Notes

1 Introduction: The Nature and Scope of China’s Foreign Aid and Investment Diplomacy

1 . Giving financial help to another country or people has a long history. However, its prominence in world politics is recent. A well-known international relations scholar calls foreign aid one of the “real innovations which the modern age has introduced into the practice of foreign policy.” He further states that among current issues, foreign aid has “proven . . . baffling to both understanding and action.” If this writer is to be believed, foreign aid giving is a recent phenom-enon, is poorly defined, and the debate about it often confusing. See Hans Morgenthau, “A Political Theory of Foreign Aid,” American Political Science Review , June 1962, p. 301.

2 . Peter Stephenson, Handbook of World Development: The Guide to Brandt Report (New York: Holmes and Meier Publishers, 1981), p. 6. More specifically aid refers to help given to developing countries, defined as those with a per capita income below a certain level, or funds given to multinational institutions such as the UN Development Program or the World Bank. Export credits are usu-ally defined as foreign aid by the OECD.

3 . See Stephen Browne, Aid and Influence: Do Donors Help or Hinder? (London: Earthscan, 2007), pp. 12–13. The author also discusses such terms as “recipi-ent,” “development,” “nonmilitary,” “concessional,” and “overheads.” For a discussion of the purposes of foreign aid and also debt forgiveness or relief, see Carol Lancaster, Foreign Aid: Diplomacy, Development, Domestic Politics (Chicago, IL: University of Chicago Press, 2007), pp. 12–18 and p. 57. After the Jubilee 2000 campaign and the World Bank encouraging aid giving coun-tries to cancel debts owed by developing countries, debt relief came to be con-sidered as “aid” and was so categorized in many cases.

4 . See John Alexander White, The Politics of Foreign Aid (New York: St. Martins, 1974).

5 . Lawrence Siring, Jack Plano, and Roy Olton, International Relations: A Political Dictionary (Santa Barbara, CA: ABC-CLIO Publishing, 1995), p. 139.

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6 . The United States, the world’s foremost foreign aid giver, has often can-celled aid allocations if the recipient countries became too friendly with the Communist Bloc. Aid was cut completely to Cuba when its government “went communist.” The Hickenlooper Amendment to the US Foreign Assistance Act declared that the United States would not provide aid to countries that had nationalized US property. Other countries have used a variety of reasons for discontinuing aid or not delivering on a certain pledge.

7 . This writer has found that almost all of the scholars writing on the subject count aid this way. More will be said about this later in this chapter and in the following chapters.

8 . For a discussion of the different types of aid, see Jacob J. Kaplan, The Challenge of Foreign Aid (New York: Praeger, 1967), chapter 13.

9 . See Eugene W. Castle, The Great Giveaway: The Reality of Foreign Aid (Chicago, IL: Henry Regnery, 1957). The author notes that in the United States a signifi-cant amount of money and effort is made to “propagandize” foreign aid. See Volume 3, Chapter 1. On the other hand, opinion surveys show there is little public understanding of foreign aid. This works to the advantage of interest groups that favor aid giving. See David A. Baldwin, Foreign Aid and American Foreign Policy: A Documentary Analysis (New York: Praeger, 1966), pp. 4–5.

10 . For a recent discussion on the advantages of both grants and loans, see Sabhayu Bandyopadhyay, Sajal Lahiri, and Javed Younes, “Framing Growth: Aid vs. Foreign Loans,” Federal Reserve Bank of St. Louis, October 2013 (online at research.stlouisfed.org). In recent years there has been some shift among experts back to favoring grants over loans. See Benedict Clements, Sanjeev Gupta, Alexander Pivovarsky, and Erwin R. Tiogson, “Grants versus Loans,” Finance and Development (International Monetary Fund), September 2004 (online at imf.org).

11 . The United States wrote off a number of loans beginning in the 1970s when it became apparent that more aid was required for many poor countries and as international conferences and reviews by Congress embarrassed recipients. Many other Western nations did the same. See Kaplan, The Challenge of Foreign Aid, pp. 316–18.

12 . John D. Montgomery, Foreign Aid in International Politics (Englewood Cliffs, NJ: Prentice Hall, 1967), p. 34.

13 . Browne, Aid and Influence, p. 5. 14 . This is a view commonly espoused by Communist nations for ideological rea-

sons. This point will be discussed further ahead. However, Communist Bloc countries, especially after they were in the aid business for a short time, gave much of their aid as loans. There, of course, have been Western advocates of gift aid as opposed to loans.

15 . For discussion on this point, see George Liska, The New Statecraft: Foreign Aid in American Foreign Policy (Chicago: University of Chicago Press, 1960), p. 6. The original argument comes from Lenin’s Imperialism: The Highest Stage of Capitalism. Also see Judith Hart, Aid and Liberation: A Socialist Study of Aid Policies (London: Victor Gollangz, 1973), chapters 8 and 9.

Notes ● 171

16 . There is a visible tendency for nations that lack natural resources to try to gain guaranteed sources. Japan is a case in point. See Robert M. Orr Jr. and Bruce M. Koppel, “A Donor of Consequence: Japan as a Foreign Aid Power,” in Bruce M. Koppel and Robert M. Orr Jr. (eds.), Japan’s Foreign Aid: Power and Policy in a New Era (Boulder, CO: Westview Press, 1993), p. 2.

17 . See Teresa Hayter, Aid as Imperialism (New York: Pelican, 1971). 18 . Rostow argues that economic development occurs in stages and that aid can be

essential in helping a developing country move from one stage to another. See W. W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (London: Cambridge University Press, 1960).

19 . Lloyd D. Black, The Strategy of Foreign Aid (Princeton, NJ: D. Van Nostrand, 1968), pp. 14–15.

20 . Western countries, especially the United States, have given considerable food aid to poor countries while at the same time encouraging them to improve their agricultural sectors. This seems a contradiction since a lot of poor nations needed food and the United States had a surplus.

21 . Thus there is a dichotomy between “project aid” and other aid that has been used by writers on the subject.

22 . The United States moved to giving more tied aid due to a balance of pay-ments problem in the 1960s. See Robert E. Asher, Development Assistance in the Seventies: Alternatives for the United States (Washington, DC: Brookings, 1970), p. 200.

23 . See Kaplan, The Challenge of Foreign Aid , pp. 341–71 for a discussion of what multilateral aid is and the problems associated with it. By the late 1960s, 20 percent of aid from Western countries was given through multilateral insti-tutions. Also see Black, The Strategy of Foreign Aid , p. 3.

24 . Browne, Aid and Influence, p. 12. 25 . See Denis Goulet and Michael Hudson, The Myth of Aid (Maryknoll, NY:

Orbis Books, 1971), p. 106, 117 and 258–59. The authors note that World Bank and International Monetary Fund are status quo oriented and thus dis-courage institutional change. They also note that much international insti-tution aid is tied aid, generally to improve governance, the rule of law, and human rights.

26 . This has been the case of most Communist nations’ aid not only because they did not want to forsake the political influence that aid provided, but also because they gave foreign aid largely for ideological reasons. For details, see Kurt Muller, The Foreign Aid Programs of the Soviet Bloc and Communist China: An Analysis (New York: Walker and Company, 1964).

27 . Some writers, in fact, prefer the term “security assistance” to include both economic and military assistance. In the case of the United States, when aid proposals are made in Congress, security is generally used as justification. See Max F. Millikan, “The Political Case for Economic Development Aid,” in Robert A. Goldwin (ed.), Why Foreign Aid? (Chicago, IL: Rand McNally, 1962), pp. 90–91. It is worth mentioning here, given that this book is about China’s aid, that US aid to Taiwan from 1950 to the mid-1960s was given

172 ● Notes

largely in the form of military aid—around 60 percent—and Taiwan was one of the big success stories of American aid producing economic growth and democracy. See H.Y. Wen, Behind Taiwan’s Economic Miracle: A Political and Economic Analysis of the US Aid Experience in Taiwan (Taipei: Tsu-Li Wan-Pao, 1990).

28 . Giving a nation military assistance also frees much of its budget for other purposes—often for economic development. Likewise “economic aid” is often funneled to the military to pay the military budget or buy more weapons.

29 . See Kaplan, The Challenge of Foreign Aid, p. 283 for more details on this issue.

30 . Black, The Strategy of Foreign Aid , p. 86. The author notes that “economic and military aid are merely two different ways of achieving the same objective.”

31 . Kaplan, The Challenge of Foreign Aid , pp. 282–83. 32 . This point will be discussed at length in subsequent chapters. 33 . Landrum R. Bolling with Craig Smith, Private Foreign Aid: U.S. Philanthropy

for Relief and Development (Boulder, CO: Westview Press, 1982). 34 . For a definition of technical aid, see Maurice Domergue, Technical Assistance:

Theory, Practice and Policies (New York: Praeger, 1968), p. 5. 35 . Black , The Strategy of Foreign Aid , pp. 125–26. 36 . See Lauchlin Currie, The Role of Advisors in Developing Countries (Westport,

CT: Greenwood, 1981), pp. 4–5. 37 . See Index of Global Philanthropy and Remittances 2009 (Washington, DC:

Hudson Institute Center for Global Prosperity, 2009). 38 . Ibid., p. 16 and 18. It is estimated that remittances totaled $316 billion in

2009. See “Remittances,” Economist , December 18, 2010, p. 185. The World Bank made the estimate.

39 . See International Development Strategy for the Second United Nations Development Decade, UN General Assembly Resolution 2626 (XXV), October 24, 1970, p. 43. This refers to aid broadly; 0.7 percent is the guideline for developmental aid. In a recent OECD report (2007), the United States ranks below 17 European nations plus Canada, Australia, New Zealand, and Japan in this respect. See Development Cooperation Report , 2009 (Paris: OECD, 2007). The United Council of Churches recommended the 1 percent figure, which evolved into 0.7 percent target used by the United Nations in the 1960s. See Lancaster, Foreign Aid , p. 37l.

40 . See Organization for Economic Development and Cooperation Development Statistics Online (viewed April 13, 2009). One reason US aid is lower in terms of its percent of the gross national product is that the United States has much higher defense spending (in percent terms), and much of its aid is given as military assistance, which comes from the Department of Defense budget. A second reason is that the United States gives much aid through private char-itable and other organizations. According to the American Association for Fundraising Counsel, the United Kingdom, one of the top nations in the world in charitable giving, extended 0.8 percent of its GDP in this form of aid in 2003. The United States, by comparison, gave 2.2 percent. See Bruce Bartlett,

Notes ● 173

“A ‘Stingy’ U.S.? Hardly,” Christian Science Monitor , January 5, 2005 (online at www.csmonitor.com ). Recently US private aid has exceeded official aid by a considerable amount. See Carol Adelman, “The Privatization of Foreign Aid: Reassessing National Largesse,” Foreign Affairs , November-December 2003, pp. 9–14. In 2007, according to the OECD, the United States gave more in charitable aid or philanthropy than it gave in official development assistance: $36.9 billion compared to $21.8 billion.

41 . Browne, Aid and Influence , p. 29. 42 . Ibid., pp. 28–29. 43 . Development economists feel market access is very beneficial to developing

countries that have some industries that can export. 44 . Detailed Benchmark Definition of Foreign Direct Investment (third edition)

(Paris: Organization for Economic Cooperation and Development, 1966). 45 . Leer Hudson Teslik, “Sovereign Wealth Funds,” Backgrounder (Council on

Foreign Relations), January 18, 2008, p. 1 (online at cfr.org/publications/15251).

46 . See Robert M. Kimmitt, “Public Footprints in Private Markets: Sovereign Wealth Funds and the World Economy,” Foreign Affairs , January/February 2008.

47 . Tatuyana P. Soubbotina and Katherine A. Sheram, Beyond Economic Growth: An Introduction to Sustainable Development (Washington, DC: The World Bank, 2004), chapter 13.

48 . Mikayla Wicks, “Foreign Direct Investment versus Official Development Assistance: The Battle Is On,” Building Blogs, May 17, 2012 (online at build-ingblogs.org).

49 . “Foreign Direct Investment,” Economist , June 29, 2013, p. 85. 50 . It needs to be noted that Chinese writers assessing its aid giving cite other

periods. Yuan Wu, for example, speaks of the first phase from 1956 to 1978. See Yuan Wu, “ China and Africa (Beijing: International Press, 2006). Another author says the first period is from 1950 to 1974. See Li Xiaoyun, “China’s Foreign Aid and Aid to Africa: Overview” (slide presentation), cited in David H. Shinn and Joshua Eisenman, China and Africa: A Century of Engagement (Philadelphia: University of Pennsylvania Press, 2012), p. 144. Other writers use still other periodizations. Some speak of three periods. One writer cites 1992, when China instituted deeper reforms and the economy did much bet-ter, as a turning point. This categorization will be discussed in greater detail in the following pages. This writer believes that 1992 did not constitute a real transition in China’s aid giving; rather 2005 showed a marked increase in China’s aid giving because Chinese leaders recognized at this time that they had an excess of foreign exchange, though one can say that this realization happened gradually.

51 . Details on this are provided in Volume 2, Chapter 1. 52 . Shino Watanabe, “China’s Foreign Aid,” in Hyo-sook Kim and David

M. Potter (eds.), Foreign Aid Competition in Northeast Asia (Sterling, VA: Kumarian Press, 2012), p. 61.

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53 . Three-quarters of Soviet aid went to other Communist countries, most of it to countries that China also aided. See Lancaster, Foreign Aid , p. 32.

54 . China, of course, remained a poor country by many standard definitions, or at least much of China was poor. What is meant by calling China a “less than poor” or “rich” country is discussed in Volume 1, Chapter 3 .

55 . Probably most of China’s military aid was delivered. See John F. Copper, “China’s Military Assistance,” in John F. Copper and Daniel S. Papp (eds.), Communist Nations’ Military Assistance (Boulder, CO: Westview Press, 1983), pp, 96–134. China’s arms aid to non-Communist countries was usually quite visible. It was less so to Communist countries.

56 . See Peter Van Ness, Revolution and Chinese Foreign Policy: Peking’s Support for Wars of National Liberation (Berkeley: University of California Press, 1970), p. 164. The author notes that many of the biggest recipients of US aid were China’s “targets of revolution.” China also made aid commitments to nations where there was no liberation struggle apparent but the nations were unstable and/or where the leadership or the politics in those countries often changed quickly and dramatically.

57 . This point will be discussed in later chapters. Suffice it to say here that China did classify information about its aid giving and most officials considered it secret information.

58 . See Teh-chang Lin, “Problems in the Study of Beijing’s Foreign Aid,” Issues and Studies , July 1995, pp. 66–78.

59 . See, for example, Bruce Vaugh, Thomas Lum, and Wayne Morrison, “Southeast Asia,” in China’s Foreign Policy and “Soft Power” in South America, Asia, and Africa (Washington, DC: U.S. Government Printing Office, 2008), p. 97. China not delivering promised aid is mentioned on a number of occa-sions in subsequent chapters.

60 . One author calculates that of the aid China gave from 1956 to 1973, 47 percent was not used as of December 1973. See Wolfgang Bartke, China’s Economic Aid (New York: Holmes and Meier, 1975), pp. 10–11. For an alternative view on this matter, see Janos Horvath, Chinese Technology Transfer to the Third World: A Grants Economy Analysis (New York: Praeger, 1976), pp. 22–23. Horvath states that delays between China’s aid commitments and deliveries are considerable, but this does not matter, or should not be seen as a major issue, as repayment of Chinese loans is also delayed. Also see Sidney Klein, Politics versus Economics: The Foreign Trade and Aid Policies of China (Hong Kong: International Studies Group, 1968), p. 16. The author notes that it took China four years to build a cement factory in Cambodia and that aid to a number of other countries was not disbursed on schedule. It is also worth noting that China suffered from serious economic dislocation and a drop in the gross national product after the Great Leap Forward launched in 1958 and economic and political disruption as a result of the Cultural Revolution that started in 1966. Both had impacts for several years.

61 . The Aid Programme of China (Paris: Organization for Economic Co-operation and Development, 1987), p. 5. According to this report, up to 1985 China

Notes ● 175

had pledged a total of $9.3 billion in bilateral aid to developing countries (not including Communist Bloc nations) and $7.2 of this had been disbursed. Also see Kurt Muller, The Foreign Aid Programs of the Soviet Bloc and Communist China: An Analysis (New York: Walker and Company, 1964), p. 234 and Thomas Lum, Hanna Fischer, Julissa Gomez-Granger, and Anne Leland, “China’s Foreign Aid Activities in Africa, Latin America, and Southeast Asia,” Congressional Research Service, February 25, 2009, Summary. The authors note that not only have some loans and pledges not been fulfilled but a number of projects may have been counted more than once.

62 . For instances of this, see Copper, China’s Foreign Aid, pp. 34–35, 46–48, 56–58.

63 . Ibid., pp. 136–37. For a different view, see Bartke, China’s Economic Aid , p. 11. Bartke calculates that less than 10 percent of China’s aid was in grants during the period 1956 to 1963. This writer believes that his lower figure is explained by the fact Bartke did not count China’s aid to North Korea or North Vietnam, which it might be presumed he defines as military aid. This writer does not agree with that distinction and thus assumes a larger percent-age of grants. Horvath, for example, states that the grant factor in China’s aid is “second to none.” See Horvath, Chinese Technology Transfer to the Third World , p. 1. He asserts that the grant factor in China’s aid was between 0.70 and 0.80 (meaning that between 70 percent and 80 percent of the face value of the aid was grants, or free aid). He states that only Canada matched China in this respect. See p. 84.

64 . Ku I-chi, “The Foreign Aid of U.S. Imperialism,” Peking Review , July 14, 1959, p. 6; Chin Yi-woo, “China’s Economic and Technical Cooperation with Friendly Countries,” Peking Review , October 25, 1974. Another writer states that China viewed Western aid as characterized by domination, suppression, plunder, and imperialism. See Law Fai Yu, Chinese Foreign Aid: A Study of Its Nature and Goals with Particular Reverence to the Foreign Policy and World View of the People’s Republic of China, 1952–1982 (Saarbrucken, Germany: Verlag Breitenbach, 1984), p. 41.

65 . Zhao Guanhua, who later became China’s foreign minister, at a UN meet-ing in November 1971, said humbly that: “With a population of 700 million, China ought to make a greater contribution to human progress. And we hope that this situation of our ability falling short of this wish of ours will be grad-ually changed.” See Irresistible Historical Trend (Peking: Foreign Languages Press, 1971), pp. 4–15, cited in Alan Lawrance, China’s Foreign Relations since 1949 (London: Routledge and Kegan Paul, 1975), p. 218. An official Chinese publication later described China’s aid this way: “Abiding by Chairman Mao’s teachings, Chinese aid personnel have travelled thousands of miles to help the people of other countries in their construction. . . . Defying hardships and fatigue, they persist in a style of hard work and simple living, and share wealth and woe with the working people of other countries.” See “Wholeheartedly Serving the People of the World: Chinese Aid Personnel Abroad,” Peking Review , March 15, 1998, p. 32.

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66 . Copper, China’s Foreign Aid , p. 137. 67 . One could argue that this policy reflected the fact China did not have enough

funds to compete with Western or even Soviet aid, and thus it was a rational-ization. Yet it does have a background. During World War II, Mao fought the Japanese without outside help and spoke of self-reliance being a policy. Mao later noted that encouraging aid recipients to be self-reliant meant that they relied on their own resources (including human resources) and staved off the threat of imperialism. See Law, Chinese Foreign Aid , pp. 45–46. It is also worth noting here that the fourth of the eight principles of China’s foreign aid by Zhou Enlai in 1964 cited self-reliance.

68 . See Tseng Yun, “How China Carries out the Policy of Self-Reliance,” in Weinberg Chai (ed.), The Foreign Relations of the People’s Republic of China (New York: Putnam, 1971), pp. 226–31. One author, however, suggests that China promoted self-reliance so that these countries could become closer to China. See Garon Hydlen and Rwekaza Mukandala (ed.), Agencies in Foreign Aid: Comparing China, Sweden and the United States (New York: St. Martin’s Press, 1999), p. 157.

69 . This is certainly the case if one takes into account the grant factor in China’s loans and the fact it cancelled or forgave many of them. Only 8.9 percent were interest-bearing loans and the interest China charged on its loans ranged from 2 to 2.5 percent. See Muller, The Foreign Aid Programs of the Soviet Bloc and Communist China , p.234.

70 . Ibid. Also see Klein, Politics versus Economics , p. 15. 71 . Klein, Politics versus Economics, p. 16. 72 . See Horvath, Chinese Technology Transfer to the Third World , chapter 4.

Horvath provides a highly analytic presentation of the grant factor in China’s aid loans, noting that it differs considerably from that of other countries). China gave the most generous aid, he notes, to poor countries. China’s most generous aid in terms of the grant factor went to Bangladesh, Mali, Laos, Congo, Cambodia, Kenya, Uganda, Niger, Upper Volta, and Mauritania respectively. See pp. 53–54. Also see Bartke, China’s Economic Aid , p. 9. Both of the writers are speaking of China’s aid during phase one, up to around 1975.

73 . The US Central Intelligence Agency reported in the mid-1970s that China’s aid program was the most concessionary of all the Communist nations’ aid programs. See Communist Aid to the Less Developed Countries of the Free World, 1976 (report ER 77–10296), August 1977, p. 5.

74 . See Carol H. Fogarty, “China’s Economic Relations with the Third World,” in China: A Reassessment of the Economy (Washington, DC: Government Printing Office, 1975), p. 732. The Joint Economic Committee of the US Congress undertook this study. The author in this study compares China’s economic aid to poor countries with the aid given by other Communist coun-tries. This author believes that by including China’s military aid to North Korea, North Vietnam, and Albania and given the risk factor in China’s aid

Notes ● 177

(meaning the considerable instability in recipient countries and their difficul-ties in repayment) the picture is different. This point will be discussed further in following pages.

75 . See Vivian Foster, William Butterfield, Chuan Chen, and Nataliya Pushak, Building Bridges: China’s Growing Role as Infrastructure Financier for Africa (Washington, DC: World Bank, 2008), pp. 47–48.

