Index

Note: Figures and tables are indicated by f and t following page numbers.

advanced industrial economies: bilateral development finance/aid, 16, 19, 24, 72, 112–118, 137; changing to China’s more business-oriented approach, 17, 105, 125–128, 132, 167–168; compared to China’s funding and aid volume, 25, 104, 118; construction contractors’ focus on Europe and North America, 95; debt cancellation and restructuring policies, 105, 134, 165, 166; development finance history of, 10, 14–15, 163; export-import banks, decline of, 142–143; foreign assistance from, 72; mercantilist foreign assistance and, 124–126, 128–129; PFAs’ role, reidentifying of, 169–170; private capital mobilization in, 127; “Southernization of global development,” 18, 168; state-business relations in, 139; underdeveloped regions as too risky for project finance, 70–71, 101, 105, 167. See also aid agencies; export credit agencies (ECAs); liberal international order (LIO); OECD countries
African Development Bank, 120
African Development Fund, 136
Agricultural Bank of China, 27, 28, 76, 87t
Agricultural Development Bank of China, 28, 36, 143, 149, 152, 187n17
aid agencies: compared to China’s policy banks, 105, 112–118; international aid regime and, 22, 123–128; OECD Development Assistance Committee regulating, 112, 128; policy banks’ practices merging with (post-2008 financial crisis), 123; as type of public financial agencies, 4, 29. See also official development assistance (ODA)
AidData, 24
Angola, oil-backed loans to, 97
Angola Mode, 97
Argentina’s debt problem (1950s and 1960s), 135
Arrangement on Guidelines for Officially Supported Export Credit (1978), 129
Asian Development Bank, 120
Asian financial crisis, 34, 36, 45, 152
Asian Infrastructure Investment Bank (Beijing), 3, 69, 120f, 121
asset management companies, 46, 85, 135

banking system’s evolution, 27–28, 85
Bank of China (BOC), 27, 28, 76, 87t, 143
Basel II, 36
Basel III, 151
Belt and Road Initiative (BRI): BOC and ICBC funding for, 143; Build Back Better World (B3W) initiative vs., 1, 23, 166–168; CDB role, 31, 151, 169; in China-versus-LIO narrative, 14; developing countries’ funding from, 24; history of, 2, 6; mission of, 7, 79; mobilization of China’s banks to invest in, 147; Summit (2017), 24; Tsingshan project and, 90; U.S. International Development Finance Corporation as countermeasure to, 103
Berne Union, 129
Better Utilization of Investments Leading to Development Act (U.S. 2018), 103
bilateral development finance/aid: disparity between China and existing Western economies, 16, 19, 137; industrial economies providing assistance, 24, 112–118; Western change to China’s more business-oriented approach, 17, 105, 125–128, 132, 167–168. See also convergence of China with Western finance approach; demarcation issue
blended finance, 17, 105, 121, 126–127, 152, 154
bond market: apportioned bond issuance, 32–35; CDB issuance of bonds, 30–31, 31f, 36, 37–40, 74; floating-rate bonds, 35; government bonds to fund public projects, 49, 49f; IBRD and, 121; interbank bond market, 9, 19, 21, 25, 31, 35–37, 40, 169; international bonds issued by CDB, 31, 34, 179n22; Japanese vs. German practice, 29–30, 30f, 38, 39; local government bonds, 65, 66, 67f; market-based auctions, 35–36, 40; risk weighting, 30, 36–38, 148, 151; Yankee bonds, 31, 34; zero-coupon bonds, 136; zero-yield bonds, 137–138. See also sovereign guarantees
Brady Plan (1989), 136, 138
BRI. See Belt and Road Initiative
Budget Law (China): (1994), 51, 65, 182n24; (2015), 66, 182n24
Build Back Better World (B3W), 1, 23, 103, 125, 166–168
bundled loans, 52, 61, 62, 64, 75, 184n58
business-oriented approach of China, 16–17, 22, 23, 123, 140; advanced industrial economies transitioning to, 17, 105, 125–128, 132, 167–168. See also debt relief and restructuring

