China’s Global Statecraft

China’s Global Statecraft

An interview with Ching Kwan Lee.

Workers stand on the Hong Kong–Zhuhai–Macau Bridge in 2017. (Anthony Wallace/AFP via Getty Images)

Ching Kwan Lee’s The Specter of Global China: Politics, Labor, and Foreign Investment in Africa (2017) had a major impact on discussions about Chinese global economic policy, transcending a tired debate about whether China is engaged in neocolonialism. Lee’s fieldwork drew our attention to both the continuities and ruptures between Euro-American empire and an ascendant China in patterns of investment, natural resource extraction, and labor politics. But much has changed in the half-decade since the book was published. China’s overseas investments have been dramatically curtailed; political and economic disarray in the United States has bolstered China’s relative geopolitical standing; the Chinese government has become increasingly repressive internally, especially in the peripheries of Tibet, Xinjiang, and Hong Kong, while seemingly more aggressive in the South China Sea and Taiwan; and of course, a global pandemic has occurred. I spoke with Lee to get her thoughts on these developments and to hear how her understanding of “global China” is evolving. —Eli Friedman

 

Eli Friedman: The Financial Times recently reported on new challenges for Chinese lending in sub-Saharan Africa. Without getting too bogged down in the interminable debate on “debt trap diplomacy”—the idea that Beijing is strategically extending loans with unfavorable conditions with the aim of exerting political control over impoverished nations—what do you make of the potentially real issue of growing debt distress in the region? Do you anticipate the imposition of IMF-style austerity, slashing of social spending, or reductions in infrastructural development? After decades of rapid expansion, what might be the social effects of tightening up Chinese lending?

Ching Kwan Lee: The FT report did a great job debunking current mythologies about Chinese loans for infrastructure. Citing experts on international aid and loans, it shows that many clauses of Chinese loans (such as requiring Debt Service Reserve Accounts) are standard components of comparable loans by Western countries and agencies. And the recent spate of debt distress stories has a lot to do with the natural life course of these loans. These fifteen-to-twenty-year loans are approaching maturation, and the Chinese government and debtor countries have to renegotiate or restructure their agreements. None of the feared Chinese takeovers of airports or ports have happened yet. And tightening regulations over these loan disbursements can lead to more accountability.

Along these lines, I want to applaud colleagues at the China Africa Research Initiative (CARI) who have consistently called out misinformation, lack of understanding of common legal terms, and erroneous reports published by Western media about Chinese loan practices. Their latest paper tears apart two reports by the state media in France about a Chinese-financed highway in Montenegro, which claimed that Montenegro’s Port of Bar could be annexed by China “completely legally,” thanks to an “extraordinary contract” that had “already [been] implemented by the Chinese in Sri Lanka or in Djibouti.” None of this is factually true!

False alarms and misinformation circulating in the world media do not mean Chinese lending practices are beyond reproach. Both the FT article and the CARI report only scratch the surface. We have to ask what interests and which players have been driving China’s lending spree. In most debates, people write about “China” as if there is a willful mastermind located in Beijing, pulling levers and making sinister decisions. In reality, there are many bureaucratic, ministerial, corporate, and private interests behind the “Going Out” policy, or the Belt and Road Initiative (BRI). These interests compete as much as they collude, and often they end up defying, derailing, or defeating Beijing’s grand strategy.

In The Specter of Global China, I explain the ways in which Chinese loans are predatory and pernicious. In Zambia, they were supply-driven: they were not initiated by would-be debtor countries but by Chinese state-owned contractors going abroad to export surplus capacity. The clout and connections of these state-owned enterprises allowed them to secure financing from the Export-Import Bank of China or the China Development Bank, and they then peddled these already approved, shovel-ready projects to government officials in Zambia. To maximize corporate profit, these powerful contractors exploited the clause of non-competitive single sourcing from China to set inflated price tags. Not only are these projects lucrative (with 30 to 40 percent higher costs due to the lack of bidding, according to Zambian technocrats); they are also secured as Chinese government loans to African governments. African technocrats knew full well the problem of inflated loans would come back to haunt their countries. But election-minded politicians were more concerned about getting roads and bridges built fast enough to keep them in power than repayment in twenty years, at which point they would be long gone.