76 . One author notes that China was “not only the poorest country in the world to provide aid, but its aid was the highest ever given as a percentage of the donor country’s per capital income . . . and . . . often went to countries with a standard of living much higher than itself.” See Jung Chang and Jon Halliday, Mao: the Unknown Story (New York: Alfred A. Knopf, 2005), p. 461. Also see Copper, China Foreign Aid , pp. 2–4 for further discussion of this matter.

77 . Shuaihua Cheng, Ting Fang, and Hui-ting Lien, “China’s International Aid Policy and Its Implications for Global Governance,” RCCPVB Working Paper (Research Center for Chinese Politics and Business, Indiana University), June 2012.

78 . See Table 1.1 in Copper, China’s Foreign Aid , p. 2. 79 . Chang and Halliday, Mao: The Unknown Story , p. 586. US charitable giving

and giving access to its market are not counted here. Neither was its aid given through international aid agencies.

80 . A few writers, however, observed that China, like other aid-giving countries, gives aid mainly to attain political objectives. See A. Doak Barnett, Communist China and Asia: A Challenge to the United States (New York: Vintage Books, 1960), p. 244.

81 . One of the reasons China moved to giving aid more in the form of loans was that it wanted to aid more countries at the time of the second Afro-Asian Conference in 1965 and was in a contest with the Soviet Union for winning votes. One writer notes that China made the decision to shift more of its for-eign aid to loans in 1957, when its aid program was more firmly established. See Klein, Politics versus Economics, p. 14.

82 . Horvath, Chinese Technology Transfer to the Third World , p. 1. The author states the grant factor on China’s loans was 76 percent from 1957 to 1974.

83 . Jianwei Wang, “China’s New Frontier Diplomacy,” in Sujian Guo and Jean-Marc F. Blanchard (eds.), “Harmonious World” and China’s New Foreign Policy (Lanham, MD: Lexington Books, 2008), p. 32. The author uses the term “debt” rather than aid though.

84 . Bartke, China’s Economic Aid , p. 12. The author notes that in the case of Western aid half of the cost is in wages and salaries. Also see The Aid Programme of China , p. 7. It is interesting to note in this connection that an official Chinese publication stated that China’s loans were all without inter-est. See Zhongguo dwuwai jingji jishu yuanzhu (China’s foreign economic and technical aid) (Beijing: Ministry of Foreign Trade and Technical Cooperation, 1985), p.20. This was obviously not true as will be seen in following chapters where Chinese announcements of aid mention the rate of interest.

178 ● Notes

85 . Chinese loans could not reasonably be repaid in foreign currencies or gold and usually weren’t. See Klein, Politics versus Economics , p. 14.

86 . Copper, China’s Foreign Aid , p. 137. 87 . The Tan-Zam Railroad was built by China in East Africa. It was a very big

project and one that Western and international agencies turned down as not feasible. This project will be discussed in following chapters.

88 . Lawrance, China’s Foreign Relations since 1949 , p. 218. 89 . Copper, China’s Foreign Aid , pp. 14–18; Klein, Politics versus Economics ,

p. 14. 90 . Ibid., p. 17 and 140. 91 . Lawrance, China’s Foreign Relations since 1949 , p. 2. 92 . This was enshrined in China’s “Eight Principles of China’s Aid to Foreign

Countries.” The criticism of China about its aid personnel and workers was that they remained away, and segregated, from the local population. This was, and is, often heard in African countries.

93 . Gail A. Edie and Denise M. Grissell, “China’s Foreign Aid, 1975–78,” China Quarterly , March 1979, p. 216. For a detailed description of China’s aid proj-ects, see Bartke, China’s Economic Aid , pp. 75–215.

94 . Carol Fogarty, “Chinese Relations with the Third World,” in Chinese Economy Post-Mao (Washington, DC: Joint Economic Committee of Congress, 1978), pp. 851–59.

95 . Law, Chinese Foreign Aid , p. 212. 96 . Teh-chang Lin, “Beijing’s Foreign Aid Policy in the 1990s,” p. 42. 97 . This would have to be the case; alternatively China promised a large number

of projects and actually delivered only a few of them. Lin cites an average of 36 projects completed annually between 1979 and 1983 and about the same number finished in the following years up to 1993. See “Beijing’s Foreign Aid Policy in the 1990s,” p. 39.

98 . “Chinese Assistance to Third World,” Beijing Review , March 2, 1987, pp. 29–30. This source mentioned 222 projects this year, 13 of which were new, 100 technological and managerial cooperation projects and 50 others. The definition of project here was very unclear. According to a Chinese offi-cial, China has completed 1,554 projects. See “China to Further Economic and Trade Cooperation with the World,” Shijie Zhishi, September 16, 1999 (translated by FBIS September 16, 1999 #SK3011095899).

99 . Zhongguo Jingji Nianjian (Almanac of China’s Economy) (Beijing: 1981), pp. iv and 134–37. No definition of “project” was provided.

100 . Xinwen Bao (Journalism Paper), February 15, 1990, cited in “Foreign Countries Aid by China,” Beijing Review , May 14–20, 1990, p. 33. This data, it needs to be noted, is not consistent with other information provided by official Chinese sources.

101 . See Lawrance, China’s Foreign Relations since 1949 , p. 153 for phase two aid. Also see Gregory T. Chin and B. Michael Frolic, Emerging Donors in International Development Assistance: The China Case , International Development Research Centre (Canada), December 2007, p. 2.

Notes ● 179

102 . Klein, Politics versus Economics , p. 15. There were, of course, many notable exceptions as will be seen in later chapters. Also these show projects got more notice in the Western media.

103 . According to an official Chinese source, between 1963 and 1983 China sent 6,500 doctors to 43 Asian and African countries. As of 1983 there were 35 med-ical teams comprising 1,100 personnel working in 80 centers in 35 countries. See Li Ke, “China’s Aid to Foreign Countries,” Beijing Review , September 5, 1983, p. 16. Later, in 1990, it was reported that China had sent some 10,000 medical personnel to 60 countries and had contracted to build 30 projects. See Li Ming, “China’s International Health Technology Cooperation,” Beijing Review , January 15–21, 1990, p. 43.

104 . Klein, Politics versus Economics , p. 15. 105 . Ibid. The author notes that, in contrast, the Soviet Union often sent more

technicians and charged for that. 106 . Copper, China’s Foreign Aid , p. 16. 107 . Xinwen Bao (Journalism Paper), February 15, 1990, cited in “Foreign Countries

Aid by China,” Beijing Review , May 14–20, 1990, p. 33. 108 . Zhang Haibing, “China’s Aid to Southeast Asia,” in Saw Swee-Hock (ed.),

ASEAN-China Economic Relations (Singapore: Institute of Southeast Asian Studies, 2007), p. 257.

109 . Thomas Lum, Christopher M. Blanchard, Nicolas Cook, Kerry Tombaugh, Susan B. Epstein, Shirley A. Kan, Michael F. Martin, Wayne M. Morrison, Dick Nanto, Jim Nichol, Jeremy M. Sharp, Mark P. Sullivan, Bruce Vaughn, and Thomas Coipuram Jr., “Comparing Global Influence: China’s and U.S. Diplomacy, Foreign Aid, Trade, and Investment in the Developing World,” Congressional Research Service, August 15, 2008, pp. 33–34. Many of these issues are also discussed in Copper, China’s Foreign Aid.

110 . See Yong Deng, “Conception of National Interests: Realpolitik, Liberal Dilemma, and the Possibility of Change,” in Yong Deng and Fei-ling Wang (eds.), In the Eyes of the Dragon: China Views the World (Lanham, MD: Rowman and Littlefield, 1999), pp. 47–72; Thomas J. Christensen, “Chinese Realpolitik,” Foreign Affairs , September/October 1996, pp. 37–52.

111 . Edie and Grisnell, “China’s Foreign Aid, 1975–78,” p. 216. 112 . China donated funds to the United Nations Industrial Development

Organization (UNIDO) beginning in 1971, amounting to slightly more than US$ 200,000 annually. China was a member of UNIDO before it was admit-ted to the UN and its goals seemed to fit China’s notion that underdevel-oped nations should industrialize in order to escape dependency on Western industrial countries. China also gave a modest amount of money to the UN Development Program beginning in 1973—around US$ 2 million annually. For details, see Samuel S. Kim, China, the United Nations, and World Order (Princeton, NJ: Princeton University Press, 1979), pp. 308–11 and 324–26. Kim notes that China told the UN not to expect much help in it giving mul-tilateral aid. It is worth noting in this connection that China has been critical of United Nations aid, saying that the salaries of UN experts in the field are

180 ● Notes

exorbitant and that the UN Development Program helps Western field experts more than poor countries. China even refused to get involved in some projects because it had pledged in its Eight Principles that its workers adopt the liv-ing standards of the people in the localities where they work. In the 1980s, China’s policy in this regard shifted a bit. According to the OECD, China had provided $300 million to multilateral organizations up to 1985. See The Aid Programme of China , p. 6.

113 . It needs to be noted that charity organizations did not find an important place in China as in Western countries. During the Mao period the government took responsibility for helping the poor and doing social tasks as well as what is called “charity work” in the West. Thus charities were not considered neces-sary and were to some degree seen as present in the West due to the predatory nature of capitalism. During the Deng era most Chinese saw charity work, as in most other countries, as undesirable because it undermined the family and resulted in added costs to government, which then made China less compet-itive in world trade. It is also worth noting that in countries with a Buddhist religion or background, asking for charity was to be left to monks and help to the less fortunate was seen as wrong because they were seen as having to pay for wrongdoing in a previous life and suffering, considered as necessary, would lead to a better life in their next incarnation.

114 . For information and data on China’s early emergency aid, see Copper, China’s Foreign Aid , pp. 16, 50,95,98,102,109, 145.

115 . However, in 1964, in the context of experiencing economic difficulties, Premier Zhou Enlai did say that China’s foreign aid should be at least 3 per-cent of the state budget. He later said that he would “like to see” 3 percent of foreign exchange earmarked for foreign aid. See Shu Gang Zhang, “Beijing’s Aid to Hanoi and the United States-China Confrontations, 1964–1968,” in Priscilla Roberts (ed.), Behind the Bamboo Curtain: China, Vietnam and the World Beyond (Washington, DC: Woodrow Wilson Center Press, 2006), p. 264.

116 . Chin and Frolic, Emerging Donors in International Development Assistance: The China Case , p. 4.

117 . See ibid, p. 13 and p. 94, for the context in which the principles were announced.

118 . However, there was mention of the eight points in the Chinese media. For example, see Ai Ching-chu, “China’s Economic and Technical Aid to other Countries,” Peking Review, August 21, 1964 published a few months after they were announced, and Chin Yi-wu, “China’s Economic and Technical Cooperation with Friendly Countries,” Peking Review, October 25, 1974, ten years later.

119 . See, for example, “Zhou Enlai Announces Eight Principles of Aid,” China Daily , June 17, 2014 (online at chinadaily.com.cn).

120 . One source notes that it was stated at this time that in 1960 a “spree of gifts by Mao coincided with the worst years of the greatest famine in history.

Notes ● 181

Over 22 million people died of starvation in 1960 alone.” See Chang and Halliday, Mao: The Unknown Story , p. 461.

121 . See Zhimin Lin, “China’s Third World Policy,” in Yufan Hao and Guiyang Huan (eds.), The Chinese View of the World (New York: Pantheon Books, 1989), p. 243.

122 . “Zhao Ziyang’s Four Principles of Economic and Technological Cooperation,” Beijing Review, January 24, 1983, p 19.

123 . Chinese leaders seemed to have made the decision at this time to receive aid and loans in large quantities. The vice chairman of the State Planning Commission said in 1980 that China planned to borrow as much as $20 bil-lion by 1985. See Times, February 8, 1980, cited in Copper, China’s Foreign Aid in 1979–80 , p. 1. Also see John F. Copper, China’s Foreign Aid in 1979–80 (Baltimore: University of Maryland School of Law 1981), pp. 1–3.

124 . In the next decade China received $7.5 billion—around $400 million in gratis aid, the rest of it in loans. See “China’s Foreign Trade in the Past 40 Years,” Beijing Review , October 2–8, 1989, p. 11, and World Development Report (New York: Oxford University Press, 1990), p. 216. This study was published for the World Bank. Later China, of course, received much more. For details on the decisions to seek foreign financial aid and investment money, see Vogel, Deng Xiaoping, pp. 224–27.

125 . World Development Report 1991: The Challenge of Development (New York: Oxford University Press, 1991), p. 242.

126 . Li, “China’s Aid to Foreign Countries,” p. 14. 127 . Sam S. Kim, “Mainland China and a New World Order,” Issues and Studies ,

November 1991, p. 19. 128 . Ibid. Further details on China’s termination of aid to these countries are pro-

vided in subsequent chapters. 129 . See John F. Copper, “China’s Foreign Aid in 1977,” Current Scene , August-

September 1978, pp. The Tan-Zam Railroad was finished at this time. Another reason for China’s official aid indicating a low amount may be that it did not want to make known its aid to Cambodia in view of world attention focusing on that country’s violation of human rights record at the time.

130 . Copper, China’s Foreign Aid in 1979–80 , p. 7. 131 . See ibid., pp. 1–4. 132 . Anne Gils and Gerald Segal, China and the Arms Trade (New York: St. Martin’s

Press, 1985), p. 27. 133 . See centerfold in Jane’s Defense Weekly , November 14, 1984. 134 . Copper, China’s Foreign Aid in 1979–80 , p. 5. 135 . Ibid., pp. 4–6. China provided donations to a dozen UN affiliated organiza-

tions in 1980, totaling more than $5 million. See Table 8, pp. 42–43 in this publication. According to a Chinese source, up to 1998 China had sent 16,000 medical workers to more than 60 countries, mostly in Africa and South Asia, 39 having died in the field. See “China to Continue Medical Aid Abroad,” Beijing Review, April 20–26, 1998, p. 6.

182 ● Notes

136 . In 1982, Deng Xiaoping announced China’s policy of South-South coopera-tion. The tenets of this policy were almost identical to those of China’s for-eign aid. Thus it appeared that Deng intended that aid would again become a major element of China’s foreign policy when China became economically more prosperous.

137 . See “Egalitarianism Is Not Sun-Light,” Beijing Review , May 14–20, 1990, p. 33 and Arthur Lewis Rosenbaum, “Introduction,” in Arthur Lewis Rosenbaum (ed.), State and Society in China: The Consequences of Reform (Boulder, CO: Westview Press, 1992), p. 12.

138 . The “red versus expert” question had long been a pervasive one in China. During the Mao era being red was more important; now it was being expert.

139 . During the Mao era model Communists were praised. The Dazai commune, where commitment to Mao was prominent, was made to emulate. After Mao died it was disclosed that Dazai had been successful largely because of the continual infusions of state money and various kinds of other support.

140 . For an assessment of the application of these new ideas (ideology) in African countries, see Deborah Brautigam, Chinese Aid and African Development: Exporting Green Revolution (New York: St. Martin’s Press, 1998), pp. 175–95.

141 . Zoo Chunyi, “Wu Yi on Reforming Foreign Assistance Programs,” Xinhua Domestic Service, October 17, 1995 (FBIS Document ID FTS 1995510170006000).

142 . “Relay of State Council Directive for Implementation and Further Reform of Foreign Aid Work,” Gouge Shangbao , June 17, 1995 (Foreign Broadcasting Information Service, or FBIS, Document ID FTS 19950617000048), and Si Liang, “Special Article: China’s Two Forms of Aiding Foreign Countries, Zhongguo Tongxuen She, May 8,1996 (FBIS Document ID FTS 19960508000027).

143 . A number of observers have noted this about China’s aid to specific areas and countries. For example, one writer says the line between China’s aid and its foreign investments in Latin America is a “fine one.” See David Shambaugh, “Beijing’s Thrust into Latin America,” International Herald Tribune , November 20, 2008 (online at iht.com). Rules were made govern-ing sovereign wealth funds (called the Santiago Principles), but compliance was voluntary. China has been fairly transparent about not distinguishing between foreign aid and foreign investments; apparently Beijing was not con-cerned that Western countries might complain that China was not abiding by the standard definitions of each. It has also worked with other sovereign wealth funds to weaken criticism that might arise when it makes controver-sial purchases. See “Cash in Hand,” Economist , June 19, 2010, p. 76. For the view that China deliberately blurred the line between aid and investments, see David Shambaugh, China Goes Global: The Partial Power (Oxford: Oxford University Press, 2013), p. 202.

144 . Also the Exim Bank did not want to be seen as risking or trying to gain control over foreign affiliates.

145 . Shambaugh, China Goes Global , p. 177.

Notes ● 183

146 . Yevgeniya Korniyanko and Toshiaki Sakatsuma, “China’s Investments in Transitional Countries,” European Bank for Reconstruction and Development (Working Paper), January 2009 (online at ebrd.com).

147 . Ibid. 148 . Peter Nolan, Is China Buying the World? (Cambridge: Polity Press, 2012). 149 . Vivien Foster, William Butterfield, Chuan Chen, and Nataliya Pushak,

Building Bridges: China’s Growing Role as Infrastructure Financier for Sub-Saharan Africa (Washington, DC: The World Bank, 2009), p. xvii and p. 7. China’s investments are more concessional than private investments by a con-siderable amount, but do not meet the 35 percent (initially and not factoring in debt forgiveness) that Western official investments carry.

150 . Obviously many of China’s investments, especially for projects in countries that are unstable or experience conflicts or civil wars, cannot and will not be repaid. Some very large investments in some Middle East countries have been written off. This point is discussed further in subsequent chapters.

151 . One might say, however, that this was offset by remittances Chinese work-ers abroad were making back to their families, though most of it was the product of their working on Chinese aid and investment products abroad. See “Remittances,” Economist , November 13, 2010, p. 114. The amount was slightly below $50 billion in 2009 and over $50 billion in 2010.

152 . See, for example, see Li Shenming, “Foreign Aid and International Relations: Foreign Aid Is an Extension of Domestic Politics and an Instrument for Implementing Foreign Policy,” People’s Daily , June 17, 2002 (Translated by FBIS Document ID: CPP2002061700060). Li was vice president of the Chinese Academy of Social Science.

153 . See “”Zero Tariffs to Aid African Trade,” China Daily, January 20, 2005 (online at chinadaily.com.cn). For further analysis of China’s defining its foreign aid, see Sara Lengauer, “China’s Foreign Aid Policy: Motive and Method,” Bulletin of the Centre for East-West Cultural and Economic Studies , September 1, 2011, p. 38 (online at epublications.bond.edu.au/cm).

154 . Carol Lancaster, “Foreign Aid in the Twenty-First Century: What Purposes?” in Louis A. Picard, Robert Groelsema, and Terry F. Buss (eds.), Foreign Aid and Foreign Policy: Lessons for the Next Half Century (Armonk, NY: M.E. Sharpe, 2008), p. 39.

155 . “China Will Help train 3,000 Professionals from More Than 130 Developing Countries This Year,” Xinhua, June 14, 2004 (from FBIS Doc. ID CPP20040614000201).

156 . Robert G. Sutter, Chinese Foreign Relations: Power and Policy Since the Cold War (Lanham, MD: Rowman and Littlefield, 2008), p. 108.

157 . During the recent recession, China has also provided funds that might be called emergency help to the International Monetary Fund and to Greece.

158 . Ibid. Also see “China’s Growing Role in UN Peacekeeping,” Asia Report , April 17, 2009. In early 2009, China had 2,000 peacekeepers serving in ten UN operations worldwide. It is worth recalling that in 1971, when it joined the UN, China rejected the concept of peacekeeping.

184 ● Notes

159 . See Pang Zhongying, “China’s Changing Attitude to UN Peacekeeping,” International Peacekeeping , No. 1, 2005, pp. 87–104.

160 . Samuel S. Kim, “Chinese Foreign Policy Faces Globalization Challenges,” in Alastair Iain Johnson and Robert S. Ross (eds.), New Directions in the Study of China’s Foreign Policy (Stanford, CA: Stanford University Press, 2006), pp. 297–98.

161 . “China’s National Defense in 2006,” Xinhua, December 29, 2006. 162 . “2008 Status of Contributions to the Regular Budget, International Tribunals,

Peacekeeping Operations, and Capital Master Plan,” cited in “Comparing Global Influence,” p. 42. China’s overall rank in contributing personnel to peacekeeping was number 12 and its contribution to the UN’s peacekeeping budget was 3 percent (compared to the US at 26 percent).

163 . Cui Xiaohuo, “Peacekeeping Role Marching Forward,” China Daily , July 4, 2009 (online at chinadaily.com). According to this article, China contributed 3.15 percent of the UN’s peacekeeping budget, ranking seventh most among contributors. This number accords with Western estimates. See 2009 Report to Congress (by U.S.-China Economic and Security Review Commission), November 2009 (Washington, DC: U.S. Government Printing Office, 2009), p. 117. According to this report, the number is slightly less if counting only troops, but slightly higher if also counting police.

164 . It is worth noting that China’s support of peacekeeping may stem from its concerns with acquiring natural resources. The US government source cited above suggests this is the case.

165 . China has given large amounts of foreign aid to these organizations as will be seen in following chapters.

166 . This point is assessed further in the conclusion of this book. 167 . Chinese leaders did not say this openly. But they did note that China had a

large portion of its foreign exchange in US dollars and that the dollar was being devalued and as a consequence China lost money. In fact, Chinese lead-ers criticized the United States for this probably to answer criticism about the losses, which they could not do much about. See Volume 1, Chapter 3 for more details on this topic.

168 . Shambaugh, China Goes Global , pp. 179–80. 169 . See Farah Abuzeid, “Foreign Aid and the ‘Big Push’ Theory: Lessons from

Sub-Sahara Africa,” Stanford Journal of International Relations , Fall 2009 (online at stanford.edu).

170 . “China’s Foreign Aid,” Part I. 171 . “Providing foreign aid as a way to survive,” Global Times, July 21, 2012 (online

at globaltimes.cn). 172 . “Comparing Global Influence,” p. 34. 173 . “White Paper: China’s Foreign Aid,” China Daily , April 22, 2011 (online at

chinadaily.com.cn). 174 . Chinese officials used the term “foreign aid” though they seemed to mean

foreign assistance or financial help or a broader term. They appeared to want

Notes ● 185

to use the same language as other countries and aid-giving organizations even though the definition was different.