capitalizing development, 20–21, 24–40; apportioned bond issuance (1994–1998), 32–35; banking system’s evolution, 27–28; not entirely state-led, 7; policy banks’ hybrid practice of funding, 28–31; public finance market, creation of, 31–39; in “real” market game (1998–2008), 34–37, 135; return to policy banking (2008–present), 37–39; state market actors, 8–9, 39–40. See also bond market; revenue-based aid and development finance
catch-up development: cheap capital fueling, 160; China, 100, 131, 139; clash of catch-up state with incumbent rulemakers, 103, 131; East Asian developmental states, 11, 69, 87; Japan, 11, 16, 23, 69, 87, 102; South Korea, 11, 12, 69; Western-led financing for, 168. See also latecomer status of China
CDB. See China Development Bank
CDB Capital Co. Ltd., 54, 62–63, 75, 121
CDB Leasing Co. Ltd., 54, 75
CDB Securities Co. Ltd., 54, 75
Central Huijin Investment Ltd., 85–86, 87t
centrally planned economy: institutional legacy of, 44, 135, 155; moving away from, 25, 54, 162; original status of, 8, 85; reluctance to return to, 9
Chen Yuan, 34–37, 45, 46, 57–58, 83t, 84, 150, 157–158
Chery Automobile, 53, 59
China-Africa Development Fund, 121
China and Transformational Exports program (U.S.), 103, 107
China Banking and Insurance Regulatory Commission, 153, 179n19
China Banking Regulatory Commission (CBRC), 36, 38, 62, 149, 151, 152
China Communications Construction Company, 155
China Communications Construction Group, 91t, 94
China Construction Bank (CCB), 27, 28, 43, 76, 87t
China Development Bank (CDB): account separation, policy on, 153, 170; administrative apportionment for, 33–36; autonomy (1998–2008), 32, 34–37; board of directors, 84; Bureau of Financial Analysis, 46; Bureau of Loan Review, 46; Bureau of Market and Industry Analysis, 46; capital adequacy ratio, 151; capital infusion (2015), 86, 186n15; compared to commercial banks, 39; compared to German counterpart, 38; compared to Japanese counterpart, 32–33, 38, 119; compared to other national banks, 119–120, 120f; competing with commercial banks, 23, 54–55, 76, 143–144, 148, 152, 159; as de facto ECA, 107; development-oriented bank as compromise reform, 150–154; Doubling Deposit Program, 38; DSSI not applicable to, 135; Enterprise Bureau, 55; establishment of, 5, 8, 28, 30; fundraising mechanisms of, 25, 28–40; heads of, 82–84, 83t, 158; history of funding reforms, 31–39; hybrid Chinese practice, 30–31, 31f, 119–120; initial capitalization of, 86; international practices adopted by, 36; Lending Committee, 46; loan disbursement compared with China’s local government revenue, 56, 56f; as main bank for domestic infrastructure and industrial development, 3, 9, 12, 21, 41, 54; market-oriented nature of, 106; ownership structure of, 85; policy deposits used to expand deposit pool, 26f, 38, 40; politically weakened status of, 158–160; provincial branches, 53, 55–57; as public financial agency, 49; regulatory mandates (2017), 152; reregulation of, 148–152; role of, 3, 9, 19, 44; scandal under Hu administration, 158–159; shareholders of, 85–87, 87t; specialized bank loans assumed by, 44; state-controlled fundraising (1994–1998), 32–34; as state-led agency, 16, 105, 149; structure of liabilities, 25, 26f; subsidiaries of, 121; as “superbank” in Chen years, 158; transition to “real” bank under Chen, 34–35, 135; transition to regular commercial bank, 2007 initiative for, 37, 39, 62, 150–151, 188n45. See also bond market; convergence of China with Western finance approach; demarcation issue; domestic infrastructure financing; financialization of the state; long-term funding from CDB; overseas development finance; policy banks; sovereign guarantees
China Exim. See Export-Import Bank of China
China Export & Credit Insurance Corporation. See Sinosure
China Harbor Engineering Company, 94, 127
China International Development Cooperation Agency (CIDCA), 18, 115, 146–147, 170
China Investment Corporation, 86
China Merchants Group, 96–97
China Merchants Holdings, 97
China Merchants Port Holdings, 96
China National Petroleum Corporation (CNPC), 46, 93
China Railway Engineering Corporation, 99
China–Venezuela Joint Fund, 98–99
Chinese Academy of Social Sciences, 137
Chinese firms assisted through overseas development finance. See mercantilist foreign assistance
Chongqing as Urban Development Investment Corporation model, 54
cities. See subnational governments
Cold War, 10, 14, 123
collateral: for domestic infrastructure financing, 41, 52, 54, 60; to enable policy banks’ loans, 97, 100–101, 133; future receivables used as, 12, 22, 97, 98, 100–101, 156, 163, 164; historical use of, 164; LGFV using future fiscal revenues as, 52, 54
Commercial Bank Law (China), 51, 62
commercial banks: branches of, 55; CDB relationship with, 37, 54–55, 148, 150; competing for domestic lending, 23, 54–55, 62; competing for overseas lending, 3, 18, 76–79, 111, 139, 143–144, 148, 152, 159, 164, 199n33; debt-equity swaps, 45–46; development of, 28; floating-rate bonds and, 35; foreign-currency savings used by, 143–144; LGFV financing from, 54; local government bonds and, 66, 67f; policy-bank bonds, risk for, 36; prioritizing profit-generating projects, 168; soft loans and, 62; state-owned, 6, 12, 76, 79
commodity-backed financing, 88, 97–98, 163–165. See also collateral
Common Framework for Debt Treatments, 137
Communist Party of China (CPC), 70, 79
Company Law (China), 43
comparative framework, 2, 4–5, 15, 105–122, 140
concessional loans: advanced industrial economies making, 118, 132, 163; aid agencies making, 115; China Exim making, 153; China’s official foreign assistance including (2013–2018), 72, 73f; Hambantota Port project, 93, 95; Latin America debt crisis (1980s), 136; lower interest rates on, 72, 92; in official development assistance, 114, 124; policy banks and MDBs making, 120
construction contractors: BOOT (build-own-operate-transfer) model, 92; BOT (build-operate-transfer) model, 92, 97; cheaper products and services from China’s contractors and suppliers, advantage of, 131–132, 167; in overseas projects, 70, 80, 88, 91–95, 91t, 95f, 127, 131–132, 145, 145f, 157; transition from contractor to project operator/equity investor, 142, 145, 145f; Western focus on Europe and North America, 95. See also developing countries; Hambantota Port financing; mercantilist foreign assistance; underdeveloped regions
convergence of China with Western finance approach, likelihood of, 15, 16–20, 22–23, 105, 119, 122, 128, 132, 137–138, 140, 147, 154, 160, 163, 168
corruption, 53, 61, 158–159
COVID-19 pandemic, economic effect of, 105, 137, 156, 159, 165, 170–171
credit enhancement, 97, 121, 127, 158, 159, 164

