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The Latecomer’s Rise: Index

The Latecomer’s Rise
Index

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Notes

table of contents
  1. Acknowledgments
  2. List of Abbreviations
  3. Introduction: State Actors, Market Games
  4. 1. Capitalizing Development: From Tax Revenue to Bonds
  5. 2. Debt for Growth?: The Domestic Origin of the Chinese Pathway
  6. 3. Globalizing Late Development: What Makes China’s Industrial Catch-Up Special?
  7. 4. The Latecomer’s Challenge: China and the West
  8. 5. What’s Next?: China’s Development Finance at a Crossroads
  9. Conclusion: Reassessing China’s Rise
  10. Notes
  11. Bibliography
  12. Index

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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