175 . Carol Lancaster, “The Chinese Aid System,” The Reality of Aid , July 1, 2007 (online at www.realityofaid.org )

176 . See “Full Text: China’s Foreign Aid,” Xinhua, July 10, 2014 (online at xihua-net.com).

177 . See Zhang Dan, “China Issues White Paper on Foreign Aid,” Xinhua, July 10, 2014 (online at xinhua.com.cn).

178 . This issue is discussed in a number of places in Copper, China’s Foreign Aid. For a recent statement of this problem, see “Comparing Global Influence” p. 33. One report mentions that China administers aid in an ad hoc manner and that because it is also a recipient and citizens object to its lavish spend-ing on aid, it is reluctant to be seen as a major aid donor. See Thomas Lum, Hannah Fisher, Julissa Gomez-Granger, and Anne Leland, “China’s Foreign Aid Activities in Africa, Latin America, and Southeast Asia,” Congressional Research Service, February 25, 2009, p. 1. Also see Kerry Dumbauagh, “China’s ‘Soft Power’: Overview and U.S. Policy Challenges,” in China’s Foreign Policy and “Soft Power” in South America, Asia, and Africa (Washington, DC: U.S. Government Printing Office, 2008), p. 2. The author notes that diplomatic factors that affect aid giving make it difficult to assess or predict.

179 . For example, data on China’s economy are collected by the national govern-ment from figures provided by the provinces. At times the provinces inflate the figures to prove that they had done a good job in promoting growth. At other times they report lower figures to reduce their tax obligations or to get financial help from Beijing. See Ted Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World (New York: Scribner, 2005), pp. 9–10. Foreign analysts also vastly disagree in their estimates of China’s economy. See, for example, Stephen Green, “Lies, Damned Lies, and Chinese Statistics,” Far Eastern Economic Review, January/February 2009, p. 14. The Chinese government has admitted that its statistical data are often not accurate and has promised to fix this problem. See “China Says to Improve Economic Statistics after Foreign Media Comment,” Xinhua, April 17, 2009 (online at chinaorg.cn/china/news/2—9–04–18/content 17629318.htm). As will be noted below the total amount of aid announced by the Chinese during a specific year or a period of time often disagrees with a figure derived from simply adding what China announces that year or during a period of several years. The Chinese government is also motivated to undervalue its aid in order to keep aid and investment funds from Western countries (Japan being a good example) and international financial organizations and to reduce domestic opposition to its aid giving.

180 . During the early years, China’s currency was valued at $1=2.46 Yuan. See Wolfgang G. Friedman, George Kalmanoff, and Robert F. Meagher, International Financial Aid (New York: Columbia University Press, 1966), p. 85. Recently it has been valued at 7 or so per $1.

186 ● Notes

181 . Carol Lancaster, “The Chinese Aid System,” Center for Global Development Essay , June 2007, p. 2 (online at cgdev.org).

182 . See Bartke, China’s Economic Aid , pp 10–11. The author cites $229 million as the value of China’s aid in 1973.

183 . Horvath, Chinese Technology Transfer to the Third World , pp. 20–21. The author puts China’s aid at $440 million.

184 . Black, The Strategy of Foreign Aid , p 101. The author cites two US Department of State publications as his “principal source.”

185 . Laos may be defined as a Communist country and, therefore, not seen as a developing country notwithstanding its low per capita income. But the Communist label should not apply until 1975.

186 . Warren Weinstein (ed.), Chinese and Soviet Aid to Africa (New York: Praeger, 1975), p. 249. Bartke cites $49 million China gave in 1969; Horvath gives the figure $52 million.

187 . Law, Chinese Foreign Aid, p. 286 and p. 88. 188 . W.F. Choa, “China’s Economic Aid to Developing Countries,” China

Mainland Review (Hong Kong), June 1965. 189 . Ibid. 190 . Teh-chang Lin, “Beijing’s Foreign Aid Policy in the 1990sTable 1 (on p. 38).

The author’s data are from his PhD dissertation and various issues of Almanac of China’s Foreign Economic Relations and Trade published in China (no pub-lisher cited).

191 . “Communist Governments and Developing Nations: Trade and Aid,” US Department of State, Bureau of Intelligence and Research, Research Memorandum, June 17, 1966, p. 2, Table 1.

192 . The Aid Programme of China , p. 6 and Table 1. 193 . Handbook of Economic Statistics (Washington, DC: Central Intelligence

Agency, 1990). 194 . Copper, China’s Foreign Aid , p. 23. 195 . Barnett, Communist China and Asia , p. 244. The author gets his informa-

tion from various reports on budgets cited in issues of Current Background . See footnote no. 53 on page 522. It should be noted that the Chinese way of counting years is different and includes both the beginning and ending year; therefore 1953 to 1957 is five years.

196 . Ibid. 197 . Ibid., p. 245. 198 . Ibid. 199 . Sutter, Chinese Foreign Relations , p. 368. 200 . Copper, “China’s Foreign Aid, 1975–78,” p. 216. Also see John F. Copper,

“China’s Foreign Aid Program: An Analysis and Update,” in China Looks to the Year 2000 by the Joint Economic Committee of the U.S. Congress (Washington, DC: U.S. Government Printing Office, 1986). China’s rela-tions with North Vietnam had been strained after Hanoi defeated the United States in the war and especially after it invaded Cambodia, a nation friendly

Notes ● 187

and close to China, in 1978 and ruled it as a client state. China’s relations with Albania deteriorated because of China’s close relations with Washington.

201 . Ibid., p. 36. Official aid here means aid pledged, not including military aid. 202 . Mentioned earlier is the problem of whether “foreign aid” includes arms and

other military hardware. Any kind of assistance to the military of the recipient countries or economic help to countries involved in conflict presents a seri-ous problem in measuring China’s aid. The OECD definition of aid does not include arms aid.

203 . One report mentions this problem, but the authors do not attempt to assess it. See Lum et al., Comparing Global Influence , p. 33. Also, see Copper, China’s Foreign Aid. He mentions it in various places.

204 . One reason for this is that China extended both in large amounts to facilitate the acquisition of energy and other natural resources and create markets for Chinese goods. See Lum et al., China’s Foreign Aid Activities in Africa, Latin America, and Southeast Asia , Summary.

205 . Lin, “Beijing’s Foreign Aid Policy in the 1990s,” Table 1. 206 . Carol Lancaster, “Foreign Aid in the Twenty-First Century,” p. 43. 207 . “Understanding Chinese Foreign Aid: A Look at China’s Development

Assistance to Africa, Southeast Asia, and Latin America,” New York University Wagner School (this was a report prepared for the Congressional Research Service), April 25, 2008. There is no explanation why China’s aid to North Korea, some South Asian and Middle East countries and some Central Asian and European nations was not included. This figure the author derived from the report’s statement that China’s aid in 2007 was $31 billion or 20-fold of what it was in 2003.

208 . Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is Transforming the World (New Haven, CT: Yale University Press, 2007), p. 98.

209 . Carol Lancaster, “The Chinese Aid System,” p. 3 (online at cgdev.org). 210 . Phillip C Saunders, “China’s Global Activism: Strategy, Drivers, and Tools,”

Institute for National Strategic Studies, National Defense University, 2006, p. 2. 211 . Cris Alden, “China’s New Engagement with Africa,” in Riordan Routt and

Guadduple (eds.), China’s Expansion into the Western Hemisphere: Implications for American and the World (Washington, DC: Brookings 2008), p. 217. For more recent statements saying essentially the same thing or something quite similar, see Teresita Cruz-del Rosario, “Enter the Dragon, Softly: Chinese Aid in South, Southeast and Central Asia,” Lee Kuan Yew School of Public Policy (Working Paper Series), June 2011, p. 7. And Shambaugh, China Goes Global , p. 110.

212 . “Understanding Chinese Foreign Aid: A Look at China’s Development Assistance to Africa, Southeast Asia, and Latin America, New York University’s Wagner School, April 25, 2008.

213 . Hideo Hash, “China’s Regional Trade and Investment Profile,” in David Shambaugh (ed.), Power Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2005), p. 87. The author cites several sources, both UN and Chinese government publications.

188 ● Notes

214 . Ibid. 215 . Lancaster, “The Chinese Aid System,” p. 10. 216 . Lum, et al., “Comparing Global Influence,” p. 4. 217 . Chen-dong Tso, “Coming to Terms with China’s Foreign Aid,” Peace Forum ,

July 13, 2009 (online at peaceforum.org.tw). The writer cites the Congressional Research Service and the Australian Lowy Institute as sources.

218 . Richard Grimmest, “Conventional Arms Transfers to Developing Countries, 1999–2006,” Congressional Research Service, September 26, 2007.

219 . See Lum, et al., “Comparing Global Influence, “p. 33. 220 . Michael A. Glossy, “China’s Foreign Aid Policy: Lifting States out of Poverty

or Leaving Them to Dictators?” Freeman Report (Center for Strategic and International Studies) December 2006 (online at www.csis.org ).

221 . “Understanding Chinese Foreign Aid.” There is no explanation why China’s aid to North Korea, some South Asian and Middle East countries, and some Central Asian and European nations was not included. This figure was derived by the author from the statement in the report that China’s aid in 2007, which was $31 billion, was three times what it was in 2005.

222 . Sutter, Chinese Foreign Relations (third edition), pp. 316–17. 223 . “Statement by Chinese Foreign Minister Li Zhaoxing at the High-Level

Meeting for Mid-Term Review of Program of Action for LDC’s for Decade 2001–2010,” Ministry ofForeign Affairs, September 19, 2006 (online at chi-naconsulates.org).

224 . “Statement by President Hu Jintao of China at the High-Level Meeting on Financing for Development at the United Nations Summit,” Permanent Mission of the People’s Republic of China to the UN, September 14, 2005 (online at www.fmpr.gov.cn ).

225 . “China Boosts Foreign Aid Training Programs,” China CSR, September 12, 2007 (online at www.chinacsr.org ).

226 . World Military Expenditures and Arms Transfers, 1967–1976 (Washington, DC: Arms Control and Disarmament Agency, 1978), p. 26.

227 . World Military Expenditures and Arms Transfers, 1969–1978 (Washington, DC: Arms Control and Disarmament Agency, 1980), p. 159.

228 . Richard F. Grimmett, “Conventional Arms Transfers to Developing Nations, 2000–2007,” Congressional Research Service, October 23, 2008, p. 11. In this report China was ranked fifth according to most of the categories used such as agreements, deliveries, etc. China ranked considerably below the United States and Russia and also behind the United Kingdom and France. China ranked high in transferring tanks, self-propelled guns, armored vehi-cles, combat aircraft, and missiles. It is worth noting that China was also a leading purchaser of weapons (mainly from the Soviet Union), ranking number one in the world during the period 2000–03, and fourth during 2004–07.

229 . See Jacqueline Newmyer, “Oil, Arms and Influence: The Indirect Strategy behind Chinese Military Modernization,” Orbis , Spring 2009, p. 214. The writer,

Notes ● 189

for example, cites China’s help in building fiber optic cables for Iran, which were used by the military under Saddam Hussein; various forms of military aid were also given to Nepal and so was a guided-missile project with Turkey.

230 . This point is discussed in following chapters. Several countries have received China’s assistance in this realm.

231 . Anne Gilks and Gerald Segal, China and the Arms Trade (New York: St. Martin’s Press, 1985), p. 29.

232 . “China Granted Aid to 120 Countries in 60 years,” People’s Daily Online , August 12, 2010 (online at English.people.com.cn/90776/90773/7102942html).

233 . “Li Keqiang Visits Exhibition Marking 60 Years of China’s Foreign Aid,” Xinhua, August 22, 2010.

234 . “China’s Foreign Aid,” Information Office of the State Council, April 2011 (online at http://news.xinhuanet.com/english2010/china/2011-04/21/c_13839683.htm ). Also see Gillian Wong, “China Cites Positive Impact in First Report on Aid,” Associated Press, April 21, 2001 (online at news.yahoo.com/s/20110421/ap_on_bi_ge/as_china_foreign_aid).

235 . Ibid. 236 . Sara Lengauer, “China’s Foreign Aid Policy: Motive and Method,” Bulletin of

the Center for East-West Cultural and Economic Studies, September 1, 2011, p.35.

237 . These two statements are discussed further in following chapters and their sources are documented there.

238 . John Wong and Sarah Chan, “China’s Outward Direct Investment: Expanding Worldwide,” China: An International Journal , September 2003, p. 280.

239 . Shambaugh, China Goes Global , p. 177. 240 . Sutter, Chinese Foreign Relations, p. 109. Sutter cites Trends and Recent

Developments in Foreign Direct Investment (Paris: Organization for Economic Cooperation and Development, 2005). He notes that the figure should be much higher, and believes that aid or investments that do not require the loss of Chinese funds or that investments are defined as deals involving Chinese commodities or the involvement of Chinese businesses.

241 . Jiang Wei, “Outward Investment Steady,” China Daily , January 24, 2006, p. 9, cited in Sutter, Chinese Foreign Relations , p. 109.

242 . Derek Scissors, “Chinese Outward Investment: Better Information Required,” The Heritage Foundation, February 25, 2010.

243 . As will be seen in following chapters China has announced investments much larger than the Chinese figures announced here; thus the US analyst pro-vided data that are more accurate, though he mentions that more and better data are needed.

244 . Shambaugh, China Goes Global , p. 177. 245 . Ibid., p. 178. US outward investments in 2010 totaled nearly five times

China’s. 246 . Li Jiabao and Zhang Yuwei, “Promising Outlook on US, China Investment,”

China Daily , June 27, 2013 (online at chinadaily.com.cn).

190 ● Notes

247 . See Lengauer, China’s Foreign Aid Policy,” p. 38; Lum et al., “China’s Foreign Aid Activities in Africa, Latin America, and Southeast Asia,” p. 3.

248 . This point is mentioned in coming chapters. 249 . See, for example, Fox Butterfield, China: Alive in the Bitter Sea (New York:

Bantam Books, 1982), pp. 319–22 and 383–405. 250 . Carol Lancaster, “The Chinese Aid System,” p. 2. 251 . Ibid. Also see Thomas Lum, Wayne W. Morrison and Bruce Vaughn, “China’s

‘Soft Power’ in Southeast Asia, Congressional Research Service, January 4, 2008. According to China’s 2011 report, “China’s Foreign Aid” Part IV, 11.0 percent of China’s aid recipients were “medium and high income countries.”

252 . See Lancaster, “The Chinese Aid System.” Several other writers have also noted the impasse in trying to assess China’s aid due to the fact it is considered a state secret and have found many officials unwilling to talk about it for that reason. See, for example, Chin and Frolic, Emerging Donors in International Development Assistance , p. 11.

253 . Alex Wilks, ”China and the Paris Declaration: An Intriguing Question,” The Better Aid Blog, September 21, 2007 (online at betteraid.org).

254 . Ibid. Some other writers have also observed this, especially about the magnitude of China’s aid giving or the total numbers. See Deborah Brautigam, “China’s Foreign Aid in Africa: What Do We Know?” in Robert I. Rotberg (ed.), China into Africa: Trade, Aid, and Influence (Washington, DC: Brookings, 2008), p. 214 footnote no. 5.

255 . This is true, in particular, of China’s aid to Africa as will be seen in Volume 3, Chapter 2.

256 . Wilks, ”China and the Paris Declaration.”. 257 . Lancaster, “The Chinese Aid System,” pp. 3–4. 258 . Ibid.

2 China’s Worldview and Its Foreign Aid and Investment Diplomacy

1 . See C. K. Yang, “The Feudal Relationship between Confucian Thought and Chinese Religions,” in John Fairbank (ed.), Chinese Thought and Institutions (Chicago, IL: University of Chicago Press, 1957), p. 269. As the author points out, some writers have seen Confucius as agnostic, but this is hardly the case. Another writer notes that ancient kings in China, as elsewhere, often “appealed to the supernatural” in the course of their rule. See Michael Loewe, Imperial China (London: George Allen and Unwin, 1966), p. 71.

2 . Confucius thought of Heaven not as an “arbitrary governing tyrant, but the embodiment of a system of legality (wherein) . . . the Ruler shall act by set-ting an example, like Heaven.” See Wolfram Eberhard, A History of China (Berkeley: University of California Press, 1969), p. 42.

3 . Derk Boode, Essays on Chinese Civilization (Princeton, NJ: Princeton University Press, 1981), p. 107.

Notes ● 191

4 . Loewe, Imperial China , p. 74. 5 . Jonathan Spence, The Search for Modern China (New York: W. W. Norton,

1990), p. 85. Spence calls this “moral indoctrination.” 6 . See Charles O. Hacker, China’s Imperial Past An Introduction to Chinese History

and Culture (Stanford, CA: Stanford University Press, 1975), p. 55. Hacker calls the Mandate of Heaven the “cornerstone” of Chinese political theory.

7 . See Wolfram Eberhard, “Political Function of Astronomy and Astronomers in Han China,” in John K. Fairbank (ed.), Chinese Thought and Institutions , p. 37 for details on this point. It is worth noting that in China there was no concept of the divine right of kings as there was in Europe.

8 . See John King Fairbank, The United States and China (Cambridge, MA: Harvard University Press, 1979), p. 57.

9 . In fact, one can argue that China has the longest tradition of successful autoc-racy of any nation in the world. See John King Fairbank and Merle Goldman, China: A New History (Cambridge, MA: Harvard University Press, 1998), p. 1.

10 . Lucien Pye, Asian Power and Politics: Cultural Dimensions of Authority (Cambridge, MA: Harvard University Press, 1985), p. 88. Pye notes that people who did not respond to their model rules were seen as being less than human.

11 . Yang, “Feudal Relationship,” p. 269. 12 . Bin Wang, China’s Transformation: Historical Change and the Limits of European

Experience (Ithaca, NY: Cornell University Press, 2000), p. 97. 13 . See Fairbank and Goldman, China: A New History , p. 62. 14 . See Chih-yu Shih and Zhiyu Shi, China’s Just World: The Morality of Chinese

Foreign Policy (Boulder, CO: Lynne Rienner, 2003), p. 30. The authors state: “In fact, once China was united by Qin Shihuang, legalism proved to be an inadequate instrument of rule because it was virtually impossible for the emperor to amass enough force to control his huge territory. Confucianism was the natural rescue.”

15 . Fairbank and Goldman, China: A New History , pp. 62–63. 16 . Fairbank, The United States and China , p 54. 17 . Milton W. Meyer, China: A Concise History (Lanham, MD: Rowman and

Littlefield, 1994), p. 3. The author notes “rulers guided the population through their conduct, not by codes of law.”

18 . In the ancient Middle East this idea is found in Mesopotamian and Egyptian cultures, but both making this claim weakened it. China had no competitors. See Benjamin I. Schwartz, Communism in China: Ideology in Flux (New York: Atheneum, 1975), p. 230.

19 . Samuel S. Kim, China, the United Nations, and the World Order (Princeton, NJ: Princeton University Press, 1979), p. 20.

20 . Most Western foreign aid has been influenced by charity and problems relat-ing to colonialism and war. China’s tribute was based on quite different think-ing, as we will see.

192 ● Notes

21 . Historian John Fairbank notes that Confucius, upon whose teachings China’s state ideology was based, ran a school to teach political leaders right moral conduct. He also notes that “government by goodness” prevailed in China in a way unlike anything in the West. He further states: “Right conduct gave the ruler power.” See Fairbank, United States and China , pp. 57–59.

22 . See Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New World Order (New York: Penguin, 2012), pp. 200–1. The author states: “Confucian ways of thinking, never extinguished, are being revived and scrutinized for any light that they might throw on the present, and for their ability to offer a moral compass.” Historian Wang Gungwu has suggested that writings on foreign relations of two thousand . . . years ago seem so compellingly alive today.” See also Wang Gungwu, “Early Ming Relations with Southeast Asia: A Background Essay,” in John King Fairbank (ed.), The Chinese World Order: Traditional China’s Foreign Relations (Cambridge, MA: Harvard University Press, 1968), p. 61.

23 . Jacques Gernet, A History of Chinese Civilization (London: Cambridge University Press, 1972), p. 635. Of course, both Western and Chinese schol-ars have argued that Chiang did not rule this way. Yet one can also argue that there is always a gap between theory and practice in governance and that Chiang ruled during a period of war.

24 . Fairbank, The United States and China , p. 55. 25 . Wang Gungwu, “The Chinese,” in Dick Wilson (ed.), Mao Tse-tung in the

Scales of History (London: Cambridge University Press, 1977), p. 291. It is also interesting to note that Mao’s given name suggests he is to aspire to be an official in the Confucian tradition though Mao did not change it as some other Chinese leader did (Lin Biao for example). In addition, Mao’s Red Book was published in huge quantities for the masses to memorize and cite, just as Confucian texts were, and as Confucians was not often called by his name, but rather was referred to as “the sage” Mao was not called by his name either, but was appellated “the chairman.” Another writer notes that Mao’s “ Little Red Book drew on the Confucian tradition.” Jacques, When China Rules the World , p. 198.

26 . For details on this point, see Henry Kissinger, On China (New York: Penguin, 2011), chapters 4 through 10.

27 . Ross Terrill, The New Chinese Empire and What It Means for the United States (New York: Basic Books, 2003), p. 134.

28 . These were land reform, honest and efficient government, moderate taxation, minimum interference in the private lives of the people, and freedom from being despoiled by marauding armies. See John F. Malby, The Mandate of Heaven: Record of a Civil War, China 1945–49 (London: University of Toronto Press, 1968), p. 303.

29 . Maurice Meisner, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1975–1994. (New York: Hill and Wang, 1996), chapter 4. Also see Edward Friedman, National Identity and Democratic Prospects in Socialist China (Armonk, NY: M. E. Sharpe, 1995), pp. 285 – 86. Friedman notes

Notes ● 193

that the post-Mao policy was “meant to combine authoritarian Confucian values and pragmatic economics.” He further states that Deng’s model was Singapore’s Lee Kuan Yew, the “most renowned exponent of this conservative Confucian evaluation.” Deng clearly made economic growth and the prosper-ity of China a legitimator of his and the Communist Party’s rule.

30 . Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite (Berkeley: University of California Press, 1998), p. 72.