DAC. See OECD Development Assistance Committee
debt-equity swaps, 45–46, 135
debt-generated virtuous circle, 58–61, 58f, 137, 155, 164
debt relief and restructuring, 22, 105, 132–138; Argentina’s debt problem (1950s and 1960s), 135; China’s exception to IMF/Paris Club approach, 133–134; China’s rejection of debt forgiveness and reduction, 16, 22, 134–135, 137, 165, 166; China’s renegotiation with Malaysia for East Coast Rail Link project, 155; Debt Service Suspension Initiative, 134; domestic debt restructuring and LGFVs, 22, 61–64, 66–67, 135, 137, 165; Global Development Initiative (pandemic era), 105, 171; Paris Club, 135; Western approaches to, 105, 134, 136, 146; Western vs. Chinese approach, 137–138, 146–147. See also sovereign debt relief; sovereign guarantees
Debt Service Suspension Initiative (DSSI), 134, 165, 166
debt-trap diplomacy, 5, 6–7, 22, 23, 41, 92, 96, 146, 163–166
Decent Investment, 88–90
defaults, 60–61, 134, 146. See also debt relief and restructuring
demarcation issue between export credits (commercial) and development assistance (policy), 17–18, 20, 123, 128–129, 136, 148, 153–154, 163, 170
Deng Xiaoping, 27
developing countries: advanced industrial economies providing aid to, 118, 126, 163; China as largest creditor to, 104, 105, 109, 120f, 122, 130; China’s policy-bank loans to, 2, 6, 10, 70–71, 75, 88, 92–95, 101, 110, 112f, 118, 122, 131, 132, 139, 146, 154, 163, 165, 167; construction projects in, 70, 80, 88, 91–95, 91t, 92–95, 95f, 127, 131–132, 145, 145f, 157; debt crisis of, 16; development banks established by, 119, 120–121; DFC financing in, 127, 167; global financial crisis (2008) and, 9; late-developing countries receiving financial aid, 10–14; Paris Club’s debt treatments, 136; as recipients of official export credits of OECD member states, 109, 110f; South-South development promoted by China, 125, 170; U.S. private capital to finance projects in, 103. See also debt relief and restructuring; debt-trap diplomacy; official development assistance; underdeveloped regions
development assistance. See aid agencies; official development assistance
Development Bank of Japan (DBJ), 29, 175n29, 193n25. See also former name Japan Development Bank
development banks, 4, 22, 118–122. See also development finance; national development banks; regional development banks; specific countries’ banks
development finance: bilateral approach of China, 3, 15, 19, 24, 32, 119, 122, 137; CDB as main source of, 3, 10, 25; challenging prevailing assumptions about China, 23, 162, 164, 166; China’s more business-oriented approach, 16–17, 22, 23, 123, 140; comparative lens, 4–5, 105–122; development-oriented finance, 3, 118, 121, 149–154, 159, 173n3; future path, 23, 139–161, 168–171; history of great powers in, 10, 14–15, 163; North-South development assistance, 124; state-versus-market debate, 6–10, 162; third-pathway and unique aspects of China’s model, 12–14, 19, 145–148, 160–161; trade finance vs., 15, 16, 22; Western change to China’s more business-oriented approach, 17, 105, 125–128, 132, 167–168. See also convergence of China with Western finance approach; demarcation issue; domestic infrastructure financing; financialization of the state; latecomer status of China; marketization; multilateral development banks; national development banks; overseas development finance; public financial agencies; state-market relations; specific banks
DFC (International Development Finance Corporation), 14, 103, 120f, 125, 127, 167
diplomatic relations, 80; gaofang projects relating to diplomatic visits, 81, 90, 91, 93, 157
Document No. 43 (2014), 63–64
domestic infrastructure financing, 6, 9, 41–68; bundled loans, 52, 61, 62, 64, 75, 184n58; CDB as main bank for, 3, 9, 12, 21, 41, 54; CDB provincial branches, 53, 55–57; CDB’s unique lending mechanism, 49–50, 50f, 148, 155, 156, 160–161; in Chongqing, 54; collateral for CDB loans, 52, 157, 164; commercial banks’ role, 54–55, 164; competitiveness in, 57; creditworthiness of projects, 50–52; debt-generated virtuous circle, 58–61, 58f, 137, 164; debt restructuring role of CDB, 66–67; debt swaps, 66; defaults, 60–61; equity investment and, 54; evolution from fiscal allocation to bank loans, 42–47; financialization for state purposes, 42, 45, 51–58, 68, 138, 157; financial leasing, 54; government procurement of services as alternative to LGFVs, 64; hard loans, 44–45; loan disbursement from CDB compared with China’s local government revenue, 56, 56f; loan for appropriation as reform in late 1970s, 43; local government bonds, 65, 66, 67f; local government financial vehicles (LGFVs), 49–54, 50f, 57, 60–63, 65–66; means of, 42, 43t; nationwide market of, 50–58, 68; project review and selection by CDB, 12, 46–47, 47f, 75; public financial agencies used for, 49, 49f; public-private partnerships, 64–65; replication of China’s model in other countries, 13–14; reregulating and refinancing local government debts, 22, 61–68, 137; securities investment and, 54; soft loans, 44–45, 51, 61–64; SPC and MOF control in early years of CDB, 44–45; specialized investment companies (SICs), creation of, 43–44; syndication, 54–55, 67; in Tianjin, 53; two approaches as path to going forward, 148–154; Wuhu model, 52–54, 58. See also subnational governments
domestic savings: as CDB’s capital source, 29, 33, 36, 38; as commercial banks’ capital source, 30; funneled to policy banks by domestic financial agencies, 30, 31f; Japan’s postal savings, 11–12, 152, 178n15