In short, moral hazard plagued both lender and borrower in these loan agreements, sacrificing national interest (both Chinese and African) to corporate profits and personal political power. You have to remember the Chinese government suffers financially when African countries default. And there is of course corruption as well, as seen in the recent arrests and sentencing of two former high-level officials at the China Development Bank [including a life sentence on bribery charges for former bank chairman Hu Huaibang]. Also, don’t underestimate the power of elections in poor but sovereign countries. Voters can return new ruling parties with a mandate to cancel or renegotiate previous Chinese loans. For example, after winning an election in 2019, Malaysian Prime Minister Mahathir bin Mohamad renegotiated the terms of a major BRI rail project, slashing $5 billion off the original price tag. Even if setting debt traps was Beijing’s intention, it is a tricky business!

Having conducted fieldwork over a seven-year period among African miners, workers, government officials, and political leaders, and having personally experienced the deplorable and punishing conditions of “roads,” where they exist at all, I totally sympathize with the desperate desire to build infrastructure. And if Chinese loans are the only game in town, what would you do? If the United States or the World Bank offers an alternative credit line, the game may change. But for now, at a minimum we need both factually accurate reports and in-depth analyses about the mechanisms and politics of loan agreements, rather than obsessing over the rise and fall of aggregate loan amounts.

Friedman: China is now the world’s second-largest economy, largest exporter, largest recipient of foreign direct investment, and biggest trading partner for the most countries. In other words, “global China” is by no means a niche concept; it is already a lynchpin of global capitalism. What relevance do the insights you gleaned from your work in Zambia have for other regions?

Lee: To me global China is not so much a geographical but a political phenomenon. It is a bundle of power mechanisms China deploys in different combinations to different parts of the world—whether in Africa, Latin America, or Southeast Asia—with various degrees of effectiveness. The advantage of seeing global China as a Chinese state-capitalist power project, much like David Harvey’s conceptualization of neoliberalism as a global capitalist class project, is that it forces us to ask questions about agency (who), interests (why), methods (how), and resistance, countermovements, adaptations, and accommodations (so what). It steers us away from a flawed but still dominant conceptual and methodological nationalism, which reifies the nation-state as the default unified actor in the global arena.

In a forthcoming issue of the China Quarterly, which features a new generation of scholars’ cutting-edge work on global China, I identify three main modes of power China has used around the world: economic statecraft, patron clientelism, and symbolic domination.

The BRI, for example, is an instance of economic statecraft, defined as the state’s use of economic means to achieve diplomatic and political goals. The advantage of thinking in terms of power rather than policy is that we begin to see that China is not unique in leveraging economic incentives and resources to achieve political objectives, and therefore we should not demonize China as singularly aggressive. I am not the first to point out that debt traps, another example of economic statecraft, are by no means a Chinese invention. The World Bank, the IMF, and donor countries in the West have for decades imposed coercive structural adjustments on developing countries as loan conditions. Thinking in terms of types of power also opens up questions about how China might practice power differently than, say, the United States. A main characteristic of Chinese economic statecraft is the centrality of state-owned enterprises, or the deployment of state capital, which is distinct from but in competition with global private capital.

Critics have also pointed to efforts by China’s United Front apparatus—the Communist Party strategy of coopting and neutralizing potential opposition by constructing patron-clientelist relations—to collude with foreign nationals or diasporic Chinese to advance Beijing’s agenda. But it isn’t as if only a communist regime would use this method to increase influence abroad. Other countries use patron clientelism (the stable exchange of material benefits for political allegiance) all the time. The real question is how China’s practice of patron clientelism differs from other state’s use of this mode of power, what the consequences of China’s model are, and what pushbacks it provokes.

The same holds for symbolic domination—the exercise of influence through shaping people’s common sense, disposition, and habits of thought. China is learning the ways of major powers in setting up its own global network of news media, language, and cultural institutions, disbursing international scholarships and running training workshops for government and NGO professionals. But China has done all this with the visible, clumsy, and at times blatantly repressive hands of the state, whereas Western countries may outsource these initiatives to civil society or some independent public bodies.

Friedman: You have recently been involved in an exciting new project, The People’s Map of Global China. Can you talk a bit about the motivation for this project, and how you hope it will be used?