31 . Agence France Press, July 22, 1996 cited in ibid., p. 170. 32 . Tony Zurlo, China (Nations in Transition) (Sligo, Ireland: Greenhouse Press,

2002), p. 70. 33 . See Edward Friedman, “Jiang Zemin’s Successors and China’s Growing Rich-

Poor Gap,” in Tun-jen Cheng, Jacques deLisle, and Deborah Brown (eds.), China under Hu Jintao: Opportunities, Dangers and Dilemmas (Singapore: World Scientific, 2006), p. 103.

34 . Regarding the much-expanded input of intellectuals in the decision-mak-ing process, see Bergsten et al., China’s Rise : Challenges and Opportunities (Washington, DC: Peterson Institute, 2009), pp. 35–36. The financing of Confucian institutes will be mentioned in later pages.

35 . Economist , May 19, 2007, p. 48. 36 . Orville Schell and John Delury, Wealth and Power: China’s Long March to the

Twenty-First Century (New York: Random House, 2013), p. 387. 37 . William A. Callahan, China Dreams: 20 Visions of the Future (Oxford: Oxford

University Press, 2013), p. 21 and p. l46. 38 . See C. P. Fitzgerald, China Views Its Place in the World (London: Oxford

University Press, 1969), pp. 7–10. 39 . China’s level of economic development and its affluence will be discussed fur-

ther in the next chapter. It should be noted here, however, that the Westerners that visited China in the 1500s were deeply impressed with China’s riches, though this was forgotten in later centuries and the image in the West was that China was poor. For a description of China when Matteo Ricci and oth-ers visited, see Robert Elegant, The Center of the World: Communism and the Mind of China (New York: Funk & Wagnalls, 1968), chapter 3. Another writer notes that from the first century AD to the early nineteenth century, China’s economy made up between 22 and 33 percent of the global gross domestic product. See David Lampton, “Three Faces of China’s Power,” Foreign Affairs , March/April 2007, pp. 115–27.

40 . See Harry G. Gelber, The Dragon and the Foreign Devils: China and the World, 1100 B.C. to the Present (New York: Walker and Company, 2007), p. 34. Gelber notes that often the tribute bearers would come to China with very small gifts and leave with gold and other treasures. Also, see Warren I. Cohen, East Asia at the Center: Four Thousand Years of Engagement with the World (New York: Columbia University Press, 2000), p. 25.

41 . Spence, The Search for Modern China , p. 118. One writer calls this “tribute trade”—noting that it “bought” the allegiance of vassal states and helped con-trol the flow of people and commodities across China’s far-flung frontiers. He

194 ● Notes

also notes that this trade, being of such import, was not taxed. See Giovanni Arrighi, “China’s Market Economy in the Long Run,” in Ho-fung Hung (ed.), China and the Transformation of Global Capitalism (Baltimore, MD: Johns Hopkins University Press, 2009), p. 27.

42 . See Kim, China, the United Nations, and World Order , pp. 25–26. The author notes they also picked up China’s religious beliefs and language.

43 . Fairbank (ed.), The Chinese World Order , pp. 10–11. 44 . Milton W. Meyer, China: A Concise History (Lanham, MD: Rowman and

Littlefield, 1994), p. 243. The author also notes that for China it was a policy of “pacification through the exchange of gifts.”

45 . Gelber, The Dragon and the Foreign Devils , pp. 34–35. 46 . Ross Terrill, The New Chinese Empire (New York: Basic Books, 2003), p. 63. 47 . Ibid., p. 64. 48 . One author describes the tribute system as a “nonaggressive form of imperi-

alism” and a “policy of pacification through the exchange of gifts.” Meyer, China: A Concise History , p. 243.

49 . See Steven W. Mosher, Hegemon: China’s Plan to Dominate Asia and the World (San Francisco, CA: Encounter Books, 2000), p. 3.

50 . Jacques, When China Rules the World , p. 274. China’s view of its conduct of foreign relations was patriarchal. Chinese officials received representatives of “barbarian” rulers who came to the Middle Kingdom to learn and to trade. The head of the “Celestial Empire” (as China referred to itself), the emperor, enlisted them into “the realm of the civilized” as China’s tributaries. The emperor’s minions taught them how to kowtow and instructed them in other rules and protocol in conducting relations with China. China was clearly the superior; the countries that paid tribute were the inferiors. See Ssu-yu Teng and John Fairbank, China’s Response to the West: A Documentary Survey 1839 – 1923 (New York: Atheneum, 1973), pp. 18–19.

51 . In the case of Tibet and some other areas, tribute-bearing missions would bring half of a bronze fish that fit the other half kept in China.

52 . Mark Mancall, China at the Center: 300 Years of Foreign Policy (New York: The Free Press, 1984), p. 2. Of course, the term gong is used to translate the word tribute but the author would say that this does not adequately convey the broad and deep meaning of the concept.

53 . Joseph R. Levenson, “The Inception and Displacement of Confucianism: From History as the Base of Culture to Historicism and Shifting Sands,” Diogenes , Summer 1963, pp. 65–80, cited in Mancall, China at the Center , p. 21.

54 . Karl Polany, Conrad Arensberet, and Harry Pearson (eds.), Trade and Market in the Early Empires: Economics in History and Theory (Glencoe, IL: Free Press, 1957), cited in Mancall. China at the Center , p. 16. This, of course, created difficulties for China in its relations with Asian neighbors. See also Harold C. Hinton, “China as an Asian Power,” in Thomas W. Robinson and David Shambaugh (eds.), Chinese Foreign Policy: Theory and Practice (Oxford: Claredon Press, 1994), pp. 352–53.

Notes ● 195

55 . Mancall, China at the Center, p. 15. 56 . John Fairbank, “On the Ch’ing Tributary System,” Harvard Journal of Asiatic

Studies , June 1941. 57 . Fox Butterfield, China: Alone in the Bitter Sea (New York: Times Books, 1982),

p. 56. 58 . Andrew J. Nathan and Robert S. Ross, The Great Wall and the Empty Fortress:

China’s Search for Security (New York: W. W. Norton, 1997), p. 22. 59 . The details of this can be found in Volume 2, Chapter 2, in the section on

Nepal. 60 . Terrill, The New Chinese Empire, p. 63. 61 . It is worth nothing that similar ideals have been perpetuated by global powers

in modern times including the US promotion of itself as the font of democ-racy and liberty while contending that its diplomacy is always based on these ideals.

62 . John W. Garver, Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ: Prentice Hall, 1993), p. 13.

63 . Dana R. Dillan, The China Challenge (Lanham, MD: Rowman & Littlefield, 2007), p. 5.

64 . Clearly the tribute system was not abandoned at times in the past when China was weak. One scholar notes that during the Sung Dynasty, a “lesser empire,” the rhetoric of tribute was “immensely comforting and reassur-ing.” See Wang Gungwu, “The Rhetoric of a Lesser Empire: Early Sung Relations with Its Neighbors,” in Morris Rossabi (ed.), China among Equals: The Middle Kingdom and Its Neighbors, 10th – 14th Centuries (Berkeley: University of California Press, 1983). Another writer states that tribute was the “only framework of foreign relations known to traditional China.” See Joseph Camilleri, Chinese Foreign Policy: The Maoist Era and Its Aftermath (Seattle: University of Washington Press, 1980), p. 5. Two other authors note: “Because traditional foreign policy was Sinocentric, assimilative, normative, ideological, personalistic and hierarchical, nineteenth-century China had trouble adapting to the European-organized multistate system which was egalitarian, nonideological and contractual.” See Andrew J. Nathan and Andrew Scobell, China’s Search for Security , (New York: Columbia University Press, 2012), p. 26.

65 . Terrill, The New Chinese Empire , p. 267. 66 . Mosher, Hegemon , p. 46. 67 . See Dillan, The China Challenge , p. 7. 68 . Eberhard, History of China , p. 352. 69 . For further details, see John F. Copper, Playing with Fire: The Looming War

with China over Taiwan (Westport, CT: Praeger, 2006), pp. 110–14. 70 . Ibid., p. 113. 71 . Western critics pointed out that because of the $800 billion in US govern-

ment debt that China held, President Obama lavishly praised his hosts when he visited China and did not criticize China for human rights abuses, as had other US presidents. Some described the president as a supplicant; others

196 ● Notes

said his visit was humiliating. See, for example, “Leaders: The Pacific (and Pussyfooting) President: Barack Obama in Asia,” Economist , November 21, 2009, p. 16.

72 . “Bridge over Troubled Water,” Economist, November 15, 2014, p. 15. 73 . Nathan and Scobell, China’s Search for Security , p. 27. 74 . See Jacques, When China Rules the World , pp. 191–92. 75 . Ibid. It is interesting to note in this connection that one author has divided the

world into two parts: one that emphasizes rule-based governance that assumes democracy (the United States, Europe, Africa, and Latin America) and the other, Asia, which focuses on economic growth and prosperity. See Michael Wesley, “The New Bipolarity,” American Interest, January/February 2013, pp. 34–40.

76 . See Callahan, China Dreams , p. 55. 77 . See Steve Chan, Looking for Balance: China, the United States and Power

Balancing in East Asia (Stanford, CA: Stanford University Press, 2012). 78 . Jacques, When China Rules the World , p. 375. 79 . Ibid., p. 420. Another writer calls China’s tribute system a kind of soft power,

suggesting it was not too different from China’s use of soft power today, which it is obviously working successfully. See Sheng Ding, The Dragon’s Hidden Wings: How China Rises with Its Soft Power (Lanham, MD: Lexington Books, 2008), p. 153.

80 . This is one of the main themes of Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model will Dominate the Twenty-First Century (New York: Basic Books, 2010).

81 . Mao died in 1976, but his view of the world, like Mao’s other ideas, lasted until late 1979 when Deng Xiaoping assumed the role of China’s top leader.

82 . China’s foreign policy decision making, of course, has many origins. Some argue that China’s domestic politics affect foreign policy more than interna-tional conditions or events. See, for example, David Bachman, “Domestic Sources of Chinese Foreign Policy,” in Samuel S. Kim (ed.), China and the World (Boulder, CO: Westview Press, 1989) and Kenneth Lieberthal, “Domestic Politics and Foreign Policy,” in Harry Harding (ed.), China’s Foreign Relations in the 1980s (New Haven, CT: Yale University Press, 1984). Others argue the reverse. In terms of how Chinese decision makers look at China’s external environment, Mao’s view of the world constitutes the prism through which they look and formulate their views. Since theory plays such an important role in the Communist way of thinking and because contending theories to “explain reality” in the world did not exist, Mao’s views are vitally important. See, for example, Wang Jixi, “International Relations Theory and the Study of Chinese Foreign Policy: A Chinese Perspective,” in Robinson and Shambaugh (eds.), Chinese Foreign Policy , pp. 381–487. One writer notes that China’s foreign policy is more “conceived as part of a world order, which it (and in principle all other nations) must fit. See Lowell Dittmer, “On China’s Rise,” in Brantley Womack (ed.), China’s Rise in Historical Perspective (Lanham, MD: Rowman and Littlefield, 2010), p. 40.

Notes ● 197

83 . Benjamin I. Schwartz, Communism in China: Ideology in Flux (Cambridge, MA: Harvard University Press, 1968), chapter 10.

84 . Ibid. 85 . See Kissinger, On China , chapters 4 through 11. 86 . Arthur A. Cohen, The Communism of Mao Tse-tung (Chicago, IL: University

of Chicago Press, 1964), chapter 1. 87 . For Chinese leaders, Marxism-Leninism provided the perceptional prism

through which they viewed the world and, which they believed, explained reality. However, a second or additional cluster of ideas also influenced them. As ideology declined in importance it still played a major role in policy for-mation. See Steven I. Levine, “Perception and Ideology in Chinese Foreign Policy,” in Robinson and Shambaugh (eds.), Chinese Foreign Policy , p. 30. The author cites Benjamin Schwartz regarding the latter idea.

88 . For original writings that put forth these views, see Dan N. Jacobs and Hans H. Baerwald (eds.), Chinese Communism: Selected Documents (New York: Harper Torchbooks, 1963). Reading the most read of Mao’s and other Chinese Communist leaders works one gets the impression of a hostile and inflexible China. However, considering Mao’s writings on the united front, one might see China’s worldview and thus its foreign policy as more flexible.

89 . It is worth noting here that Mao’s formulated these views in the 1930s in writings such as “Dialectical Materialism,” “On Practice,” and “On Contradictions.” His ideas were well developed and, one might say, not easy to change in the sense Mao might abandon communism and seek good relations with the United States. See Melvin Gurtov and Byong-Moo Hwang, China under Threat: The Politics of Strategy and Diplomacy (Baltimore, MD: Johns Hopkins University Press, 1980), p. 5.

90 . Barbara Tuchman wrote an interesting article on what if Mao had visited the United States at this time, suggesting things might have been very different. Most scholars, however, do not feel that a Sino-US rapprochement was pos-sible at this time. For a discussion of the issue, see Garver, Foreign Relations of the Peoples’ Republic of China , chapter 2.

91 . Mao needed an enemy to justify his style of governing. The United States fit this role as it had supported Chiang Kai-shek and opposed Mao’s rule. Moreover, the United States was antiCommunist, in fact, increasingly so, and hostile to Mao’s regime. See Wang Shuzhong, “The Post-war International System,” in Harish Kapur (ed.), As China Sees the World: Perceptions of Chinese Scholars (New York: St. Martin’s Press, 1987), pp. 14–15. However, Mao’s per-ception of a bifurcated world was not so simplistic. In fact, many of the specif-ics of Mao’s worldview helped define the nature and the objectives of China’s foreign policy and its foreign aid, which are not too different from China’s his-torical view. Mao took up Lenin’s view that imperialism had shifted the focus of the worldwide struggle to the underdeveloped countries that were exploited by Western colonial countries. They were, in Lenin’s view, and Mao’s, the core of the revolution. Early on Mao spoke of forming an international united front against imperialism. He advocated and wrote of “peoples war,” self-reliance,

198 ● Notes

the “paper tiger” theory (that the West was in some ways weak and vulnerable), and anti-imperialism (that the Western capitalist countries were exploiters and, in fact, had to maintain this kind of relationship with the Third World to survive). For a discussion of these points, which appeared in China’s official documents later, see Winberg Chai, The Foreign Policy of the People’s Republic of China (New York: G. P. Putnam’s Sons, 1972), p. 30.

92 . No doubt, Mao was influenced also by nationalistic sentiment and sought to restore China’s place in the world. But he also viewed the world in Communist terms, as a struggle between socialism and capitalism. In fact, he melded the two views. See A. Doak Barnett, Communist China and Asia: A Challenge to American Policy (New York: Vintage Books, 1960), pp. 65–79.

93 . There is, of course, considerable debate about whether Mao viewed the United States as China’s enemy or saw the world in such starkly black-and-white terms. But Mao clearly viewed his situation and the world outside through an ideological prism and in 1949 at least did not see that he had a choice in choos-ing sides. For details, see John Gittings, The World and China: 1922 – 1972 : The Men and Ideas That Shaped China’s Foreign Policy (New York: Harper and Row, 1974), chapters 7, 8, and 9. Chinese academics have explained that while Roosevelt hoped for cooperation with the Soviet Union based on the Yalta Agreement and through the United Nations following World War II, with Harry Truman’s accession to power, differences over Europe became acute and Truman adopted a policy of “rolling back” Soviet influence. This and American support of Chiang Kai-shek during the Chinese Civil War meant that when Mao came to power in 1949 there was no room for flexibility. Mao and Chinese leaders were also well aware that the pre–WWII global balance of power system, which had been run by Europe, was destroyed. For details, see Wang Suizhong, “The Post-War International System,” in Harish Kapur (ed.), As China Sees the World , pp. 13–14.

94 . See Dennis and Ching Ping Bloodsworth, The Chinese Machiavelli: 3000 Years of Chinese Statecraft (New York: Farrar, Straus and Giroux, 1976), p. 8.

95 . Yong Deng, China’s Struggle for Status: The Realignment of International Relations (Cambridge: Cambridge University Press, 2008), p. 5.

96 . There is another way of explaining why this happened, namely that Chinese Communist ideology weakened over time or as the regime had to govern and be more pragmatic. See Schwartz, Communism and China , p. 46.

97 . This shift in view no doubt stemmed from doubts about China’s relation-ship with the Soviet Union. Mao and Chinese leaders were disappointed with Moscow’s help, and the alliance was regarded by China as worthless in the 1960s. Some, of course, would say that given China’s history as the Middle Kingdom and its superiority complex, it could not play second fiddle to the Soviet Union. China’s leader also found that alienating Third World countries with its narrow view of the world was not productive. There were a host of other reasons for Mao adopting a “variation” on bipolarity.

98 . See Gittings, The World and China, 1922 – 1972, chapter 10. It is worth men-tioning that Mao had spoken much earlier of what sounded like a “third bloc”

Notes ● 199

or “intermediate zone” to describe areas of the world, including China, that would create serious problems for US foreign policy. In 1947, this doctrine was elaborated upon and published by Lu Ting-yi, probably on Mao’s behalf. See p. 143.

99 . For details on China’s change of mind regarding the Soviet Union early on, see Donald S. Zagoria, The Sino-Soviet Conflict, 1956-61 (New York: Athenuem, 1964).

100 . See Gittings, The World and China 1922 – 1972 , chapter 10. 101 . China’s emphasis on principles may be seen as linked to China’s historical

emphasis on virtue and is not Marxist. See Dittmer, “On China’s Rise,” in Womack (ed.), China’s Rise in Historical Perspective, p. 40.

102 . For details on this theme, see Pobzeb Vang, Five Principles of Chinese Foreign Policy (Bloomington, IN: Author House, 2008), chapter 1. The other prin-ciples were mutual non-aggression, non-interference in each other’s internal affairs, and equality and mutual benefit. These tenets were later embedded into the document The Eight Principles on China’s Foreign Aid—guidelines China followed and is still following in giving assistance.

103 . These principles contradict Western principles of aid giving, which demand economic reforms and improved human rights conditions. This conflict will be discussed at length in following chapters.

104 . The French demographer Alfred Sauvy coined the term in 1952. It did not come into common usage until the Bandung Conference. See Deborah Brautigam, The Dragon’s Gift: The Real Story of China in Africa (London: Oxford University Press, 2009), p. 30.

105 . See Garver, Foreign Relations of the People’s Republic of China , p. 118. Garver suggests the rigid two-camp view ended in 1953. Mao did not actually use the term intermediate zone until 1957, though he said he had formulated it in 1946. See Kim, China, the United Nations, and World Order, p. 74.

106 . Garver, Foreign Relations of the People’s Republic of China , p. 119. 107 . Some writers suggest that what happened in the mid-1950s and Mao’s refer-

ence to an intermediate zone were not good evidence of a shift in China’s worldview since Beijing lacked the means and the drive to create a “revo-lutionary united front.” See J. D. Armstrong, Revolutionary Diplomacy: Chinese Foreign Policy and the United Front Doctrine (Berkeley: University of California Press, 1977), pp. 70–73. It may be that Mao himself was not sure or was formulating theory from the advantage of retrospect several years later. One author suggests, “the Chinese like to let their theories grow slowly and naturally, like plants responding to the environment.” See Franz Schurmann, The Logic of World Politics (New York: Pantheon Books, 1974), p. 355.

108 . Henry Kissinger, World Order (New York: Penguin, 2014), p. 225. 109 . For the use of the term “ethical diplomacy,” see John Crammer-Byng, “The

Chinese View Their Place in the World: An Historical Perspective,” China Quarterly , January-March 1973, pp. 67–79. Also see Gurtov and Hwang, China under Threat , p. 15.

200 ● Notes

110 . Lenin’s thesis is to be found in his book Imperialism: The Highest Stage of Capitalism. See Camilleri, Chinese Foreign Policy , p. 13 for a discussion of Mao’s rural base ideas applied to foreign policy.

111 . See Donald W. Treadgold, “Alternative Western Views of the Sino-Soviet Conflict,” in Herbert J. Ellison (ed.), The Sino-Soviet Conflict: A Global Perspective (Seattle: University of Washington Press, 1982), p. 328.

112 . For example, see Arthur Huck, The Security of China: Chinese Approaches to Problems of War and Strategy (New York: Columbia University Press, 1970), p. 12. Interestingly, China at this time viewed the United States as having adopted what looked like a tribute system in East Asia. The US market was being linked to the region, it granted legitimacy to nations there (or not) and gave “gifts” in the form of economic aid in the conduct of its diplomacy. See Giovanni Arrighi, “China’s Market Economy in the Long Run,” in Ho-fung Hung (ed.), China and the Transformation of Global Capitalism (Baltimore, MD: Johns Hopkins University Press, 2009), p. 32.

113 . See Barnett, Communist China and Asia , chapter 5. 114 . Mao made these claims in various speeches at the time, including one before

the Supreme Soviet in the Soviet Union. See Jacobs and Baerwald (eds.), Chinese Communism , pp. 154–55.

115 . Kim, China, the United Nations, and World Order, p. 77. 116 . Garver, Foreign Relations of the People’s Republic of China, pp. 136–37. 117 . To put this in perspective, see Barnett, Communist China and Asia ,

pp. 375–76. 118 . See Wang Shusheng, “The Post-War International System,” in Harish Kapur

(ed.), As China Sees the World , p. 15. As a consequence of these events (collec-tively), for Mao, the socialist (Communist) camp or bloc ceased to exist.

119 . Alan Lawrance, China’s Foreign Relations since 1949 (London: Routledge, 1975), p. 151. The author cites articles in People’s Daily , January 21, 1964, and Peking Review , January 24, 1964. Mao perceived that the countries in the “second intermediate zone” were former world powers that were not bullied by the superpowers and did not like their status as second-ranking powers.

120 . Kim, China, the United Nations, and World Order, p. 78. 121 . See Chih-yu Shih, China’s Just World: The Morality of Chinese Foreign Policy

(Boulder, CO: Lynne Rienner, 1993), p. 85. 122 . Ibid. The author also notes that President Lyndon Johnson spoke of “the deep-

ening shadow of Communist China” as justification for escalating the war in Vietnam at that time.

123 . Gittings, The World and China 1922 – 1972, p. 261. 124 . “Long Live the Victory of People’s War,” Peking Review , September 3, 1965. 125 . See Samuel S. Kim, “Mao Zedong and China’s Changing World View,” in

James C. Hsiung and Samuel S. Kim (eds.), China in the Global Community (New York: Praeger 1980), p. 32. The author notes that Mao at this time said that he “had not reached an opinion” on what constituted the principal con-tradiction in the world, which is what his worldview had been based on up to that juncture.