East Asian developmental states: bilateral development finance of, 15; catch-up industrialization of, 11, 69, 87
East Coast Rail Link (Malaysia), 155
ECAs. See export credit agencies
Economic and Commercial Offices (ECOs) of China’s embassies, 80, 90
economic liberalism, 14, 142
emerging countries. See developing countries
energy projects, 45, 59, 109, 110, 111f, 127
equity investment: CDB Capital Co. Ltd. and, 121; domestic infrastructure financing and, 54; MDBs and, 120; overseas development financing and, 96, 144–145, 144f; prioritizing profit-generating projects, 168
Euler Hermes Aktiengesellschaft (Germany), 107, 143
European Investment Bank, 120, 125, 152
export credit agencies (ECAs), 15, 29, 76, 98, 105, 106–112; clients of, 106–107; as creditors of last resort, 107, 143; differences from China’s PFAs, 107–112; direct loans from, 106, 107; financial support to firms, 106–107, 127; at IWG meeting (2012), 130; in OECD Export Credit Group, 105, 107–109, 108t, 122, 128–129, 143, 167; policy banks as, 122, 139, 145–146; reconciling state’s objectives and firms’ business objectives, 140–141; regulation of, 107; role of, 4; types of, 106
export finance: Arrangement on Guidelines for Officially Supported Export Credit (1978), 129; China providing, 19, 22, 128–132; free-market principles and, 104; history of international cooperation, 129; international working group on export credit management, failure of, 130; laissez-faire rules of, 14, 16, 19, 122, 128, 142, 162, 167–168; OECD countries limiting credit loans for, 16; oil crisis (1970s) and, 129; separation from development assistance, 136, 170; U.S. antagonistic response to China’s unwillingness to cooperate, 130
Export-Import Bank of China (China Exim): Angola, oil-backed loans to, 97; board of directors, 84; bond auctions, 36; capital infusion (2015), 86; commercially oriented projects as focus, 150; commodity-backed financing, 97–98; competing with commercial banks, 143, 152; construction project loans, 92; East Coast Rail Link (Malaysia) financing from, 155; as ECA, 107; establishment of, 5, 28; Hambantota Port financing by, 93–95; heads of, 82–84, 83t; initial capitalization of, 86; interest rate offered by, 76; liangyou loans, 74, 79; market-oriented nature of, 106; nonperforming loan rate, 149; overseas development finance from, 25, 26f, 72–73, 74–75; ownership structure of, 85–86; policy-oriented projects as focus, 150; preferential buyers’ credits, 74; role of, 3, 121; Sovereign Business Loan Department, 74; as state-led agency, 105; structure of liabilities, 25, 26f; total assets compared to other national banks, 120f; Tsingshan financing by, 90. See also policy banks
Export-Import Bank of Japan (JEXIM), 5, 12, 106, 141–142, 175n29
Export-Import Bank of the United States (U.S. Exim), 10, 103, 106, 107, 120f; Argentina’s debt problem (1950s and 1960s), 135; charter suspension (2015), 143; China and Transformational Exports program, 130–131; creation and purpose of, 142, 170
export-import banks: general decline of, 141–145; infrastructure projects as attractive to, 164
export revenues, future receivables use to repay loans, 12, 22, 97, 98, 98f, 100–101, 156, 163, 164

fair market competition, 141, 148
fair-trade principles, 124, 147
Fang Qiuchen, 145
financialization of the state, 9, 85, 162; bonds, 21–22, 25, 27–28; domestic lending, 42, 45, 51–58, 68, 138; overseas development finance, 22, 95–100, 157, 160
Fiscal Investment and Loan Program (FILP, Japan), 11, 20, 29, 30f, 178n15
foreign aid or assistance: as China’s equivalent of ODA, 115; China’s government expenditure on (2010–2019), 24–25; China’s likelihood of increasing use of, 20, 147, 169; China’s multiple government agencies involved in, 73; China’s official foreign assistance by credit type (2013–2018), 72, 73f; construction project finance from, 92; credit allocation and, 104; to least developed countries and low- and middle-income regions, 118; Ministry of Commerce, Department of Foreign Assistance coordinating, 73; overseas development finance from (2004–2014), 25, 26f; Western-led official bilateral finance as, 166. See also concessional loans
foreign direct investment. See overseas development finance
foreign-policy agenda vs. foreign-trade agenda (China), 15, 16, 18, 170
future of China’s policy banks, 23, 139–161; challenges to “Chinese pathway,” 154–159, 168–171; comparative lens, 140; dilemma of public financial agencies, 140–148, 160; re-identifying policy banks, 160–161; two competing approaches as possible solution, 148–154. See also convergence of China with Western finance approach

G7 (Group of Seven), 14, 103, 125
G20 (Group of 20): Common Framework for Debt Treatments, 137; Debt Service Suspension Initiative (DSSI), 134, 165, 166
gaofang projects, 81, 90, 91, 93, 157
Gao Jian, 35–36
Germany’s Credit Institute for Reconstruction. See KfW
Global Development Policy Center data, 24, 25, 109, 112f
global financial crisis (2008): CDB’s commercialization and, 150; CDB’s state guarantee and, 32; decade following, 39; financialization of the state and, 9; mercantilist model’s adoption by advanced industrial countries and, 125; oil prices’ drop, 99; stimulus package in response to, 37, 38, 62
global impact of China’s development financing, 2, 3, 6, 19, 69–101, 105. See also advanced industrial economies; convergence of China with Western finance approach; latecomer status of China; underdeveloped regions
Going Global strategy, 6, 69
government ministries (China), 84, 164. See also specific ministry by name
government procurement of services (GPoS), 64
government-to-government assistance, 15, 124
gross domestic product (GDP), 48; local, 53, 56, 61, 62