Lee: I came up with this idea after completing my book and realizing that most journalistic reports in the public domain fail to capture the varied local realities that have developed in relation to China’s global presence. I thought we needed a source of information and knowledge registering perspectives and interests of not just government or capital but of ordinary people. I made a pitch to Ivan Franceschini, an absolutely amazing, well-connected young scholar at the Australian National University, who, together with Nicholas Loubere at Lund University, is the intellectual force behind the essential Made in China online journal. He ran with the idea, and almost overnight an editorial collective was formed, with seed funding from various institutions. The main goal of the People’s Map is to track the complex and rapidly changing development of global China by engaging an equally global civil society. Using an interactive, open-access map format, we invite and coordinate with NGOs, journalists, trade unions, academics, and the public at large to provide updated and updatable information on various dimensions of the BRI and other Chinese projects taking place in their localities.

There are other online trackers maintained by think tanks and consultancy firms, focusing on investment and finance. In contrast, ours is a bottom-up initiative that aspires to provide a democratic platform for the articulation of public and local voices often marginalized by political and business elites, national governments, or media outlets in the Global North. The map even features artists’ perspectives: there is a photo essay and interview with artist Sao Sreymao about her exhibition “Under the Water,” which explores villagers’ changing experience of their rivers, lands, and lives after the Lower Sesan 2 Dam commenced construction in Cambodia. While the project is still at the beginning stage, we hope that the information collected by this networked global civil society will be a useful resource for policymakers, academics, and international advocacy networks.

Friedman: In a recent talk, you took insights from the global China framework you first developed in Zambia and applied it to the dramatic political events of contemporary Hong Kong, where you have spent much of the last few years. This seems like a surprising move. Hong Kong could not be more different from sub-Saharan Africa: it is quite literally attached to mainland China, and it is a Special Administrative Region of the PRC. How does a global China framing help us to comprehend Hong Kong’s current dilemma—and what can Hong Kong teach the rest of the world about an ascendant China?

Lee: It is exactly because Hong Kong and Zambia cannot be more different that the parallel presence of global China and its modalities of power are all the more salient. In both places you find the offloading of surplus capacity from China through mega-infrastructure projects. In Hong Kong, there are “white elephant” projects like the West Kowloon high-speed rail and the Hong Kong–Zhuhai–Macau Bridge; in Zambia you find many roads and bridges financed by Chinese loans. All were built by Chinese state-owned contractors. In both places, you find similar attempts to co-opt the political elite and influence media and education to promote China and Beijing’s worldviews. Thanks to variation in local political and social dynamics, the effects are different. China has managed to exercise far more influence in affluent Hong Kong than in impoverished Zambia, largely because of its sovereignty over the former. Sovereignty matters: this is the first lesson we learn from Hong Kong’s experience. It goes against many Marxist analyses that see economic independence and dependence as more fundamental and decisive than political independence. Against the grain of popular discourse, I think the term colonization is more apt in Hong Kong than in Africa in relation to Chinese aggression. Colonization, to me, refers to an external power’s transplant and imposition of institutions to a local society, and not just a catch-all moral critique of economic domination.

The second lesson is about countermovements, or resistance to global China. Hong Kongers’ resistance to Chinese interventions in the past two decades has been fueled by Chinese internal colonization, and it amounts to a decolonization struggle. Its energy and persistence in 2019 and 2020 caught worldwide attention. But Hong Kong is just an extreme case of the scope, intensity, and visibility of resistance. Scholars and journalists writing about global China often emphasize Chinese ambitions and strategies, relegating countermovements, whether popular or elite, to a footnote. Yet these countermovements, whether they take the form of social and community protests or behind-the-scenes negotiations, appropriations, and adaptations, often limit or reshape the global China project. In the short term, people could say Hong Kong has lost the battle in its fight against Beijing, which has successfully reined in this restive city. But in destroying the only free and global city within its territory, China also incurs irreparable reputational, political, and economic damage, whose effects may only become visible and tangible in the years to come. Paraphrasing Zhou Enlai, I think it is “too soon to say” what the implications and impacts of the 2019 anti-extradition movement are.


Eli Friedman is Chair and Associate Professor in the department of International and Comparative Labor at Cornell University’s ILR School. He is the author of The Urbanization of People: The Politics of Development, Labor Markets, and Schooling in the Chinese City, forthcoming from Columbia University Press.

Ching Kwan Lee is professor of sociology at UCLA. Her forthcoming book Hong Kong: Global China’s Restive Frontier will be released later this year by Cambridge University Press.


Lima