Notes ● 201

126 . Lin’s worldview was at odds with those of other members of the top leader-ship, but it was probably more a power struggle that resulted in his demise. See Suzanne Ogden, China’s Unresolved Issues: Politics, Development and Culture (Englewood Cliffs, NJ: Prentice-Hall, 1989), pp. 57–60.

127 . See Garver, Foreign Relations of the People’s Republic of China , p. 89. 128 . See Kim, “Mao Zedong and China’s Changing World View,” p. 33. 129 . Gittings, The World and China 1922 – 1872 , p. 264. 130 . “Chairman of Delegation of the People’s Republic of China Teng Hsiao-ping’s

Speech at the Special Session of the United Nations General Assembly,” Peking Review , April 12, 1974, pp. i–v.

131 . See King Chen (ed.), China and the Three Worlds: A Foreign Policy Reader (White Plains, NY: M. E. Sharpe, 1979) for details. According to the editor’s interpretation of Mao’s speeches, Third World leaders and scholars intended his main thesis about the three worlds for mass consumption. Also see “Third World Awakening and Growing Strong,” Peking Review , March 22, 1974.

132 . See Robert G. Sutter, U.S.-Chinese Relations: Perilous Past, Pragmatic Present (Lanham, MD: Rowman Littlefield, 2010), chapter 4.

133 . For details, see Frederick Teiwes and Warren Sun, The End of the Maoist Era: Chinese Politics during the Twilight of the Cultural Revolution, 1972-1976 (Armonk, NY: M. E. Sharpe, 2008), pp. 492–96.

134 . “Chairman Mao’s Theory of the Differentiation of the Three Worlds Is a Major Contribution to Marxism-Leninism,” Peking Review , November 4, 1977, pp. 10–41.

135 . Deng did not take Hua’s positions as head of the party or the government from Hua. But Deng’s agenda was approved by the Chinese Communist Party Central Committee, indicating Deng was in control. Hua lost his positions later to Deng’s prot é g é s. For details on how Deng wrested political power from Hua, see David Shambaugh, “Deng Xiaoping: The Politician,” in David Shambaugh (ed.), Deng Xiaoping: Portrait of a Chinese Statesman (London: Oxford University Press, 1995), pp. 74–81.

136 . Mao was severely criticized after his death for various mistakes and for killing and persecuting Chinese citizens. His Great Cultural Revolution was called a complete mistake. See “Resolution on Certain Questions in the History of Our Party since the Founding of the People’s Republic of China,” Beijing Review , July 6, 1981. For an analysis of this phenomenon, see Michael Yahuda, Toward the End of Isolationism: China’s Foreign Policy after Mao (New York: St. Martins, 1983), p. x.

137 . In 1984, Deng gave a speech and charged that China’s poverty and ignorance were the result the isolationism followed by China for 300 years from the mid-dle of the Ming Dynasty to the Opium War. Deng Xiaoping, Fundamental Issues , p. 79, cited in Yahuda, “Deng Xiaoping: the Statesman,” in Shambaugh (ed.), Deng Xiaoping: Portrait of a Chinese Statesman (Oxford, UK: Clarendon Press, 1995), pp. 149–50.

138 . It is worth noting here that the basis for and ideas in Mao’s “three worlds” theory had been put forward by Deng in 1974 and may have been his. See

202 ● Notes

“Chairman of Chinese Delegation Teng Xiao-ping’s Speech at Special Session of the U.N. General Assembly,” Peking Review , April 19, 1974, pp. 6–11. In this speech, Deng also stated that the socialist camp “is no longer in exis-tence.” In other words, the Communist view of the world that had had been accepted since Lenin was now out of date. See Yahuda, China’s Role in World Affairs , pp. 240–41.

139 . See Allen S. Whiting, “Foreign Policy of China,” in Roy C. Macridis (ed.), Foreign Policy in World Politics (Englewood Cliffs, NJ: Prentice-Hall, 1985), p. 262.

140 . See Ren Jiantao, “Ideology: Its Role in Reform and Opening,” in Joseph Fewsmith (ed.), China Today, China Tomorrow: Domestic Politics, Economy, and Society (Lanham, MD: Rowman & Littlefield, 2010), p. 182.

141 . Ibid., p. 183. Thus some have used the term “market Leninism” (which seems a contradiction) to explain Deng’s economics.

142 . One might argue that internationalism has been a main theme in Communist parlance. But globalism in China (or in Chinese) means something else. It has an economic framework. It reminds many of the Internet.

143 . China’s frequent reaction when its human rights record was criticized was to state that this was a domestic issue that China as a sovereign nation-state had jurisdiction over and it was not the right of other nations or organizations to make an issue of it.

144 . See Chan, Looking for Balance . Chan argues that China, like other countries, does not see the world in power-balancing terms and is motivated by economic growth opportunities.

145 . These concepts were practiced in China prior to the Ch’in Dynasty two cen-turies before Christ. Chinese know them from history, but have long discarded them in favor of China’s tribute diplomacy.

146 . See Suisheng Zhao, “Chinese Nationalism and Pragmatic Foreign Policy Behavior,” in Suisheng Zhao (ed.), Chinese Foreign Policy: Pragmatism and Strategic Behavior (Armonk, NY: M. E. Sharpe, 2005), p. 71.

147 . See Shambaugh, China Goes Global , pp. 56–58 for a discussion of various kinds of nationalism that fit China.

148 . Mao’s three worlds view was not discarded, some authors say because it was not Marxist, since it did not focus on class or socialist criteria, but instead was founded on state behavior in international relations. See Yahuda, Toward the End of Isolationism , p. 176. In any event, by the mid-1980s it was hardly even mentioned in discussions about foreign policy in China. See Harry Harding, China’s Second Revolution: Reform after Mao (Washington, DC: Brookings Institution, 1987), p. 243.

149 . It would seem oversimplistic to say that China had a worldview under Mao and lacked one under Deng and after. It may be best to say that probably China’s worldview was talked about too much during the Mao era and was not applied as much as it appeared, and under Deng it was the opposite. It may be that China lacked what may be called a “grand strategy”—defined as a logic or overarching vision about how to combine a large range of capabilities

Notes ● 203

and link them with military, economic, and military strategies, to seek inter-national goals. See Avery Goldstein, Rising to the Challenge: China’s Grand Strategy and International Security (Stanford, CA: Stanford University Press, 2005), p. 19. The author contends that China did not attain a grand strategy until the mid-1990s.

150 . For details, see Lucian W. Pye, “An Introductory Profile: Deng Xiaoping and China’s Political Culture,” in Shambaugh (ed.), Deng Xiaoping , pp. 32–35.

151 . One might argue that China’s foreign policy became more pragmatic after the Sino-Soviet border clash in 1969, which prompted China to seek a new rela-tionship with the United States and greater importance and a new look being given to national security. Later, in 1985 when Deng was clearly in power and his pragmatic ideas dominant in China, People’s Daily published an article say-ing that it would be unrealistic to think the writings of Marx and Lenin, writ-ten in the nineteenth century, could help solve today’s problems. The paper then retracted this. Deng also often cited Marx, Lenin, and Mao and promised to build socialism. His successors, Jiang Zemin and Hu Jintao, did likewise.

152 . This was seen as critical because the revolutionary state depends on ideol-ogy. Thus Deng’s China may be called a postrevolutionary era. See Brantly Womack, “The Party and the People: Revolutionary and Postrevolutionary Politics in China and Vietnam,” World Politics , July 1987, pp. 479–507.

153 . See Denny Roy, China’s Foreign Relations (Lanham, MD: Rowman and Littlefield, 1998), pp. 39–41.

154 . Wang, “International Relations Theory and the Study of Chinese Foreign Policy,” in Robinson and Shambaugh (eds.), Chinese Foreign Policy , p. 486.

155 . Deng’s perception of the world, it is said, was dominated by the need to resist Soviet expansionism (and the need to improve relations with the United States) to do so. Good relations with the United States were also a sin qua non for Deng’s economic reforms to work. To explain this in theoretical terms Deng simply underscored the part of Mao’s three-worlds view and its accompanying united front theory that emphasized the “good view” of the United States.

156 . Deng, it is said, lacked the Sino-centric view of the world Mao espoused. Thus he was more willing to accept the Western view of international relations. See Richard Evans, Deng Xiaoping and the Making of Modern China (New York: Viking, 1993), p. 23. The author attributes this to Deng’s foreign experi-ence, which Mao lacked. Also see Levine, “Perception and Ideology in Chinese Foreign Policy,” p. 41. Levine notes that China abandoned the role the Soviet Union had played in the 1920s and 30s in favor of being a country more in favor of status quo and in dealing with established political parties and govern-ments in other countries.

157 . See Quansheng Zhao, Interpreting Chinese Foreign Policy (Hong Kong: Oxford University Press, 1996), chapter 3.

158 . The idea that economic development would make China a big player in world politics was put forward by Mao. Mao never realized it; yet it could be said to be Mao’s thinking. On this point, see Gurtov and Hwang, China under Threat , p. 19.

204 ● Notes

159 . This happened in 1985. See Ren Xiao, “The International Relations Theoretical Discourses in China,” Asia Paper #09 (Sigur Center for Asian Studies), pp. 2–3. Hence, one of the most important of Deng’s actions was refuting Mao’s view that war was inevitable.

160 . See Kissinger, On China , p. 357. This, Kissinger notes, was part of China’s traditional view of the world.

161 . Ibid. 162 . See Barry Naughton, “Deng Xiaoping: The Economist,” in Shambaugh (ed.),

Deng Xiaoping , pp. 103–04. 163 . Deng Xiaoping: Speeches and Writings (Oxford: Permagon Press, 1987), p. 97

cited in Wang, “International Relations Theory and the Study of Chinese Foreign Policy,” in Robinson and Shambaugh (eds.), Chinese Foreign Policy , p. 487.

164 . It has been argued that the United States needed China at this time for eco-nomic reasons. The return on investments had fallen, Europe and Japan no longer served to stimulate the U.S. economy; the Vietnam War did (but at a tremendous cost politically and in terms of the balance of trade). Thus, Washington was ready (and willing) to accommodate China’s entrance into the global economy. For details, see Greg O’Leary, “China’s Foreign Relations: The Reintegration of China into the World Economy,” in Bill Brugger (ed.), China since the Gang of Four (New York: St. Martin’s Press, 1980), pp. 232–41.

165 . Kissinger called Deng’s strategy “offensive deterrence.” See On China , pp. 363–64. He argues that President Carter supported Deng in his invasion of Vietnam in early 1979 based on the fact he provided China with intelligence (from US spy satellites) on Soviet troop movements. Deng did not expect for-mal support or any kind of alliance from the United States but generally got what he wanted from Washington.

166 . See Margaret M. Pearson, “China’s Integration into the International Trade and Investment Regime,” in Elizabeth Economy and Michel Oksenberg (eds.), China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999), p. 161. Also see Harding, China’s Second Revolution , p. 244. The United States granting most-favored-nation status to China in 1980 was probably the most important agreement Deng attained. It reduced the tariffs on a number of Chinese products from 50 to 8 percent, including many that China exported to the United States and hoped to export more.

167 . This was formalized at the Twelfth Party Congress in 1982. It was reaffirmed at the Thirteenth Congress in 1987. See James C. Hsiung, “Peking’s Foreign Policy after the Thirteenth Party Congress: New Strategic Environment and Domestic Linkages,” in David S. Chou (ed.), Peking’s Foreign Policy in the 1980s (Taipei: Institute of International Relations, National Chengchi University, 1989), p. 57.

168 . Kissinger, On China , p. 487. Also see Sutter, Chinese Foreign Policy , p. 23. It is worth noting here that President Nixon had mentioned a five-power multipolar world when he visited China in 1972. See Time , January 3, 1972, cited in Choudhury, China in World Affairs , p. 77. At this time China was

Notes ● 205

concentrating on relations with the Soviet Union and the United States and China seemed to be playing a “fulcrum” or balancer role. This came up again in 1982, when Deng calculated that China had leaned too far into the US camp at which time he announced an “independent foreign policy.” By 1982 Deng faced a serious backlash at home due to the tectonic policy changes he had made. Deng was criticized for becoming too close to the United States, which, his opponents said, endangered China’s flexibility in foreign affairs, its hope of getting Taiwan back, and much more. So Deng announced what he termed a “new foreign policy direction,” or at least a major shift in thrust toward dealing with foreign countries, especially the United States and the Soviet Union. It was called China’s “independent foreign policy.” It was also called a “neutral foreign policy.” The gist of the new policy was that China would no longer align with the United States against the Soviet Union. In strategic or theoretical terms it put China in the “fulcrum” position in the US-Soviet Union-China triangle. On September 1, 1982, at the Chinese Communist Party’s National Party Congress, General Secretary Hu Yaobang included a chapter in his report on China’s independent foreign policy. Mentioned were the Five Principles of Peaceful Coexistence and an effort by China to improve relations with all countries, including socialist ones. See Hu Yaobang, “Create a New Situation in All Fields of Socialist Modernization,” Beijing Review , September 13, 1982, pp. 29–33. For details on the significance of this policy shift in ensuing years, see various chapters in James C. Hsiung (ed.), Beyond China’s Independent Foreign Policy: Challenges for the U.S. and Its Allies (New York: Praeger, 1985). This policy indeed helped promote better relations with the Soviet Union. Tension with Moscow had not been produc-tive for China. Finally, it shifted China’s emphasis in carrying on external relations separate from strategic issues and toward economic issues. It made China’s view of the world more global. Deng saw the need for a more indepen-dent view of the world and from 1982 on viewed the world as changing due to the end of the Cold War. As it turned out this “shift” was mostly nominal and did not hurt China’s relations with the United States, as Washington did not consider Deng’s policy announcement as anti-American or a major move away from its current policy. Alternatively, the United States felt China’s shift did not constitute a threat in view of the Soviet Union’s now more friendly and less threatening mien toward the United States. See Hongqian Zhu, “China and the Triangular Relationship,” in Yufan Hao and Guocang Huan (eds.), The Chinese View of the World (New York: Pantheon Books, 1989), p. 42. The author states that a change in the Soviet Union’s behavior toward China was largely responsible. Another writer states that the reasons were on the one hand President Reagan’s military buildup “held in check” Soviet expansion-ism and Reagan’s Taiwan policy on the other that troubled China. See Robert G. Sutter, Shaping China’s Future in World Affairs: The Role of the United States (Boulder, CO: Westview Press, 1996), p. 31.

169 . Kissinger, On China , p. 391. 170 . Ibid., p. 392.

206 ● Notes

171 . Wang, “International Relations Theory and the Study of Chinese Foreign Policy,” p. 486.

172 . Tang Shiping, “From Offensive to Defensive Realism: A Social Evolutionary Interpretation of China’s Security Strategy,” in Robert S. Ross and Zhu Feng (eds.), China’s Ascent: Power, Security, and the Future of International Politics (Ithaca, NY: Cornell University Press, 2008), p. 154.

173 . Thomas J. Christensen, “Chinese Realpolitik,” Foreign Affairs , September/October 1996 reprinted in Guoli Liu (ed.), Chinese Foreign Policy in Transition (New York: Aldine De Gruyter, 2004), p. 59.

174 . Deng, China’s Struggle for Status , pp. 44–45. 175 . Schwartz, Communism in China , pp. 233–34. 176 . See Sutter, Chinese Foreign Relations , p. 23 and p. 66. 177 . Ibid., p. 5. 178 . One can certainly not argue that Deng did not have the prestige or the author-

ity to coin a new worldview. See Michael Yahuda, “Deng Xiaoping: The Statesman,” in Shambaugh (ed.), Deng Xiaoping , p. 143. One could also make this judgment from the many foreign policy initiatives Deng made soon after coming to power. See Greg O’Leary, “China’s Foreign Relations,” pp. 231–32.

179 . Kissinger, On China , p. 438. 180 . Ezra F. Vogel, Deng Xiaoping and the Transformation of China (Cambridge,

MA: Belknap Press, 2011), p. 714. 181 . For details on Jiang’s life and the Jiang Zemin era, see Gilley, Tiger on the

Brink and Willy Wo-Lap Lam, The Era of Jiang Zemin (Singapore: Prentice Hall, 1999).

182 . See Lam, The Era of Jiang Zemin , chapter 1. 183 . According to one writer, Jiang consolidated his position and became China’s

unquestioned top ruler during the period 1993–96. See Gilley, Tiger at the Brink , p. 334.

184 . Western commentators have noticed that he seemed oblivious to the so-called vision thing. See Lam, The Era of Jiang Zemin , p. 265. Jiang did, however, on one occasion mention seeing the world as tripolar in structure—with the United States, the European Union, and Asia (led by China) as constituting the three poles. See p. 320. Kissinger writes that Jiang “made no claim to philosophical preeminence” and was the “least Middle Kingdom-type” that he had encountered among Chinese leaders. See Kissinger, On China , p. 449.

185 . Jiang yielded to and often accepted the views of Foreign Minister Qian Qichen and Premier Zhu Rongji. See Kissinger, On China , p. 450. Before Deng died in 1997 Jiang was on his own. Deng’s failing health had resulted in little being said about China’s worldview at a time when its foreign policy and foreign aid were seeing vast changes. Thus Deng’s final years were characterized by compromise and efforts to build consensus. See Goldstein, Rising to the Challenge , p. 23.

186 . Lam, The Era of Jiang Zemin, chapter 6. 187 . Gilley, Tiger on the Brink, p. 268 and p. 270. 188 . Ibid., p. 267–74.

Notes ● 207

189 . Ibid., p. 284. 190 . See Joseph Y. S. Cheng and Zhang Wankun, “Patterns and Dynamics of

China’s International Strategic Behavior,” in Zhao (ed.), Chinese Foreign Policy , pp. 180–82.

191 . Robert Lawrence Kuhn, The Man Who Changed China: The Life and Legacy of Jiang Zemin (New York: Crown Publishers, 2004, p. 360.

192 . Sutter, Chinese Foreign Policy , p. 66. Kissinger wrote that Chinese leaders acknowledged the unipolar nature of the system, but expected it to evolve toward a multipolar one, which would not be to such an advantage to the United States, in the future. See Kissinger, On China , pp. 463–64.

193 . John R. Faust and Judith F. Kornberg, China in World Politics (Boulder: CO: Lynne Rienner, 1995), p. 208.

194 . Lam, The Era of Jiang Zemin , pp. 169–70. 195 . Ibid., p. 171. 196 . Some observers saw the emphasis on virtue and benevolence as suggest-

ing a return of China’s traditional way of looking at the world. See Lowell Dittmer, “On China’s Rise,” in Womack (ed.), China’s Rise in Historical Perspective , p. 40.

197 . See Gerald Chan, Chinese Perspectives on International Relations: A Framework for Analysis (New York: St. Martin’s Press 1999), p. 146.

198 . Clinton’s national security advisor, Anthony Lake, called China a “reactionary backlash state.” China responded in kind. This standoff may have precipitated two crises over Taiwan and a very negative reaction from China in 1999 when the United States bombed the Chinese Embassy in Belgrade. Jiang said at the time: “The great People’s Republic of China will never be bullied, the great Chinese nation will never be humiliated, and the great Chinese people will never be conquered.” See Warren Christopher, Chances of a Lifetime (New York: Scribner, 2001), p. 237.

199 . China’s economic growth in 1992 and after surpassed its record during the 1980s. The connection between this and China expanding its foreign aid is discussed in following chapters.

200 . Chan, Chinese Perspectives on International Relations , p. 56. The author notes that, unlike Japan, Chinese international relations scholars have not copied Western theory to any extent but have tried to build international relations theory with “Chinese characteristics.”

201 . Ibid., p. 44. 202 . Cited in ibid, pp. 37–38. 203 . Shambaugh, China Goes Global , pp. 174–75. 204 . Zhu Rongji’s Answers to Journalists’ Questions , chapter 5, cited in Kissinger,

On China , p. 480. 205 . Shambaugh, Chinese Goes Global , p. 175. 206 . Jacques, When China Rules the World , pp. 319–20. 207 . For details on the Hu era, see Willy Wo-Lap Lam, Chinese Politics in the Hu

Jintao Era: New Leaders, New Challenges (Armonk, NY: M. E. Sharpe, 2006).

208 ● Notes

208 . See Zhongqi Pan, “China’s Changing Image of and Engagement in World Order,” in Guo and Blanchard (eds.), “Harmonious World” and China’s New Foreign Policy , p. 56.

209 . Cheng and Zhang, “Patterns and Dynamics of China’s International Strategic Behavior,” p. 186 and Lam, Chinese Politics in the Hu Jintao Era , p. 166.

210 . See “Hu Makes 4-Point Proposal for Building Harmonious World,” Xinhua, September 16, 2005, and “Hu: China Will Adhere to Peaceful Development,” Xinhua, September 16, 2005.

211 . Jean-Marc F. Blanchard and Sujian Guo, “Introduction: ‘Harmonious World’ in China’s New Foreign Policy,” in Guo and Blanchard (eds.), “Harmonious World,” pp. 2–6.

212 . Dittmer, “On China’s Rise,” in Womack (ed.) China’s Rise in Historical Perspective , p. 40.

213 . China does not want to challenge the United States, but would like a world system that is not dominated by Western countries that seek to promote democracy, but one that rather is democratic—meaning all countries, espe-cially developing countries, have a larger voice. It would mean that human rights would be defined differently. It would mean more equal access to raw materials.

214 . Zheng Bijian, “China’s ‘Peaceful Rise’ to Great Power Status,” Foreign Affairs , September/October 2005, p. 22.

215 . Kissinger, On China , pp. 498–500. Interestingly the next year the government in China initiated a public debate with a 12-part television series on this issue. Called the “Rise of the Great Powers,” the program dealt with various aspects of China’s “moment in history.”

216 . Lam, Chinese Politics in the Hu Jintao Era , p. 160. 217 . Douglas E. Schoen and Melik Kaylan, The Russia-China Axis: The New Cold

War and America’s Crisis of Leadership (New York: Encounter Books, 2014), p. 175.