Hambantota Port financing (Sri Lanka), 5, 88, 92–97; China Harbor’s lobbying for, 94, 127; debt restructuring of, 97, 137; rejected by Western financial institutions, 88, 92–93, 101
hard loans, 44–45
Heavily Indebted Poor Countries Initiative, 136
Helsinki Package (1991), 129
high-income countries: as OECD-DAC members, 114; as OECD members, 107; official export credits of OECD members to, 109, 167; as recipients of China’s policy-bank loans, 110, 112f, 132; as recipients of DFC financing, 167; as recipients of official export credits of OECD members, 109, 109f, 132. See also advanced industrial economies; OECD countries
Hu Huaibang, 39, 83t, 158
Hu Xiaolian, 83t, 135
Huanqiu Contracting & Engineering Corporation, 87t, 93
Huawei, 12, 59, 70

Indonesia: Jakarta-Bandung High-Speed Railway project, 81–82, 131; Morowali Industrial Park (IMIP), 89, 91. See also Tsingshan Iron & Steel Corporation
Industrial and Commercial Bank of China (ICBC), 27, 76, 87t, 90, 143
industrial development: advantages of later development, 11, 103, 104, 139, 167; capitalization of, 8, 100; China’s policy of debt-generated virtuous circle of, 58–61, 58f, 137, 155, 164; development finance companies as intermediaries for investments, 126; domestic infrastructure finance facilitating, 59; domestic interbank bond market funding, 21; in Europe of mid-nineteenth century, 119; losing advantage of China’s latecomer status, 168; policy banks in overseas projects of, 87–100, 139; state control of industrial sectors, 85, 156. See also catch-up development; latecomer status of China; mercantilist foreign assistance
infrastructure financing: common methods of project financing, 48–49, 48f, 164; fiscal spending for, 48, 48f; government bonds for, 49, 49f; public financial agencies providing, 49, 49f; special purpose vehicles (SPVs), 48, 48f, 49–50. See also bond market; commodity-backed financing; domestic infrastructure financing; overseas development finance
infrastructure-for-oil model, 5, 97–99
insurance on exports. See export credit agencies; Sinosure
Inter-American Development Bank, 120
interbank bond market, 9, 19, 21, 25, 31, 35–37, 40, 169
interest rates: aid agencies and, 115; in competitive bidding for overseas development projects, 54, 76, 81, 131, 144; interest-rate liberalization, 39; Japan according low rates to projects aligned with state policy objectives, 29; policy banks and, 9–10, 144, 146, 147; rates of Chinese lenders, controls on, 12, 94, 131; Western creditors’ debt relief measures and, 134. See also concessional loans
International Bank for Reconstruction and Development (IBRD), 120–121, 126
International Development Association (IDA), 121, 125, 136
International Development Finance Corporation (DFC), 14, 103, 120f, 125, 127, 167
International Finance Corporation (IFC), 121, 125, 126
International Monetary Fund (IMF), 19, 105, 133–136; Heavily Indebted Poor Countries Initiative, 136
international order, China’s effect on, 102–104, 122, 125–126. See also liberal international order
international regimes, concept of, 15, 104

Jakarta-Bandung High-Speed Railway project (Indonesia), 81–82, 131
Japan: amakudari (postretirement employment of senior bureaucrats), 83; Bosphorus Bridge financed by, 102; catch-up industrialization of, 11, 16, 23, 69, 87, 102; change to Western-style credit governance, 16–17; China as recipient of financing from, 98, 125, 164; commercial banks prioritized for overseas project finance, 149; competing against China for development projects, 81, 131; demarcation issue between export credit agency and official aid agency, 170; Fiscal Investment and Loan Program (FILP), 11, 20, 29, 30f, 178n15; as growth engine of 1970s, 1–2, 11; mercantilist foreign assistance and, 12, 23, 124, 125, 130, 141–142; New Aid Plan, 141–142; official development assistance and, 16–17, 125, 141, 164; Partnership for Quality Infrastructure, 1; postal savings in, 11–12, 152, 178n15; public financial agencies in, 11–12, 29, 30f, 141–142
Japan Bank for International Cooperation (JBIC), 6, 29, 106, 107, 120f, 142, 149, 175n29
Japan Development Bank, 5, 12, 175n29, 193n25. See also successor name Development Bank of Japan
Japan Export-Import Bank. See Export-Import Bank of Japan
Japan International Cooperation Agency (JICA), 6, 29, 83, 120f, 131, 149

KfW (Germany’s Credit Institute for Reconstruction): bonds issued by, 21, 29–30, 40; China’s emulation of, 5, 38; compared to Japanese practice, 30f; as data source, 6; development financing separate from export financing, 149; as export credit agency, 106; foreign aid-giving role, 114; KfW Development Bank, 149; KfW IPEX-Bank, 149; as national development bank, 119; total assets compared to other national banks, 120f
Korea Development Bank, 12

laissez-faire principles, 14, 16, 128, 142, 162, 167–168
latecomer status of China, 1–2, 6, 102–138; advantages of, 2, 11, 16, 19, 21–22, 71, 102, 103, 104, 126–128, 131, 139, 167; aid agencies compared to China’s policy banks, 112–118; assumptions about, 102–103; development banks equated with China’s policy banks, 118–122; development finance and, 18, 70–71, 127, 171; export credit agencies compared to China’s PFAs, 107–112; international aid regime, China’s effect on, 123–128; international credit export regime, China’s effect on, 128–132; international sovereign debt regime, China’s effect on, 132–138; losing advantage of, 18, 20, 168–171. See also convergence of China with Western finance approach
Latin America: Chinese capital in, 7, 24, 101; commodity-backed financing in, 97–98, 164; debt crisis (1980s), 136; U.S. capital in, 10. See also developing countries; specific countries
least developed countries: UN-identified, 114. See also underdeveloped regions
lending gap. See underdeveloped regions
Li Keqiang, 155
Li Ruogu, 83t, 93–94
liangyou loans, 74, 76, 79
liberal international order: Western-led, 14–15, 19
liberal international order (LIO), China versus, 14–18, 19, 103, 104
Liu Kegu, 42, 58
local government financial vehicles (LGFVs), 49–54; alternatives to, 64–66; bundled loans and, 52–53; CDB provincial branches and, 57; creditworthiness of, 50; difference from SPV, 49–50; future fiscal revenues used as collateral, 52, 54, 60; nature of debts of, 65–66; purpose to channel CDB capital to public projects, 49, 50f, 51, 164; reregulating and refinancing debts of, 22, 61–64, 135, 137, 165
local governments. See subnational governments
long-term funding from CDB, 19, 29, 37, 59, 71, 74, 76, 101, 155. See also sovereign guarantees
low-income countries. See developing countries; underdeveloped regions

