed 16 May 2012.
50. 'Hu signs Mauritius accords', China Daily, 18 Feb. 2009, accessed 16 May 2012.
51. A. C. Alves, Chinese economic and trade cooperation zones in Africa: the case of Mauritius, occasional paper no. 74 (Johannesburg: South African Institute of International Affairs, 2011), pp. 1-16.
52. Interviews with Nigerian officials, Lekki zone, Lagos, June 2010, and Chinese embassy, Abuja, June 2010. Mthembu-Salter concluded that the Chinese government 'intervened and unilaterally restructured the consortium in CCECC's favor', but our interviews did not confirm this: Gregory Mthembu-Salter, Chinese investment in African free trade zones: lessons from the Nigerian experience, Policy Briefing no. 10 (Johannesburg: South African Institute of International Affairs, 2009), pp. 1-4.
53. Interview with Lekki zone Beijing representatives, Beijing, 27 Nov. 2009.
54. Interview with department manager of Cambodia zone, Xiamen, 8 Sept. 2011.
55. World Bank, Doing Business Rankings, 2008, accessed 16 May 2012.
56. We use the Heritage Foundation's China Investment Tracker for this exercise. This database tracks and attempts to confirm signed FDI deals of US$100 million or more since 2005: (various dates), accessed 16 May 2012.
57. Although they have not (yet) made significant investments, Chinese companies had exploration concessions in Cambodia.
58. Norris, 'Economic statecraft with Chinese characteristics'.
59. 'Shangwubu qiantou, shiyi buwei baojia zhongguo zhizao haiwai zhuanyi' [Led by MOFCOM, eleven ministries help made-in-China move overseas], China Business News, 19 Aug. 2007, accessed 16 May 2012.
60. Zones in Pakistan, Egypt, Zambia, Thailand and Russia (Baltic Pearl and Ussuriysk) were under way before the programme was even announced. Another six companies-in Vietnam (Longgiang), Ethiopia, Cambodia, Russia (Tomsk), Nigeria (Lekki) and Korea-had developed plans to construct zones.