218 . Lam, Chinese Politics in the Hu Jintao Era , p. 161. 219 . See “Hu Jintao’s report at 17th Party Congress,” Xinhua, October 24, 2007. 220 . Jean-Marc F. Blanchard and Sujian Guo, “Introduction in Guo and Blanchard

(eds.), “Harmonious World,” p. 5. 221 . Shang Ding, “To Build a ‘Harmonious World’: China’s Soft Power Wielding

in the Global South,” in Guo and Blanchard (eds.), “Harmonious World,” p. 108.

222 . Kissinger, On China , p. 501. 223 . China immediately provided South Korea with $26 billion in a currency swap

deal and Southeast Asian countries with investments and credit money. See Sutter, Chinese Foreign Relations , p. 86. China had already increased its for-eign aid (including investments in Africa, Latin America, and elsewhere) and continued to do so as will be seen in following chapters.

224 . Jacques, When China Rules the World , p. 407. 225 . Ibid.

Notes ● 209

226 . See Stefan Halper, The Beijing Consensus , p. 5. 227 . Willy Lam, China’s Quasi-Superpower Diplomacy: Prospects and Pitfalls

(Washington, DC: Jamestown Foundation, 2009), p. 8. Also see Willy Lam, “Beijing Launches Diplomatic Blitz to Steal Obama’s Thunder,” China Brief , February 20, 2009.

228 . Stephen Olson and Clyde Prestowitz, The Evolving Role of China in International Institutions (Report prepared for the U.S.-China Economic and Security Commission of the U.S. Congress), January 2011, p. 14.

229 . Ibid., pp. 88–89. 230 . See Halper, The Beijing Consensus , p. 32. Also see further details in

Chapter 3. 231 . For the use of the term superfusion, see Zachary Karabell, Superfusion: How

China and America Became One Economy and Why the World’s Prosperity Depends on It (New York: Simon and Schuster, 2009). For the term “eco-nomic deterrence,” see Graham Allison, “Keeping China and the United States Together,” in Richard Rosecrance and Gu Guoliang (eds.), Power and Restraint: A Shared Vision for the U.S.-China Relationship (New York: Public Affairs, 2009), p. xiii.

232 . Kissinger, On China , p. 507. 233 . Dai Bingguo, Persisting in Taking the Path of Peaceful Development (Beijing:

Ministry of Foreign Affairs, 2010). 234 . Cited in Kissinger, On China, pp. 499–500. 235 . Sutter, China’s Rise in Asia , p.7. 236 . “China Confirms Leadership Change,” BBC News, November 15, 2012

(online at bbc.com). 237 . Zhu Feng, “The World According to Xi,” Project Syndicate, December 24,

2012 (online at plroject-syndicate.org). 238 . Timothy Heath, “The 18th Party Congress World Report: Policy Blueprint

for the Xi Administration,” China Brief, November 30, 2012 (online at Jamestown.org).

239 . Elizabeth C. Economy,” China’s Imperial President: Xi Jinping Tightens His Grip,” Foreign Affairs , November/December 2014, pp. 88–89.

240 . Xi Jinping, The Governance of China (Beijing: Foreign Languages Press, 2014). See in particular pp. 298–99 and p. 490.

241 . In contrast Western aid programs find their origins in missionary work and later governmental efforts to deal with the less wholesome aspects of colonial-ism and thus appear more like charity and/or efforts to facilitate the welfare of the society of the recipient.

242 . Tribute countries were geographically proximate to China. Still this does not explain the fact that they received China’s aid early and in some cases, espe-cially North Korea and Vietnam, it was so large. This point will be pursued in following chapters.

243 . One scholar notes that Southeast Asians, in particular, distinguish between power and influence and seek to balance the United States, which has more

210 ● Notes

of the former, with China, that represents the latter. See David Shambaugh, “China Engages Asia: Reshaping the Regional Order,” International Security , Winter 2004/05, p. 66. Some argue that the hedging theory very well describes Asian nations’ policies that are divided between playing to China’s views of the world while maintaining good relations with the United States. For a discus-sion on this point, see Bronson Percival, The Dragon Looks South: China and Southeast Asia in the New Century (Westport, CT: Praeger, 2007), p. 21.

244 . See Jacques, When China Rules the World , p. 419. 245 . Schwartz, Communism and China , p. 237. 246 . In China’s world historically the government sought harmony in the “Big

Family.” Mao sought uniformity in political outlook, which was not too dif-ferent. See Terrill, The New Chinese Empire , p. 125.

247 . Put another way, China was focused on supporting communism (both at home and abroad and the two connected) and its security. See Deborah Brautigam, Chinese Aid and African Development: Exporting Green Revolution (New York: St. Martins, 1998), p. 38.

248 . It is worth pointing out that China was both getting (from the Soviet Union) and giving foreign assistance at the same time. This did not seem to be a contradiction to Mao; it could be explained by the fact he saw intra-Communist Bloc relations as prevailing over relations with other blocs or nations. On the other hand, China’s aid to both North Korea and North Vietnam also mirrored China’s traditional worldview; thus it seems hardly a coincidence that both countries were in the past tribute-bearing nations. This point is discussed at greater length in the context of assessing this aid in subsequent chapters.

249 . This, one might say, resembled extending China’s tribute system to more dis-tant peoples in the past. Historically, the tribute system expanded in scope with increases in China’s prosperity, military power, and other measures of influence. See Mosher, Hegemon , pp. 29–30.

250 . Details will be provided in the next chapter. China may have granted aid to some countries other than North Korea before 1954, namely North Vietnam, which did not become official until later.

251 . For details, see John Gittings, The World and China, 1922-1972 , chapter 10. 252 . In 1957, as noted earlier, China shifted back to a hardline policy. There was

no change in worldview, however. And this was temporary. China’s foreign aid giving remained attuned to Mao’s worldview, not its momentary reversion to a tough foreign policy.

253 . China’s anti-Soviet perspective had already been made part of its worldview in it announcing intermediate zones and elaborating on this thesis. In 1962, Mao described Soviet leaders as “beyond redemption.” In 1964, he spoke of the Soviet Union as being China’s main enemy and China’s relationship with the Soviet Union as being the main contradiction facing China. See Gittings, The World and China 1922-1972 , pp. 254 and 256.

254 . Again one can argue that this happened various times in Chinese history with the tribute system.

Notes ● 211

255 . I am using China’s official aid in this case and North Korea is excluded since it is not categorized as a Third World country. In so counting, China exceeded its aid giving in any previous year in 1964. It extended aid to 14 countries; the highest number of countries that received aid in one year; prior to that it was 8. See Copper, “China’s Foreign Aid Program: An Analysis and Update,” p. 502.

256 . This issue is discussed at length in Volume 1, Chapter 4 . 257 . Copper, “China’s Foreign Aid Program: An Analysis and Update,” p. 502.

Official aid here, of course, does not include China’s arms aid and its aid to North Korea and North Vietnam, which was generally unannounced.

258 . Ibid. 259 . Brautigam, Chinese Aid and African Development , p. 38. 260 . Copper, “China’s Foreign Aid Program: An Analysis and Update,” p. 502. 261 . This reached a high point when two countries vied strenuously for support

of their policies at the second Afro-Asian Conference in Algeria in 1965 and competed fiercely with foreign aid to do this. This will be discussed at length in following chapters.

262 . There, of course, is a caveat: there is contradictory evidence to cite, namely that China’s aid giving did not precisely reflect its leaders view of the world. There are a host of reasons for this and some of them need to be discussed. China’s worldview has at times been slow in evolving and has often followed events rather than leading them, even though it should have been the other way around. There is an explanation: According to Lenin, the truth of doctrine is demonstrated by its successful application. Mao agreed. For several years, because of China being in a transition phase from alignment with the Soviet Union to a “gear shifting” phase and finally breaking with the Soviet Union its view of the world and its foreign policy were in a state of flux.

Mao for some time hoped that he could persuade the Soviet Union to abandon peaceful coexistence and take a harder stance toward the United States and Western imperialism and agree to China’s worldview. It is also interesting to note that China’s, namely Mao’s, worldview was also influenced by some variables that seem difficult to impossible to explain. Mao was influ-enced by numbers, numerology some would say, and this has been offered as a partial explanation of how he viewed the world. Notable was Mao’s counting heads in setting forth a list of China’s friends and enemies, which arguably influenced Mao’s ideas about intermediate zones. See Gittings, The World and China 1922-1972 , p. 234.

263 . Deng and China’s new leaders were appalled by the fact China’s foreign aid (including military aid) had taken 5 percent of government expenditures dur-ing the period 1967 to 1976; this could not continue. See Brautigam, The Dragon’s Gift , p. 52.

264 . This point is discussed in detail in Volume 1, Chapter 4 . 265 . This issue is discussed at greater length in Volume 1, Chapter 3 . 266 . For the most part these principles had been enunciated in Zhou Enlai’s eight

aid principles stated in 1964; thus there was little new in them. What was noteworthy was what statements or promises did not accompany them.

212 ● Notes

267 . In Zimbabwe, one of the countries Zhao visited, 5,000 people greeted him at the airport. Five were trampled to death, sixty-four were injured, and scores fainted in the melee. For details, see FBIS January 3, 1983 and Beijing Review , January 24, 1983, p. 19.

268 . Beijing Review , September 5, 1983, p. 18. 269 . Shi Lin, Zhongguo de Duiwai Jingji Hezuo [China’s Current Economic

Cooperation with Foreign Countries] (Beijing: China Social Science Press, 1989), p. 68.

270 . Brautigam, The Dragon’s Gift , p. 52. 271 . Jacques, When China Rules the World , p. 320. 272 . Shambaugh, China Goes Global , p 176. 273 . Ibid., p. 177. 274 . Ibid., pp. 178–79. These predictions were made by Western firms, but were

confirmed by the Ministry of Foreign Commerce that anticipated a 17 percent annual increase.

275 . Shambaugh, China Goes Global , p. 126.

3 China’s Economy and Its Foreign Aid and Investment Diplomacy

1 . Relating this to China’s view of itself and its role in the world, see Mark Mancall, China at the Center: 300 Years of Foreign Policy (New York: Free Press, 1984), pp. 8–9.

2 . Ibid., p. 9. 3 . Ibid., p. 8. China’s Grand Canal was a remarkable feat of engineering begun in

the seventh century. It was 1,700 kilometers in length and linked Hangzhou with Beijing. It alleviated drought in the north, controlled the Yellow River, and facilitated trade.

4 . Chinese regard the nineteenth century as recent history. In 1820, China pro-duced around a third of the world’s gross national product—more than the United States, Western Europe, and Eastern Europe combined. See Angus Maddison, The World Economy: A Millennial Perspective (Paris: OECD, 2006), pp. 261–63.

5 . The importance of trade in expanding China’s power and influence can be seen in the fact that Chinese products were found in Central Asia, Southeast Asia, the Middle East, and even Europe. China imported jade, meat, music, Buddhism, and much more thus adding to its standard of living and its cul-ture. See Mancall, China at the Center , pp. 9–10.

6 . David Shambaugh, China Goes Global: The Partial Power (New York: Oxford University Press, 2013), p. 309.

7 . For details on this period see Alexander Eckstein, China’s Economic Revolution (Cambridge: Cambridge University Press, 1977), chapter 1.

Notes ● 213

8 . In 1952, China had 0.7 acres of cropped land per capita compared to 2.3 in the Soviet Union. See A. James Gregor, Marxism, China, & Development: Reflections on Theory and Reality (New Brunswick, NJ: Transaction Publishers, 1995), p. 81.

9 . See Alexander Eckstein, China’s Economic Development: The Interplay of Scarcity and Ideology (Ann Arbor: University of Michigan Press, 1976), pp. 10–11. This was well below the United States, the United Kingdom, the Soviet Union, and even Japan, when those countries sought successfully to promote economic growth.

10 . Yuan-li Wu, An Economic Survey of Communist China (New York: Bookman Associates, 1956), pp. 12–13.

11 . See Yuan-li Wu, The Economy of Communist China: An Introduction (New York: Praeger, 1965), pp. 5–17 for details on Mao’s plans and how they dif-fered from that of capitalist, pluralist nations.

12 . John G. Gurley, China’s Economy and Maoist Strategy (New York: Monthly Review Press, 1976), p. 5. Gurley notes that Mao believed that economic devel-opment could happen only within the context of the development of human beings, assumed egalitarianism, and rejected trickle-down economics.

13 . Eckstein, China’s Economic Development , p. 12. 14 . See Audrey G. Donnithorne, China’s Cellular Economy: Some Economic Trends

after the Cultural Revolution (London: Eastern Press, 1973). 15 . See Nai-ruenn Chen and Walter Galenson, The Chinese Economy under

Communism (Chicago: Aldine Publishing Co., 1969), chapter 8. 16 . See John F. Copper, China’s Global Role: An Analysis of Peking’s National

Power Capabilities in the Context of an Evolving International System (Stanford: Hoover Institution Press, 1980), p. 63 for a further discussion of this point.

17 . China’s population growth at this time was around 2 percent annually, which meant 12 million more people were added to the population each year. This was higher than the Soviet Union or India. See Ta-chung Liu and Kung-chia Yeh, The Economy of the Chinese Mainland: National Income and Economic Development (Princeton, NJ: Princeton University Press, 1965), p. 102.

18 . See Jan S. Prybyla, The Chinese Economy (Columbia: University of South Carolina Press, 1978), chapter 2.

19 . Gregor, Marxism, China, & Development , pp. 81–82. 20 . Maria Hsia Chang, The Labors of Sisyphus: The Economic Development of

Communist China (New Brunswick, NJ: Transaction Publishes, 1998), pp. 51–55.

21 . Chu-yuan Cheng, Communist China’s Economy, 1949–1962: Structural Changes and Crisis (South Orange, NJ: Seton Hall University Press 1963), pp. 157–58.

22 . This point is discussed further in Volume 1, Chapter 4 . 23 . Prybyla, The Chinese Economy , p. 183. 24 . This point is discussed in detail later in the chapter.

214 ● Notes

25 . Eckstein, China’s Economic Revolution , pp. 120–21 and 125–26. 26 . Eckstein, China’s Economic Development , p. 15. 27 . Eckstein, China’s Economic Revolution , pp. 54–58. 28 . Gregor, Marxism, China & Development , pp. 79–82. 29 . Chang, The Labors of Sisyphus , p. 54. According to another source, Mao was

shown to have “feet of clay” and had to admit that he knew nothing about eco-nomics. See John King Fairbank and Merle Goldman, China: A New History (Cambridge: Harvard University Press, 1998), p. 373.

30 . During 1967 and 1968, industrial output declined 30 billion Yuan in value. Crude iron production fell from 15 million tons in 1966 (when the Cultural Revolution started) to 9.08 million tons in 1968. In 1967 and 1968 the agri-cultural and industrial sectors lost 10 and 4 percent of their output. See Yiu-chung Wong, From Deng Xiaoping to Jiang Zemin: Two Decades of Political Reform in the People’s Republic of China (Lanham, MD: University Press of America, 2005), p. 60. The author cites data from China Statistical Yearbook.

31 . Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge: MIT Press, 2007), pp. 75–76.

32 . See A. Doak Barnett, China’s Economy in Global Perspective (Washington, DC: Brookings Institution, 1981). According to the author, China’s GNP fell from US$145 billion in 1959 to US$112 billion in 1961. See p. 17.

33 . See Maurice Meisner, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese Socialism, 1975–1994 (New York: Hill and Wang, 1996), p. 188.

34 . The Planetary Product in 1974 (Washington: U.S. Department of State, November 1973). According to this report, China’s economy grew at 3.8 per-cent from 1955 to 1960 (compared to the world’s average of 4.5), 3.9 percent from 1960 to 1965 (world’s average was 5.0), 5.2 percent from 1965 to 1970 (world’s average was 5.4 percent) and 4.7 percent from 1970 to 1974 (world’s average was 4.7 percent).

35 . Donald Zagoria, “China’s Quiet Revolution,” Foreign Affairs , April 1984, p. 881.

36 . Ted Fishman, China Inc.: How the Rise of the Next Superpower Challenges America and the World. (New York: Scribner, 2005), p. 126.

37 . Tianyong Zhou, The China Dream and the China Path (Singapore: World Scientific, 2013), p. 2.

38 . Ibid. 39 . Handbook of Economic Statistics (Washington: Central Intelligence Agency,

1978). 40 . Handbook of Economic Indicators (Washington: Central Intelligence Agency,

1977) and A. H. Usack and R. E. Batsavage, “The International Trade of the People’s Republic of China,” in The People’s Republic of China: An Economic Assessment and Far Eastern Economic Review , March 4, 1977.

41 . Angus Maddison, The World Economy: A Millennial Perspective (Paris: Organization for Economic Cooperation and Development, 2001), p. 263.

42 . The Planetary Product in 1974 (Washington: U.S. Department of State, 1975).

Notes ● 215

43 . For details, see Maurice Meisner, The Deng Xiaoping Era , chapter 4. 44 . Mao, in order to regain his authority after the Great Leap debacle, destroyed

the Party and government during the Cultural Revolution. Millions were per-secuted. The Cultural Revolution launched in 1965–66 lasted until Mao died in 1976. Mao’s designs for economic and social change were destroyed in the process, but neither new plans nor constituencies for supporting it were created. See Dwight H. Perkins, “China’s Prereform Economy in World Perspective,” in Brantley Womack (ed.) China’s Rise in Historical Perspective (Lanham, MD: Rowman Littlefield, 2010), pp. 123–24.

45 . This is why Deng was able to “lead behind the scenes” in terms of making economic reforms. See David S. G. Goodman, Deng Xiaoping and the Chinese Revolution (London: Routledge, 1994), p. 91. Also see Richard Evans, Deng Xiaoping and the Making of Modern China (New York: Viking, 1993), p. 311. It is worth noting that some had observed that when Deng came back after in 1975 being purged, the economy grew by 11.1 percent—the best perfor-mance of any year during the Cultural Revolution. In 1976, when Deng was purged again it fell to 1.7 percent. Also see Wong, From Deng Xiaoping to Jiang Zemin, p. 60.

46 . Naughton, The Chinese Economy , p. 86. The author notes that Chinese lead-ers did not concern themselves with political or ideological issues very much, unlike the Soviet Union and the Eastern European countries. They saw their main objective as responding to unmet needs. Economic development, he says, was the central focus of the party and the government—replacing class strug-gle. See Barry Naughton, “The Dynamics of China’s Reform-Era Economy,” in Brantley Womack (ed.), China’s Rise in Historical Perspective , p. 131.

47 . Deng died in 1997, having been in charge of China’s economy for 19 years. But his successors continued his policies; therefore, most of what Deng did is still working to make China’s economy grow.

48 . Data to prove this point will be provided in following pages. 49 . For details, see Barry Naughton, The Chinese Economy, chapter 10. 50 . Meisner, The Deng Xiaoping Era , pp. 222–26. 51 . William H. Overholt, The Rise of China: How Economic Reform is Creating a

New Superpower (New York: W. W. Norton, 1993), p. 33. 52 . Fred C. Bergsten Bates Gill, Nicholas R. Lardy, and Derek Mitchell. China:

The Balance Sheet (New York: Public Affairs, 2006), p. 24. Many of the state-owned enterprises earned less than the cost of their capital not to mention that they produced goods that could not be sold outside of China due to their poor quality and they did considerable damage to the environment.

53 . By 2007, the SOEs that remained were making profits to the tune of $200 bil-lion per year or more than 6 percent of the GDP. See Edward Tse, The China Strategy: Harnessing the Power of the World’s Fastest Growing Economy (New York: Basic Books, 2010), p. 37.

54 . For details on China’s industrialization under Deng, see Naughton, The Chinese Economy , chapter 13.

55 . Overholt, The Rise of China, p. 45.

216 ● Notes

56 . Tse, The China Strategy , p. 61. 57 . Bergsten et al., China: The Balance Sheet , pp. 19–20. 58 . China (Paris: Organization for Economic Cooperation and Development,

2005), p. 21. Another factor that made China’s labor more productive was the high rate of literacy in China and the low rate of gender differences (73 percent of females were literate compared to 38 percent in India). This was especially helpful in attracting foreign companies producing computers and electronic products. See Bergsten et al., China: The Balance Sheet , p. 22.

59 . Willem Van Kemenade, China, Hong Kong, Taiwan, Inc. (New York: Doubleday, 1997), p. 258. Also see Prem Shankar Jha, Crouching Dragon, Hidden Tiger: Can China and India Dominate the West? (New York: Soft Skull Press, 2010). Jha believes that the decentralization of economic planning and a change in those responsible for investment facilitated China’s economic miracle.

60 . Ibid., p. 260. 61 . Marc Blecher, “Sounds of Silence and Distant Thunder: The Crisis of

Economic and Political Administration,” in David S. G. Goodman and Gerald Segal (eds.), China in the Nineties: Crisis Management and Beyond (Oxford: Clarendon Press, 1991), pp. 36–44.

62 . Meisner, The Deng Xiaoping Era , pp. 260–70. 63 . Overholt, The Rise of China, pp. 46–47. 64 . Naughton, The Chinese Economy , chapter 13. 65 . Overholt , The Rise of China , p. 48. 66 . Ibid., p. 74. 67 . Angus Maddison, Chinese Economic Performance: The Long View (Paris:

Organization for Economic Cooperation and Development, 2007), p. 89. 68 . Deng’s economic “genius” was, it is said, that he appropriately did not develop

an overall economic plan, kept his hands off most of the time, and inter-vened only when necessary. He also sought good advice and listened. See Barry Naughton, “Deng Xiaoping: The Economist,” in David Shambaugh (ed.), Deng Xiaoping: Portrait of a Chinese Statesman (Oxford: Clarendon Press, 1995), p. 84.

69 . After a decade or so after 1984, China’s People’s Liberation Army became the largest commercial entity in China setting up 20,000 companies with a profit of $5 billion. By one estimate half of China’s military personnel were engaged in commercial activities. See John Naisbitt, Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World (New York: Simon and Schuster, 1996), p. 27.

70 . See Fei-ling Wang, “Beijing’s Incentive Structure: The Pursuit of Preservation, Prosperity and Power,” in Yong Deng and Fei-ling Wang (eds.), China Rise: Power and Motivation in Chinese Foreign Policy (Lanham, MD: Rowman Littlefield, 2005), p. 32.