Maritime Silk Road, 69, 90, 151
market actors, 8–9, 39–40, 44, 85, 157
marketization: CBD’s role in, 75, 150; China’s transition to, 7–8, 19, 162–163; difficulties in early 1990s, 44; history of, 8–9, 19, 35, 150; reforms in reaction to Asian financial crisis, 45. See also state-market relations
mercantilist foreign assistance: advanced industrial economies adopting, 124–126, 128–129; China’s lessening reliance on, 18, 160; China’s use of, 12, 73–74, 79, 92, 96, 125, 130, 146, 163, 170; Japan’s use of, 12, 23, 124, 125, 130, 141–142; official aid agencies’ use of, 152
middle-income countries: advanced economies financing in, 128, 129; Brady Plan and Brady bonds to reduce debts of, 136, 138; China’s policy-bank loans to, 110, 118, 139; DFC financing in, 127, 167; IBRD financing in, 120–121; as ODA recipients, 114; official export credits of OECD members to, 109, 132, 167; upper-middle-income countries as OECD members, 107. See also developing countries
Ministry of Commerce (China), 7, 12, 18, 115; Department of Foreign Assistance (MOFCOM), 73, 80–81, 90, 146–147, 157, 158
Ministry of Finance (China, MOF), 24, 27, 34–36, 42; bundled loans, prohibition on, 62; China Exim’s concessional loans funding from, 115; failing projects, policy on, 96, 147; on foreign assistance spending, 72, 72f, 157; government procurement of services, regulation of, 64; at IWG meeting (2012), 130; public-private partnerships, regulation of, 65; as shareholder of policy banks, 85; subsidizing CDB loans, 44–45, 86, 153
Ministry of Finance (Japan), 29, 33, 149
Ministry of Foreign Affairs (China), 7, 70, 73, 81, 91, 157, 158, 164
Ministry of Foreign Affairs (Japan), 83, 114
Ministry of International Trade and Industry (MITI, Japan), 12, 83
moral hazard, 61, 68, 100, 138
Multilateral Debt Relief Initiative, 136
multilateral development banks (MDBs): policy banks compared to, 120–122; private capital mobilized by, 126–127; regional, 120, 125; role of, 4; seniority of creditors and, 134
multilateral development finance institutions: China’s funds to, 3; commodity-backed financing and, 98; construction project finance from, 92, 164; debt forgiveness from, 136; debt surveillance mechanism, 136; former debts impeding ability to borrow for new projects, 101; mercantilist foreign assistance and, 124–125; private capital mobilized by, 127; public-private partnerships favored by, 17; role of, 4; seniority of creditors and, 134. See also multilateral development banks
Multilateral Investment Guarantee Agency (MIGA), 121; IDA-IFC-MIGA Private Sector Window, 125

National Administration of Financial Regulation. See China Banking Regulatory Commission
National Council for Social Security Fund (China), 85–86
National Development and Reform Commission (NDRC, China), 12, 62, 70, 73, 80, 149, 157, 158
national development banks (NDBs), 4; policy banks compared to, 105, 119, 122; reconciling state’s objectives and firms’ business objectives, 140–141; transition to microfinance or SME finance, 127. See also specific countries’ national banks by name
National Finance Work Conference (1993), 28
New Aid Plan (Japan), 141–142
New Development Bank (Shanghai), 3
Nippon Export and Investment Insurance, 83, 107, 108, 143
noninterference principle practiced by China, 133–134
nonperforming loans (NPLs), 44, 45–46, 96, 100, 135, 149, 153, 160, 165–166. See also debt relief and restructuring; sovereign debt relief

OECD (Organization for Economic Cooperation and Development): bilateral aid-giving, 112–118, 123, 128; China’s nonmembership, ramifications of, 104, 130; formation and role, 123–124; Total Official Support for Sustainable Development, 125. See also OECD Development Assistance Committee
OECD countries: credit governance for development finance, 16; debt crisis of developing countries and, 16; export insurance, 78; government revenue inadequate to finance developing countries, 171; income levels of countries receiving export credits, 109, 109f, 132; PFAs’ response to state-or-market dilemma, 141; specific destination countries of official export credits, 109, 110f
OECD Development Assistance Committee (DAC), 15, 105, 112–114; alternative means of development finance adopted by, 128; China not member of, 115; concessional loans and, 124; funding gap for development and, 126; list of member countries’ aid agencies and supervisory ministries, 114, 116–117t; policy banks compared to, 122, 131; regulation of ECAs, 132; Resolution of the Common Aid Effort (1961), 123–124
OECD Export Credit Group (ECG), 105, 107–109, 108t, 122, 128–129, 143, 167
OEEC (Organization for European Economic Cooperation), 123
official development assistance (ODA): advantage created for DAC-regulated aid agencies, 131; China’s 2000–2017 commitment of, 24; China’s compared to Western powers’, 25, 147; concessional role, 124; for construction projects, 92; Japan’s use of, 16–17, 125, 141, 164; OECD’s definition of, 112–114; in postwar decades, 123; recipient list of specific countries, 114, 115f; risk-sharing role of, 126; used as export credits to circumvent 1976 Agreement, 129. See also demarcation issue
overseas development finance, 1–2, 6, 69–101; autonomy of firms in, 80; bank-firm nexus and, 87–100; blacklisting of projects, 80; CBD’s and policy banks’ role, 25, 26f, 74–76, 79–87, 101, 157; characterized as “economic statecraft,” 6–7; China’s advantageous position in winning bids, 2, 19, 71, 102; China’s export credits overlapping with foreign assistance, 128; China’s finance total (2008–2019), 24; China’s lending volume exceeding Western counterparts, 104, 105, 109, 120f, 122, 130; China’s reassessment of risk, 156; commercial banks offering, 23, 76–79; conflicting preferences of state actors in, 9, 79–80, 157; credit enhancement, 97, 158; by different Chinese providers (2004–2014), 25, 26f; export revenues used to repay loans, 97, 98f; financiers of, 71–79, 135, 145, 164; Japan as model, 12, 125; large-scale loans, 75–76, 79, 101, 107, 120; lending gap, China addressing, 70–71, 75, 88, 92–95, 101, 122, 126, 131, 146, 152, 154, 163, 165, 167; MOFA’s role, 81–82; MOFCOM’s role, 80–82; NDRC’s role, 80, 82; regulation and coordination, 80–82; replicating financialization of the state from domestic scenario, 95–100, 157, 164; state’s effect on policy banks’ behavior, 79–87; syndication, 77. See also collateral; construction contractors; debt relief and restructuring; foreign aid or assistance; latecomer status of China; sovereign guarantees; specific projects by name
Overseas Economic Cooperation Fund (Japan), 141, 197n1
Overseas Private Investment Corporation, 126
overspending of host countries. See debt-trap diplomacy; underdeveloped regions, China’s financing projects in

Paris Club, 104, 133–137, 165–166; sovereign debt regime and, 19, 105, 135
People’s Bank of China (PBOC), 27, 32–37, 62
policy banks: advantages of, 19, 71, 87–100, 105, 139; appointment of top-level officials to, 82–85, 83t; boards of directors, 84; comparative lens on, 4–5, 15, 105–122, 140; construction project lending, 92–95, 131; creditors of last resort, loss of status as, 169; DAC-regulated aid agencies similar to, 115; debt-equity swaps, 45–46; development finance role, 25, 121, 139, 163; dual identity of, 3–4, 139, 148, 149–150, 161; establishment of, 27–28; as export credit agencies, 122, 139, 145–146; export finance role, 163; filling lending gap for developing countries, 70–71, 75, 88, 92–95, 101, 122, 131, 146, 154, 163, 165, 167; funding China’s development finance, 25, 157; future path possible for, 145–148, 168–171; heads of, 82–84, 83t; hybrid funding mechanism, 28–31, 31f, 121; lack of transparency, 22, 134; limited data available from, 5, 109, 179nn27–28; local government bonds and, 66, 67f; low-income and middle-income countries as loan recipients, 110; overseas development finance projects funded by, 74–76, 79, 82; overseas lending volume in decline (post-2017), 139, 140f, 160, 169; power of, 84; regions of lending based on different income levels, 110, 112f, 132; regulatory mandates (2017), 152; re-identifying, 160–161; reregulating, 61–68, 137, 148–152, 169; research methods on, 5–6; role of, 3–4, 18, 19, 145–148; shareholding state agencies, 85–87, 101; specific destination countries receiving loans from, 110, 111f; state’s control of overseas development finance, 79–87, 153; structure of liabilities, 25, 26f. See also Agricultural Development Bank of China; China Development Bank; debt-trap diplomacy; demarcation issue; Export-Import Bank of China; future of China’s policy banks; overseas development finance; sovereign guarantees
policy deposits, 26f, 38, 40
policy-oriented finance, 150, 154. See also demarcation issue; official development assistance
Port-Park-City model, 96–97
postal savings: in China, 29, 32, 33, 36; in Japan, 11–12, 152, 178n15
Postal Savings and Remittance Bureau (China), 32
private investors: in advanced industrial economies, 126–127, 143, 149, 167; businesses’ ability to attract capital from, 140–142; DAC donors encouraging financing from, 125; in developing countries, 103, 119, 168; IDA-IFC-MIGA Private Sector Window, 125; IFC role, 121, 126; PFAs struggling to mobilize, 126–128, 143; prioritizing profit-generating projects, 168; public-private partnerships, 17, 64–65
public financial agencies (PFAs): in advanced industrial economies, lending priorities of, 167; China’s policy banks compared with, 4, 15, 104–105, 122; China’s use to finance public projects, 49, 49f; comparative lens on, 105–122, 106f; creditors of last resort, loss of status as, 23; dilemma of, 140–148, 160; direct government subsidization on export and overseas investments, 13, 105; as export credit agencies, 106–112, 115; facilitating industrial catch-up in East Asia, 11; fundraising issues, 28–29, 40; in Germany, 29–30, 30f; in Japan, 11–12, 29, 30f, 141–142; market logic used by China for, 13; private investors, difficulty in mobilization of, 126–128, 143; public projects financed by, 49, 49f, 105; reidentifying role of, 169–170; risk-sharing role of, 126; two approaches as path to going forward, 148–154. See also aid agencies; export credit agencies; multilateral development banks; national development banks
public-private partnerships (PPPs), 17, 64–65, 135, 152