71 . Kemenade, China, Hong Kong, Taiwan, Inc. The author notes that Hong Kong helped transform China from “Mao-worshipping blue ants” and Taiwan had

Notes ● 217

a synergetic impact on China. See p. x. He also argues that Mao had political reasons for emulating Hong Kong and Taiwan: to eventually incorporate them into China.

72 . Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New World Order (New York: Penguin, 2012), p. 156.

73 . In 1993, for example, Taiwan’s foreign exchange reserves reached $85.6 billion—the highest of any country in the world. See The Republic of China Yearbook, 1994 (Taipei: Government Information Office, 1994), p. 3.

74 . The figures on foreign investments in China from Japan and the Four Dragons vary considerably. According to one writer, between 1980 and 1996 Japan invested $14.6 billion in China; the Four Dragons invested $34.6 bil-lion. See Xiaomin Rong, “Explaining the Patterns of Japanese Foreign Direct Investment in China,” Journal of Contemporary China , March 1999, p. 132. In addition to its investments in China, Japan has provided an estimated $34 billion in development aid to China. See Fareed Zakaria, “Does the Future Belong to China? Newsweek , November 3, 2008.

75 . Sterling Seagrave, Lord of the Rim: The Invisible Empire of the Overseas Chinese (New York: G. P. Putnam’s Sons, 1995), pp. 2–3. The author includes Taiwan in this figure. He compares the $2 trillion figure with Japan’s (with about twice as many people), $3 trillion.

76 . “Overseas Chinese Firms Awarded for Contributions to China’s Economy,” People’s Daily , September 29, 2003, cited in David M. Lampton, The Three Faces of Chinese Power: Might, Money and Minds (Berkeley: University of California Press, 2008), p. 85.

77 . It is worth noting here that during the Ming Dynasty (1368–1644) China terminated its exploration and much of its trade and other contacts with the outside world. During the subsequent Qing Dynasty (1644–1911) China gen-erally banned or at least discouraged trade and other commerce with the out-side world and as a result fell behind Europe, the United States, and Japan. Most Chinese are aware of this history. One author describes Deng’s view as compared to Mao’s this way: Mao’s thinking was autarkic, isolationist, peas-ant thinking. Deng’s was open door and turned China into a trading and naval power. See Kemenade, China, Hong Kong, Taiwan, Inc. , p. 260.

78 . Samuel S. Kim, “China’s Path to Great Power Status in the Globalization Era,” in Guoli Liu (ed.), Chinese Foreign Policy in Transition (New York: Aldine de Gruyter, 2004), p. 359. This chapter was originally published in Asian Perspective in 2003.

79 . Overholt, The Rise of China , p. 49. 80 . Some of course, exaggerated this. Lester Brown wrote an article in 2005 titled

“China Replacing the United States as World’s Leading Consumer.” The Earth Policy Institute in Washington, DC published this on February 16. (See www.earth-policy.org/Update45.htm ) The World Bank at this time predicted China would contribute 15.8 percent of the world’s growth between 2004 and 2020. See L. Alan Winters and Shih Yusef (eds.), Dancing with Giants (Washington,

218 ● Notes

DC: World Bank and Institute of Policy Studies, 2007), p. 6. China’s rank among the “trading powers” during this period rose markedly, from number 32 in the world in 1978 to number 10 in 1995. See Kemenade, China, Hong Kong and Taiwan, Inc. , p. 33.

81 . Bergsten et al., China’s Rise , p. 9. 82 . Susan L. Shirk, China: Fragile Superpower (London: Oxford University Press,

2007), p. 19. 83 . Sarah Y. Tong and John Wong, “China’s Economy,” in Robert E. Gamer

(ed.), Understanding Contemporary China (third edition) (Boulder, CO: Lynne Rienner, 2008), p. 119.

84 . “China Overtakes the U.S. in Exports,” Associated Press, April 12, 2007 (online at lexisnexis.com). This happened in the last half of 2006.

85 . Tse, The China Strategy , p.39. It is worth noting that more than half of China’s exports were accounted for by foreign-funded enterprises: $790.6 billion of a total of $1.43 trillion.

86 . Overholt, The Rise of China, pp. 30–31. 87 . Growth that year was 3.9 percent. See China Statistical Yearbook 1990. 88 . See Bruce Gilley, Tiger on the Brink: Jiang Zemin and China’s New Elite

(Berkeley: University of California Press, 2005), chapter 6. 89 . Evans, Deng Xiaoping and the Making of Modern China , pp. 305–06. Evans

notes, for example, that the national media under the control of leftists ignored an article Deng wrote and was published in a Shanghai in the spring of 1991.

90 . Deng visited Wuhan, the special economic zones of Shenzhen (near Hong Kong) and Zhuhai (near Macao) and Shanghai. Deng’s speeches were picked up by the media in Hong Kong (which was still a British colony) and were read and/or heard by millions in South China without being filtered by the leftist-controlled media in China. In Beijing people and party and government officials heard the loud voices of support in the South for Deng’s ideas. Chen Yun, a former supporter of Deng but now his nemesis, told Deng his views were antisocialist. Deng said that socialism and capitalism were not opposites in terms of economic planning or the role of the market. He said that left-ism had done terrible harm to the party in the past and that China should guard against leftist thinking. He also said that seeking truth from facts (by which Deng meant pragmatism) was the quintessence of Marxism. See Evans, Deng Xiaoping and the Making of Modern China , pp. 306–7.

91 . Overholt, The Rise of China, p. 31. 92 . A. Doak Barnett, “Political Overview,” in Shao-chuan Leng (ed.), Reform and

Development in Deng’s China (Lanham, MD: University Press of America, 1994), pp. 5–6.

93 . See Orville Schell, Mandate of Heaven: The Legacy of the Tiananmen Square and the Next Generation of China’s Leaders (New York: Touchstone Books, 1994), p. 404.

94 . Naughton, The Chinese Economy , p. 7 95 . Brahma Chellaney, Asian Juggernaut: The Rise of China, Japan and India (New

York: Harper Collins, 2010), p. 80.

Notes ● 219

96 . Country Profile 2001: China (London: Economist Intelligence Unit, 2001), p. 15. This amounted to around 5 percent of China’s gross domestic product. About 9 percent of this investment came from the United States. Meanwhile, China’s total investment received by 2000 was US$348.3 billion. See Robert Andre LaFleur, China: A Global Studies Handbook (Santa Barbara, CA: ABC CLIO, 2003), p. 107.

97 . Tse, The China Strategy , p. 38. The author cites statistics from the Ministry of Commerce.

98 . “Japan and China: Aid Proceeds Trade,” Economist , December 8, 1979 (online at economist.com).

99 . Brautigam, The Dragon’s Gift , pp. 48–49. 100 . See Naughton, “Economic Growth,” in Joseph Fewsmith (ed.), China Today,

China Tomorrow Domestic Politics, Economy, and Society (Lanham, MD: Rowman & Littlefield, 2010), p. 73.

101 . Ibid., pp. 74–75. 102 . Ibid., p. 78. 103 . Naughton, “The Dynamics of China’s Reform-Era Economy,” in Womack

(ed.), China’s Rise in Historical Perspective , p. 132. 104 . Naughton, “Economic Growth,” in Fewsmith (ed.), China Today, China

Tomorrow , p. 80. 105 . See Sebastian Heilmann, “Policy Experimentation in China’s Economic Rise,”

Studies in Comparative Economic Development , March 2008, pp. 1–26. 106 . Naughton, “The Dynamics of China’s Reform-Era Economy,” in Womack

(ed.), China’s Rise in Historical Perspective , pp. 132–33. 107 . Ibid., p. 135. 108 . “Let a Million Flowers Bloom,” Economist , March 12, 2011, pp. 79–80. 109 . 2012 Report to Congress of the U.S.-China Economic and Security Review

Commission (Washington, DC: U.S. Government Printing Office, November 2012), p. 47.

110 . Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower (New York: Henry Holt and Company, 2015), p. 168.

111 . Ibid., p. 169. 112 . Ibid., p. 166. 113 . Ibid., p. 157–58. 114 . “Let a Million Flowers Bloom,” pp. 79–80. 115 . 2012 Report to Congress , p. 48. 116 . Ibid., p. 49. 117 . Ibid., p. 56. 118 . Ensuk Hung and Laixiang Sun, “Dynamics of Internationalism and Outward

Investment: Chinese Corporations’ Strategies,” China Quarterly , 2006, p. 624.

119 . Ivan Tselichtchev, China versus the West: The Global Power Shift of the 21st Century (Singapore: John Wiley and Sons, 2012), p. 7.

220 ● Notes

120 . “Supply Chain News: For First Time in More Than 100 Years, US Set to Lose Place as World’s Largest Manufacturer,” Supply Chain Digest , August 12, 2008 (online at scdigest.com).

121 . “Top 15 Manufacturing Countries in 2009,” Bullfax.com, January 4, 2011 (online at bullfax.com).

122 . CIA World Factbook 2011 (online at cia.gov). 123 . Much more will be said about the SEZs later. Suffice it to say here, they were

a combination of free-market principles and SOEs. 124 . There were 35 SEZs in Asia in the 1980s. See Naughton, The Chinese Economy ,

p. 407. 125 . Min Ye, “Foreign Direct Investment: Diaspora Networks and Economic

Reform,” in Joseph Fewsmith (ed.), China Today, China Tomorrow , pp. 132–36.

126 . Michael West Oborne, China’s Special Economic Zones (Paris: Organization for Economic Cooperation and Development, 1986), p. 11.

127 . Naughton, The Chinese Economy , p. 410. 128 . CIA World Factbook 2011 . pp. 9–11. 129 . China accumulated considerable debt that provincial governments had to

bear. But this was a problem to deal with later. 130 . Naughton, “Economic Growth,” in Fewsmith (ed.), China Today, China

Tomorrow , p. 85. 131 . Tselichtchev, China versus the West, p. 5. 132 . Naughton, The Chinese Economy, p. 143 133 . Bergsten et al., China: The Balance Sheet , p. 18. 134 . Bill Emmott, Rivals: How the Power Struggle between China, India and Japan

Will Shape Our Next Decade (Boston: Houghton Mifflin Harcourt, 2008), p. 56. The author states that China’s economy in 1978 was $228 billion in GDP; in 2007 it was $3.3 trillion. The GDP per capita increased tenfold dur-ing this period.

135 . Will Hutton, The Writing on the Wall: Why We Must Embrace China as a Partner or Face It as an Enemy (New York: Free Press, 2006), p. 6.

136 . Ezra F. Vogel, Deng Xiaoping and the Transformation of China (Cambridge, MA: Belknap Press, 2012), p. 693; C. Fred Bergsten, Charles Freeman, Nicolas R. Lardy and Derek J. Mitchell, China’s Rise: Challenges and Opportunities (Washington, DC: Peterson Institute, 2008), p. 3.

137 . World Economic Outlook Database (Washington, DC: International Monetary Fund, April 2007). The 2007 figure was a projection. It is predicted that China will account for 18 to 20 percent in the year 2020. See Jacques, When China Rules the World , p. 186.

138 . Jacques, When China Rules the World , p. 186. 139 . Tselichtchev, China versus the West , p. 3. 140 . Oded Shlenkar, The Chinese Century: The Rising Chinese Economy and Its

Impact on the Global Economy, the Balance of Power, and Your Job (Upper Saddle River, NJ: Wharton School Publishing, 2005), p. 11. Data are for 2004.

Notes ● 221

141 . China in fact became an attractive market for developing countries seeking export venues to stimulate their economic growth. As will be noted later, mar-ket access became an important element of China’s foreign aid giving as it has been in the case of the United States and in some ways reminiscent of China granting access at part of its tribute diplomacy.

142 . Bergsten et al., China: The Balance Sheet , p. 21. 143 . Eamonn Fingleton, In the Jaws of the Dragon: America’s Fate in the Coming Era

of Chinese Hegemony (New York: St. Marin’s Press, 2008), pp. 12–13. 144 . Martin Wolf, Fixing Global Finance (Baltimore, MD: Johns Hopkins

University Press, 2008), p. 165. 145 . See Gordon G. Chang, The Coming Collapse of China (New York: Random

House, 2001). 146 . See Michael Pettis, The Great Rebalancing: Trade, Conflict, and the Perilous

Road Ahead for the World Economy (Princeton, NJ: Princeton University Press, 2013).

147 . Michael Pettis, Avoiding the Fall: China’s Economic Restructuring (Washington, DC: Carnegie Endowment for International Peace, 2013), p. 22.

148 . Ibid., chapters 6 and 7. 149 . For a detailed assessment of China’s future economic prospects, see Arvind

Subramanian, Eclipse: Living in the Shadow of China’s Economic Dominance (Washington, DC: The Peterson Institute, 2011). For an update of this book see Arvind Subramanian, “The Inevitable Superpower,” Foreign Affairs , September 2011, pp. 66–78.

150 . Shamin Adam, “China May Surpass US by 2020 in “Super Cycle’ Standard Chartered Says,” Bloomberg, November 14, 2010 (online at bloomberg.com).

151 . Robert Fogel, “$123,000,000,000,000,” Foreign Policy , January/February 2010, p. 70.

152 . See John Wong and Huang Yanjie, “China Coming to the End of Its High Growth,” in Gungwu Wang and Yongnian Zheng (eds.), China: Development and Governance (Singapore: World Scientific, 2012) pp.103–16.

153 . Taiwan sustained economic growth at 8 percent for more than 40 years. Hong Kong and Singapore for as long a period and both are doing well today. South Korea is also doing well economically. See Emmott, Rivals , p. 56.

154 . Amy Chua, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (New York: Random House, 2003). In recent years, China has been the largest and fastest growing location of entrepreneur-ial start-ups. See also Tse, The China Strategy , p. 16.

155 . See Jacques, When China Rules the World . The author notes also that China’s population is still 50 percent in the countryside, indicating it is only around halfway through its economic takeoff (p.192). Even 20 years from now, he says, 20 percent of China’s population will still be rural (p. 215).

156 . See Charles A. Kupchan, No One’s World: The West, The Rising Rest, and the Coming Global Turn (Oxford: Oxford University Press, 2012). Kupchan believes, for a variety of reasons, developing countries will continue to grow at a rate faster than the developed countries.

222 ● Notes

157 . Subramanian, Eclipse, pp. 72–75. In this connection, it should be noted that a large part of China is still poor and will probably remain that way for a decade or so. Some writers regard this as an inevitable and potent trend and one that has and will continue to affect the nature of international politics. See, for example, Kupchan, No One’s World .

158 . This point is discussed further in the concluding chapter of Volume 3. 159 . On these points, see Jacques, When China Rules the World , pp. 401–3; Ann Lee,

What the U.S. Can Learn from China : An Open-Minded Guide to Treating Our Greatest Competition as Our Greatest Teacher (San Francisco: Berrett-Koehler Publisher, 2012), pp. 30–37; Shambaugh, China Goes Global , pp. 241–45. Also see “The Original Genius Bar,” Time , July 22, 2013. The author sug-gests that China, which barely competed with the United States for doctoral students is now doing so and that China will surpass US spending in a decade based on a 20 percent annual increase in R&D compared to US increases of 5 percent or less (p. 41 and p. 43).

160 . Lee, What the U.S. Can Learn from China , pp. 65–67; Eric X. Li, “The Life of the Party: The Post-Democratic Future Begins in China,” Foreign Affairs , January/February 2013, pp. 34–46.

161 . See James R. Gorrie, The China Crisis: How China’s Economic Collapse Will Lead to a Global Depression (Hoboken, NJ: John Wiley and Sons, 2013). The author argues that because of slow growth in the United States and Europe the world economy has become very dependent on China’s economic health and growth.

162 . See “The limits of central authority,” Economist , June 10, 2011 (online at economist.com). Also see Dwight H. Perkins, “The Centrally Planned Economy (1949–84),” and Wuy Jinglien and Wu Shitao, “China’s Economic Reforms: Process, Issues, and Prospects (1978–2012),” in Gregory C. Chow and Dwight H. Perkins (eds.), Routledge Handbook of the Chinese Economy (London: Routledge, 2015). Dealing with these problems has slowed down China’s GDP growth recently; but in the long run so acting will likely preserve high growth.

163 . Fingleton, In the Jaws of the Dragon, p. 247. 164 . Eckstein, China’s Economic Revolution , p. 45 and p. 169. 165 . See Copper, China’s Global Role , p. 62. 166 . See Overholt, The Rise of China , p. 65, and Fishman, China, Inc., p. 77. 167 . Fingleton, In the Jaws of the Dragon, p. 128. 168 . Joshua Kurlantzich, “The Dragon That Ate Wall Street,” Mother Jones, May/

June 2009, p.14. 169 . People’s Republic of China: 2006 Article IV Consultation (Washington, DC:

International Monetary Fund, 2006), p. 6. The US savings rate at that time was said to be between 1 and 2 percent.

170 . Wolf, Fixing Global Finance , p. 165. 171 . Tselichtchev, China versus the West , p. 72. 172 . A number of writers have noted that while Maoist policies were bad for China’s

economic growth at the time, they did create a situation that favored high

Notes ● 223

growth under Deng’s capitalist model, such as low debt. See Aiguo Lu, China and the Global Economy since 1840 (New York: St. Martin’s Press, 2000), p. 11.

173 . Nicholas R. Lardy, “China and the International Financial System,” in Elizabeth Economy and Michel Oksenberg (eds.), China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999), p. 209 and p. 211.

174 . Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Lanham, MD: Rowman and Littlefield, 2010), p. 102.

175 . Fishman, China, Inc , p. 15. 176 . Ibid., pp. 26–27. 177 . Gary Clyde Hufbauer and Yee Wong, “China Bashing 2004,” International

Economics Policy Briefs , (Washington, DC: Institute for International Economics, September 2004), p. 27.

178 . Gillian Wong, “China Rises and Rises, yet Still Gets Foreign Aid,” Associated Press, September 25, 2010. The main donors were Japan at $1.2 billion fol-lowed by Germany at half that amount and then France and Britain.

179 . Ibid. 180 . Ibid., p. 206. 181 . Overholt, The Rise of China , p. 56. 182 . Zachary Karabell, Superfusion: How China and America Became One Economy

and Why the World’s Prosperity Depends on It (New York: Simon and Schuster, 2009), p. 109.

183 . James Fallows, “The $1.4 Trillion Question,” Atlantic Monthly , January/February 2008 (online at theatlantic.com).

184 . For a discussion on these issues, see Gregory C. Chow, Interpreting China’s Economy (Singapore: World Scientific, 2010), chapter 17.

185 . Overholt, The Rise of China, pp. 56–57. 186 . “A Survey of Asian Finance,” Economist , February 8, 2003, p. 15. 187 . Fishman, China Inc., p. 259. 188 . Wayne M. Morrison and Marc Labonte, “China’s Holdings of U.S. Securities:

Implications for the U.S. Economy,” Congressional Research Service Report for Congress, May 19, 2008 (online at assets.opencrs.com/rpts/RL34314_20080519.pdf)

189 . Emmott, Rivals , p. 62. 190 . Michael Pettis and Logan Wright, “Hot Money Poses Risks to China’s

Stability,” Financial Times , July 13, 2008. 191 . “China’s Foreign-Exchange Reserves Surge, Exceeding $2 Trillion,” Bloomberg

News , July 15, 2009 (online at bloomberg.com). 192 . China also became the largest holder of US Treasury bonds at this time, val-

ued at $801.5 billion. See Tse, The China Strategy , p. 9. 193 . “China Foreign-Exchange Reserves Jump to $2.65 Trillion,” Bloomberg,

October 13, 2010 (online at bloomberg.com). 194 . Wolf, Fixing Global Finance , p. 167. 195 . “$4 Trillion Peak in China’s FX Hoard Frees PBOC’s Hands: Economy,”

Bloomberg, January 11, 2015 (online at Bloomberg.com).

224 ● Notes

196 . Michael Mandelbaum, The Road to Global Prosperity (New York: Simon and Schuster 2014), p. 54.

197 . When confronted with this problem, Chinese officials often pointed out that while China did have a huge trade surplus with the United States, it often ran a deficit with Japan, South Korea, and much of the European Union and thus it was not a question of what China made or how. See Karabell, Superfusion , p. 216.

198 . One author notes that in 2007, 97.7 percent of China’s trade surplus related to sales to the United States and in 2008 it was 90 percent. See Gordon G. Chang, “The Dollar’s New Best Friend,” The Weekly Standard , June 29/July 6, 2009, p. 13. As will be noted in subsequent chapters China allows a trade deficit with a number of countries to help their economies and many have called this a type of foreign aid.

199 . Mandelbaum, The Road to Global Prosperity, pp. 60–61. 200 . Jacques, When China Rules the World , pp. 190–91. 201 . This point is discussed in depth in the next chapter. 202 . Wolf, Fixing Global Finance , p. 138 203 . It is estimated that more than $200 billion in overseas investment deals

have fallen through for China because of political opposition and regulatory obstacles from 2005 to 2012. See “ODI-lay hee-ho,” Economist , January 19, 2013, p. 48.

204 . China made a bid of $18.5 billion for the company, which had oil concessions or leases in a number of other countries that made it a good buy for China. Congress and a number of government officials and business leaders criticized the idea since Unocal was considered a strategic asset. There also seemed to be anti-Chinese feelings that came into play. See David Barboza and Andrew Ross Sorkin, “Chinese Company Drops Bid to Buy U.S. Oil Concern,” New York Times , August 3, 2005 (online at nytimes.com).

205 . Jacques, When China Rules the World , pp. 190–91. 206 . See China loves Fannie Mae and Freddie Mac,” Open Salon, June 22, 2010

(online at open.salon.com). 207 . “Much Ado in China about Fannie and Freddie,” China Real Time Report,

February 12, 2011 (online at blogs.wsj.com); Aaron Back, “China Could Lose 450 Billion in Fannie and Freddie,” Wall Street Journal , February 13, 1011 (online at worldaffairsboard.com).

208 . “Streaks of Red,” Economist , July 2, 2011, pp. 52–54. 209 . Michael D. Swaine, America’s Challenge: Engaging a Rising China in the Twenty-

First Century (Washington, DC: Carnegie Endowment, 2011), p. 204. 210 . Sovereign wealth funds are state-owned funds created from a balance of pay-

ments surplus, foreign currency operations, proceeds from privatization, gov-ernment transfer of funds, surplus of capital resulting from balance of trade surplus. Many are of recent origins.