Rajapaksa, Mahinda, 93–94
Reform and Opening Up, 8, 10, 19, 27, 96, 162, 165
revenue-based aid and development finance: China’s withdrawal from, 162; as “gift” from donor country, 124; not available to bail out nonperforming loans, 21, 96; overseas development not dependent on, 71, 72–74; state-led projects, 16, 105, 149, 162; tax-sharing reform, 50–51
risk weighting, 30, 36–38, 148, 151

Shekou model, 96–97
Silk Road Economic Belt, 69, 151
Sinosure (China Export & Credit Insurance Corporation), 77–78, 78f, 87t, 89, 107, 110–112, 113f, 144–145, 144f
small and medium enterprise (SME) finance, 119, 125, 127
Social Security Fund, 38, 85, 86
soft loans, 44–45, 51, 61–64
Southern development finance, 15, 16, 18, 126–128, 168; “Southernization of global development” for both China and the West, 18, 168
South Korea, catch-up industrialization of, 11, 12, 69
sovereign debt relief, 22, 132–138; China’s policy toward, 16, 19, 22, 137, 166; IMF regime, 105, 133; Paris Club and, 133, 166; Western use of, 105, 134, 165, 166; World Bank non-concessional borrowing policy and, 136
sovereign guarantees: bond market, 20, 21, 25, 28, 30, 32, 74, 166, 169; of borrowing (host) countries, 97, 134, 154, 156, 164; CDB bonds, 20, 25, 26, 28, 32, 36, 38–40, 74; ECAs and, 107; KfW bonds, 29–30, 32
sovereign wealth funds, 8, 85, 86
specialized investment companies (SICs), 43–44, 45
special purpose vehicles (SPVs), 48, 48f, 49–50
Sri Lanka: debt restructuring and extension, 137; Muthurajawela Oil Tank Storage Project, 93; Port City Colombo, 94; Ports Authority, 92, 96. See also Hambantota Port financing
State Administration of Foreign Exchange (China), 85
state banks: Big Four as, 27–28; difficulties in early 1990s, 44; emergence of, 7, 85; SOEs as major clients of, 6
State Development and Investment Corporation, 44
state-led China vs. U.S.-led liberal international order, 14–18, 19, 103, 105, 125–126, 162
state-market relations, 2; comparative lens on, 4, 104; means through which state interacts with market, 8; policy banks and, 3, 85–86, 139; state-or-market dilemma, 6–10, 141, 147–149, 152–153, 160, 162
State-Owned Assets Supervision and Administration Commission (SASAC), 6, 55
state-owned commercial banks, 6, 12, 76, 79
state-owned enterprises (SOEs): acting like private entities, 7; CDB relations with, 55, 148; debt-equity swaps and, 46; emergence of, 85; overseas development finance and, 79; state banks and, 6; state relations with, 8, 44, 86
State Planning Commission (SPC), 42–45, 47
stimulus package (2008), 37, 38, 62
subnational governments: bond issuance, 65, 66; Budget Law (1994) cutting off channels for fundraising, 51; CDB’s relationships with, 9, 56–57, 148, 155, 156, 164; collateralizing land and fiscal revenues, 41, 156–157, 164; debt burden of, 21, 41, 58–61; Document No. 43 (2014) severing connection to LGFVs, 63–64; fiscal authority delegated to, 50–51; local government financial vehicles (LGFVs) and, 49–54, 50f, 57, 60–63, 65–66, 165; refinancing nonperforming loans, 61–68, 137
Sulawesi Mining Investment (SMI), 88–89
syndication, 54–55, 67, 77

tax revenues. See revenue-based aid and development finance
tied aid. See mercantilist foreign assistance
trade finance: China’s approach to, 15, 140; development finance vs., 15, 16, 22
Tsingshan Iron & Steel Corporation’s industrial park (Indonesia), 75, 88–91, 101, 131

underdeveloped regions, China’s financing projects in, 22, 70–71, 75, 88, 92, 94–95, 146, 157
United Kingdom foreign aid policies, 114, 125
United States: antagonistic response to China’s unwillingness to cooperate on export credits, 130–131; competing with China in development finance, 10, 14, 125; declining to finance Hambantota Port construction, 93; as IDA contributor, 121
Urban Development Investment Corporation model, 54
urbanization: funding to speed up, 8, 19, 21, 25, 52–54, 58, 61, 68, 75, 100; ghost cities and overinvestment in, 60
U.S. Agency for International Development (USAID), 114, 120f
U.S. Department of State, 114
U.S. Department of the Treasury, 130, 135; zero-coupon bonds, 136
U.S. Exim. See Export-Import Bank of the United States

value-added tax, 51
Venezuela: CDB as financier to, 100; commodity-backed loans in, 88, 97, 156; infrastructure-for-oil model, 5, 98–99

Wallén Package (1987), 129
Wen Jiabao, 37, 93
Western economies. See advanced industrial economies
World Bank/World Bank Group: on Angola Mode, 97; China’s contributions to, 3; establishment and purpose of, 5, 123; finance total (2008–2019), 24; Heavily Indebted Poor Countries Initiative, 136; IDA-IFC-MIGA Private Sector Window, 125; institutional structure of, 120–121; low- and middle-income countries identified by, 114; as multilateral development bank, 120–121; Negative Pledge Clause, 134; non-concessional borrowing policy, 136; policy banks compared to, 120–121; seniority of creditors and, 134; total assets compared to national banks, 120f; on Urban Development Investment Corporation model, 54
World Trade Organization, China’s entry into, 77
Wuhu model of CDB financing, 52–54, 58

Xi Jinping, 69, 90, 156, 170, 171

Yudhoyono, Susilo Bambang, 90

zero-coupon bonds, 136
zero-risk weighting, 30, 36–38, 148, 151
Zhou Xiaochuan, 148–149, 151, 152
Zhu Rongji, 28

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