211 . For details on how they work, focusing on the China Investment Corporation, see Catherin Chong Siew Keng, “An Update on China’s Sovereign Wealth

Notes ● 225

Fund: China Investment Corporation,” Wang and Zheng (eds.), China: Development and Governance, pp. 1999–2006.

212 . Pillsbury, The Hundred-Year Marathon , pp. 135–36. 213 . For further details, see Copper, China’s Foreign Aid , pp. 117–18. 214 . Ibid. See also John F. Copper, “China’s Military Assistance,” in John F. Copper

and Daniel S. Papp (ed.), Communist Nations’ Military Assistance (Boulder, CO: Westview Press, 1983), pp. 98–108.

215 . It is worth noting that China gave very little aid to other countries in the early years. In fact, before the mid-1950s China gave no aid to any non-bloc nation.

216 . Barnett, Communist China and Asia , pp. 226–31. 217 . Gittings, The World and China , p. 59. Mao said this in his work On Protracted

War and in a Central Committee meeting in October 1938. 218 . According to one author’s interpretation, the Soviet Union helped Chiang

Kai-shek take Manchuria but then gave arms to Mao’s Communists, hoping neither side would be able to establish itself there. See Harrison Salisbury, War between Russia and China (New York: Norton, 1969), p. 95.

219 . Only two loans, one granted at this time and another in 1954 are traceable, the two totalling US$430 million. See G. F. Hudson, Richard Lowenthal and Roderick MacFarquhar, The Sino-Soviet Dispute: Documented and Analyzed (New York: Praeger, 1961), p. 36. The authors, however, note that China maintained a trade imbalance with the Soviet Union for some years and that must have been accounted for by economic assistance. Another writer says it was worth somewhere in the range of US$1 billion from 1950 to 1960. See Dwight Perkins, “The Economic Background and Implications for China,” in Herbert J. Ellison (ed.), The Sino-Soviet Conflict: A Global Perspective (Seattle: University of Washington Press 1982), p. 94. The author estimates the amount was US$1.3 billion, though one-quarter of this went to pay for joint stock companies in China. Eckstein states that the total value of Soviet aid to China was not disclosed even though the value of Soviet and Chinese aid to North Korea was. This, and the fact that negotiations were protracted suggest the aid was not large. See Alexander Eckstein, China’s Economic Development: The Interplay of Scarcity and Ideology (Ann Arbor: University of Michigan Press, 1976), p. 232.

220 . Ibid., p. 209. 221 . Alexander Eckstein, Communist China’s Economic Growth and Foreign Trade:

Implications for U.S. Policy (New York: McGraw-Hill, 1966), p. 169 and Perkins, “The Economic Background and Implications for China,” p. 94.

222 . Li Hsien-nien, “Final Accounts for 1956 and the 1957 State Budget,” (report to) National People’s Congress June 29, 1957, Current Background, July 5, 1957, cited in Barnett, Communist China and Asia , p. 229.

223 . Eckstein, China’s Economic Development , p. 232. The author states the amount was increased in 1954 to $117 million and that it totaled around US$1 billion over a period of ten years.

226 ● Notes

224 . Barnett, Communist China and Asia , p. 229. 225 . Choh-ming Li, “Economic Development,” China Quarterly , January-March

1960, reprinted in Franz Schurmann and Orville Schell, Communist China (New York: Vintage Books, 1967), p. 199.

226 . Henry Kissinger, On China (New York: Penguin, 2011), p. 117. 227 . Eckstein, Communist China’s Economic Growth and Foreign Trade, p. 169. 228 . See Li, “Economic Development,” p. 199. The author states that China started

repaying Soviet loans in 1954. 229 . Perkins, “The Economic Background and Implications for China,” p. 94.

Salisbury calls it a “pittance” and says the terms “were those of a miser,” p. 106. He further notes that much of the aid was used to build joint stock companies, in which the Soviet Union retained 51 percent ownership, calling these deals “not much different from the kind of deals Standard Oil or Shell Petroleum made with weak colonial countries.”

230 . Donald S. Zagoria, The Sino-Soviet Conflict: 1956–61 (New York: Atheneum, 1964), p. 86. One explanation is that the Soviet Union was preoccupied with Eastern Europe at the time and extended large credits to several countries there. China, however, was angry over the fact that “rebellion yielded better reward than loyalty.” See Hudson et al., The Sino-Soviet Dispute , p. 37.

231 . Barnett, Communist China and Asia , p. 228–29. 232 . Sidney Klein, The Road Divides: Economic Aspects of the Sino-Soviet Dispute

(Hong Kong: Green Pagoda Press, 1966), p. 66 and 68. This aid was also inter-preted as “intended to encourage the Nehru government’s policies directed against communism, against the people and against socialist countries.” See Yahuda, China’s Role in World Affairs , p. 159.

233 . Li Hsien-nien, “Final Accounts for 1956 and 1957 State Budget,” cited in Barnett, Communist China and Asia , p. 229.

234 . Ibid. 235 . See Copper, China’s Foreign Aid , chapter 2. This is not to mention, again

using Chinese data, China’s foreign aid to other nations worth $165 million in 1955, $171 million in 1956, $192 million in 1957, $116 million in 1958, and $253 million in 1959. For these figures, see Barnett, Communist China and Asia , pp. 229–230.

236 . Jung Chang and Jon Halliday, Mao: The Untold Story (New York: Knopf, 2005), pp. 381–85. The authors note also that Mao was determined to build China into a strong military power, including obtaining nuclear weapons and this motivated Mao to spend less on agriculture, resulting in food shortages. They note that 61 percent of the Chinese government’s budget went to mili-tary and arms-related industries. Just over 8 (8.2) percent was allocated to education and health care and that official government documents mention cutting consumption to satisfy the need for exports.

237 . Ibid. 238 . Some other information may also be relevant. Meanwhile, Mao’s Stalinist

model for development showed very visible signs of failing. Mao could not wring more capital investment from the agricultural sector to finance

Notes ● 227

expanding heavy industry, which was not doing what Mao expected any-way. There were no external sources of capital without improving relations with the West, which Mao would not do. There was a growing gap in wages between the cities and countryside that Mao found objectionable for political reasons. Mao had to find another approach to development.

This came in the form of Mao’s “Great Leap Forward” launched in 1958. Instead of retreating from his efforts to build heavy industry while ignor-ing the agricultural sector, Mao sought to take a big step forward toward the ultimate goal of Communism. He attempted to link the countryside and the cities economically and utilize spiritual incentives to lift productivity in addition to communes that would turn the peasants into efficient workers. Instead, factories which were brought to the rural areas (including “backyard steel plants”), produced little that could not be used. Peasants hid their tools and ate their animals before entering the communes and adopted lazy habits once there. In addition, cadres, who did not know how to run factories or farms, made policies for both.

239 . Jung Chang and Jon Halliday, Mao: The Untold Story (New York: Alfred Knopf, 2005), p. 383.

240 . Ibid. 241 . Ibid. 242 . Frank Dik ö tter, Mao’s Great Famine: The History of China’s Most Devastating

Catastrophe, 1958–1962 (New York: Walker Publishers, 2010). 243 . Ta Kung Pao, October 13, 1959, cited in Copper, China’s Foreign Aid , p. 1. 244 . “Quarterly Chronicle and Documentation,” China Quarterly , November-

December 1962, cited in ibid. 245 . Ibid., p. 442. 246 . Chang and Halliday, Mao: The Untold Story , p. 461. 247 . Ibid. 248 . Ibid. 249 . Ibid., p. 462. 250 . Ibid. 251 . Ibid., p. 586. 252 . Gregory T. Chin and B. Michael Frolic, “Emerging Donors in International

Development Assistance: The China Case,” IDRC/CRDI, December 2007 (online at www.idrc.ca/uploads/user-s/12066374801China_find_summary.pdf ).

253 . See John W. Garver, Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ: Prentice Hall, 1993), p. 243 and 312.

254 . The four modernizations were (in order) agriculture, industry, science and technology, and national defense. Zhou Enlai invented them before Mao died, but they became the banner of Deng’s reforms in 1978. They were said to define Deng’s goals of modernizing China by the end of the century and were connected to China’s Ten-Year Plan. China lacked the infrastructure and the foreign exchange to fulfill the modernizations and had to concentrate on both. See Colin Mackerras, Pradeep Taneja, and Graham Young, China

228 ● Notes

since 1978: Reform, Modernization and “Socialism with Chinese Characteristics” (Melbourne: Longman Cheshire, 1994), p. 63.

255 . See Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence,” in David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978–2000 (Stanford, CA: Stanford University Press, 2001), p. 226.

256 . World Development Report 1991: The Challenge of Development (New York: Oxford University Press, 1991), p. 242.

257 . World Development Report 1990: Poverty (New York: Oxford University Press, 1990), p. 216.

258 . Yearbook on China’s Foreign Economic Trade (various years) and “Investment Data,” China Business Review , May-June 1996, p. 40, cited in Margaret M. Pearson “China’s Integration into the International Trade and Investment Regime,” in Elizabeth Economy and Michael Oksenberg (eds.) China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999), p. 171.

259 . Jonathan Watts, “China Shifts from Receiving to Giving Foreign Aid as Economic Boom Continues,” The Guardian , December 15, 2004 (online at guardian.co.uk). It is worth noting that the author cites James Morris, head of the World Food Program, as saying that China, with an average growth rate of 9 percent in recent years, has lifted up to 500 million people out of poverty and does not need us.

260 . See, for example, Keith Bradsher, “China Faces Backlash at Home over Blackstone Investment,” New York Times, August 2, 2007 (online at nyt.com).

261 . Ken Miller, “Coping with China’s Financial Power,” Foreign Affairs, July/August 2010 p. 100.

262 . Lampton, The Three Faces of Power , p. 243. 263 . Elizabeth C. Economy and Michael Levi, By All Means Necessary: How China’s

Resource Quest Is Changing the World (New York: Oxford University Press, 2014), pp. 47–49.

264 . Samuel P. Huntington, The Clash of Civilizations and the Remaking of the World Order (New York: Simon and Schuster, 1996), p. 229.

265 . Aaron L. Friedberg, A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia (New York: W. W. Norton, 2011), p. 157.

266 . Jacques, When China Rules the World , p. 319. 267 . See Pillsbury, The Hundred-Year Marathon, chapter 1.

4 China’s Foreign Policy Goals and Its Foreign Aid and Investment Diplomacy

1 . See Kerry Dumbaugh and Michael F. Martin, “Understanding China’s Political System,” Congressional Research Service, December 31, 2009. As noted earlier, information about China’s foreign aid giving is considered a state secret. Notwithstanding this, it is possible to know something about the

Notes ● 229

decision-making process and certainly about the magnitude, kind, and condi-tions of its aid as will be seen in subsequent chapters.

2 . See A. Doak Barnett, The Making of Foreign Policy in China: Structure and Process (Boulder, CO: Westview Press, 1985) p.77 for information that puts this body in the context of the policy-making bureaucracy. Dumbaugh and Martin suggest that leading small groups “facilitate consensus building and coordination.” They are mentioned in the Party’s constitution. See Dumbaugh and Martin, “Understanding China’s Political System,” p. 11. Also see Linda Jakobson and Dean Knox, “New Foreign Policy Actors in China,” Stockholm International Peace Research Institute, September 2010.

3 . Ibid. This Leading Small Group was established in 1958, but disappeared dur-ing the Cultural Revolution.

4 . It is almost certain its members consider it a party group, even though the party’s name is not always used.

5 . Barnett suggests that the foreign minister convenes meetings. Lu says that it was reorganized after the 13th Party Congress and that it was headed by Premier Li Peng and one of its members was now the defense minister. He says that in 1998 Chinese Communist Party secretary general Jiang Zemin took charge. Lu says that its functions were not well defined from the onset.

6 . Barnett suggests the Central Committee picks them, but, if true, this is prob-ably a formality. See Barnett, The Making of Foreign Policy in China , p. 77.

7 . See Lu Ning, “The Central Leadership, Supraministry Coordinating Bodies, State Council Ministries, and Party Departments,” in David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform (Stanford, CA: Stanford University Press, 2001), p. 45.

8 . Lu, “The Central Leadership,” p. 47. One writer describes its functions to include “coordinating the work of several agencies and ensuring Party super-vision over government activities.” See Wei Liang, “Bureaucratic Politics Interministerial Coordination and China’s GATT/WTO Admission Negotiations,” in Ka Zeng (ed.), China’s Foreign Trade: The New Constituencies (London: Routledge, 2007), p. 24.

9 . Gregory T. Chin and B. Michael Frolic, “Emerging Donors in International Development Assistance: The China Case,” International Development Research Centre (Canada), December 2007, p. 6. Regarding foreign aid deci-sion making, its responsibility is said to be “programming” aid.

10 . Lu, “The Central Leadership,” p. 47. Also see Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War (Lanham, MD: Rowman and Littlefield, 2010), p. 59. Both writers connect the growing importance of this body to the fact, at least during the period 1998 to 2003, that it was headed by Premier Zhu Rongji.

11 . The others are: Politics and Law, Hong Kong and Macau, Taiwan Affairs, Propaganda and Ideology, and Party Building. See Alice Miller, “The CCP Central Committee’s Leading Small Groups,” China Leadership Monitor , No. 26.

230 ● Notes

12 . Ibid. See also Dumbaugh and Martin, “Understanding China’s Political System,” p. 11.

13 . See Barnett, The Making of Foreign Policy in China , chapter 6. 14 . Ibid., p. 81. 15 . Chin and Frolic, “Emerging Donors in International Development Assistance,”

p. 6. 16 . Jakobson and Knox, “New Foreign Policy Actors in China,” p. 8. 17 . Barnett, The Making of Foreign Policy in China, pp. 93–94. Before 2003, the

Ministry of Commerce was the Ministry of Foreign Economic Relations and Trade; in 1982 was formed from the Ministry of Foreign Trade, the Ministry of Foreign Economic Relations (which had a major role in China’s foreign aid at one time), the State Import and Export Commission, and the State Foreign Investment Commission.

18 . “China’s Foreign Aid,” Part V. 19 . This suggests this is a growing motivation for aid giving. This is confirmed in

chapters of this book that follow. 20 . Carol Lancaster, “Foreign Aid in the Twenty-First Century: What

Purposes?” in Louis A. Picard, Robert Groelsema, and Terry F. Buss (eds.), Foreign Aid and Foreign Policy: Lessons for the Next Half-Century (Armonk, NY: M. E. Sharpe, 2008), p. 47. Also see Jakobson and Knox, “New Foreign Policy Actors in China,” p. 10. The Ministry of Commerce, or more accu-rately its predecessors, and their counselor offices around the world worked closely with recipient countries and acquired considerable experience and expertise in giving aid. As China’s economy was decentralized under Deng Xiaoping, it lost some of its authority over aid giving. This was restored to some degree when China’s economy was subsequently recentralized. See Shuaihua Cheng, Ting Fang Hui-Ting Lien, “China’s International Aid Policy and Its Implications for Global Governance,” Working Paper (Research Center for Chinese Politics and Business Indiana University), June 2012, pp. 5–6.

21 . Chris Alden, China in Africa (London: Zed Books, 2007), p. 24. 22 . Chin and Frolic, “Emerging Donors in International Development Assis-

tance,” p. 6. 23 . Deborah Brautigam, “China’s Foreign Aid in Africa: What Do We Know?” in

Rotberg (ed.), China into Africa: Trade, Aid, and Influence (Washington, DC: Brookings Institution, 2008), p. 201.

24 . Ibid. 25 . Ibid. 26 . Zhang Yuan Shan, “The Primary Responsibilities of the Ministry of Commerce

Have Been Defined with the Approval of the State Council,” Guoji Shangbao May 3, 2003, p. 1 (Translated by FBIS Document ID: CPP20030624000249). The essential article reads: “Taking responsibility for China’s foreign aid work, formulating and executing foreign aid policies and programs, and signing and executing related agreements; organizing and executing foreign aid plans,

Notes ● 231

supervising and investigating the implementation of foreign aid projects, man-aging foreign aid funds, preferential loans, special funds, and other foreign aid funds of our government; promoting the reform of foreign aid methods.”

27 . Carol Lancaster, “The Chinese Aid System,” Center for Global Development, June 27, 2007, cited in Jakobson and Knox, “New Foreign Policy Actors in China,” p. 10.

28 . Barnett, The Making of Foreign Policy in China, p. 81. Another writer says the Minister of Commerce is responsible for “designing China’s . . . economic aid strategies under guidelines established by the central leadership.” See Ka Zeng and Andrew Mertha, “Introduction,” in Ka (ed.), China’s Foreign Trade Policy , p. 4.

29 . “China’s Foreign Aid,” Part V. 30 . Chin and Frolic, “Emerging Donors in International Development Assistance,”

pp. 6–7. 31 . Ibid., p. 7. 32 . Alden, China in Africa , p. 24. 33 . “Ministry of Finance: The World Bank’s Counterpart Agency in China,”

World Bank (no date given) (online at go.worldbank.org/TOFZXVBVRLQO, viewed on March 10, 2009).

34 . Chin and Frolic, “Emerging Donors in International Development Assistance,” p. 8.

35 . Jakobson and Knox, “New Foreign Policy Actors in China,” p. 12. 36 . “PRC: MOFTEC, Other Agencies Issue Notice on Supervision over Foreign

Aid Goods,” Ministry of Foreign Trade and Economic Cooperation Foreign Assistance Document No. (2002) 560, translated by FBS, January 7, 2003 (Document ID: CPP20030212000126).

37 . “China’s Foreign Aid,” Part V. 38 . Ibid. However, judging from how aid decisions are made in other countries

one wonders how true this is. 39 . Henry Wing Yep, “China’s Foreign Aid: Promoting a “Win-Win’ Environment”

(unpublished master’s degree thesis), pp. 7–9. Helping the Chinese economy and creating jobs are issues that are discussed later in this chapter.

40 . See “Brief Introduction,” The Export-Import Bank of China (online at exim-bank.gov.cn), viewed on March 10, 2009. By 1999, according to a Chinese source, the bank had extended loans totaling $385 million for 50 projects in 27 nations. They were preferential loans targeted at promising manufacturing projects in developing countries and for the purchase of Chinese mechanical and electronic products. See “China: Loan to Increase Bilateral Trade,” China Daily , August 27, 1999 (online at chinadaily.com.cn).

41 . Takasaki Kobayashi, “Chugoku no Enjo Seisaku: Taigai Enjo Kaikaku no Tenkai,” Kaibatsu Kiyu Kenkyuhoko, 2007, pp. 119–22, cited in Watanabe, “China’s Foreign Aid,” in Kim and Potter (eds.), Foreign Aid Competition in Northeast Asia (Sterling, VA: Kumarian Press, 2012), p. 67.

42 . Ibid.

232 ● Notes

43 . See, “Loans to Overseas Investment Projects,” The Export-Import Bank of China (online at eximbank.gov.cn), viewed on March 10, 2009. The Chinese Communist Party, of course, likely sets these as goals.

44 . Brautigam, “China’s Foreign Aid in Africa,” p. 201. 45 . Its own annual report mentions that it has been effective in boosting the eco-

nomic and social development of the recipient countries and has also improved friendly economic and trade cooperation between China and other developing countries.” This was stated in its 2002 annual report. See Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is Transforming the World (New Haven, CT: Yale University Press, 2007), p. 98. It is well known that it provides loans for overseas construction and various other kinds of invest-ments. See Todd Mass and Sarah Rose, “China Exim Bank and Africa: New Lending, New Challenges,” Center for Global Development (Washington, DC) November 2006, p. 1.

46 . Paul Hubbard, “Chinese Concessional Loans,” in Rotberg (ed.), China into Africa , pp. 220–21.

47 . See Bates Gill and James Reilly, “The Tenuous Hold of China Inc. in Africa,” Washington Quarterly, Summer 2007, pp. 37–52.

48 . Harry Broadman, Africa’s Silk Road : China and India’s New Economic Frontier (Washington, DC: World Bank, 2007), pp. 249–50.

49 . Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge, MA: MIT Press, 2007), p. 457.

50 . Brautigam, “China’s Foreign Aid in Africa,” p. 143 and p. 201. 51 . The People’s Bank of China that has been “experimenting” in nongovernment

securities and other instruments suggests that it has gone beyond its basic mandate of capital preservation, liquidity, and profit. See Ken Miller, “Coping with China’s Financial Power,” Foreign Affairs , July/August 2010, p. 98.

52 . See its website at chinainternationalfund.com. 53 . See Catherine Chong Siew Keng, “An Update on China’s Sovereign Wealth

Fund: China Investment Corporation,” in Wang and Zheng (eds.), China: Development and Governance , pp. 201. Alternative investments grew from 6 percent in 2009 to 21 percent in 2010.

54 . See Huang Yanjie, “China’s State-Owned Enterprises: The Dilemma of Reform,” in Wang and Zheng (eds.), China: Development and Governance , pp. 190–91. However, it need be noted as mentioned in Volume 1, Chapter 3 , that many of China’s large enterprizes have been cut in size or their growth limited in recent months.

55 . Brautigam, Chinese Aid and African Development , p. 48. 56 . Alden, China in Africa , p. 24. According to Brautigam, the economic counsel-

ors, from the commercial offices in the embassy, often make decisions separate from the ambassadors. See Brautigam, Chinese Aid and African Development , p. 48.

57 . See Jakobson and Knox, “New Foreign Policy Actors in China,” chapter 4. 58 . It is worth noting, though, that there is no constituency in China that pro-

motes aid as there are to some extent in some Western countries. Also think

Notes ● 233

tanks have very little interest in the subject and, therefore, little input. See Lancaster, “The Chinese Aid System,” p. 5.

59 . This began with the Opium War, which many see as marking the beginning of a 100-year period of China’s humiliation, which included embarrassment caused by Western countries and Japan taking advantage of China. One writer comments that the pre-Communist history of modern China was “essentially one of weakness, humiliation and failure.” See Harold C. Hinton, Communist China in World Politics (Boston, MA: Houghton Mifflin, 1966), p. 6.

60 . One scholar notes that communism to Mao was “vengeance against the past and the West.” See Joseph Levenson, Revolution and Cosmopolitanism: The Western Stage and the Chinese Stages (Albany, NY: State University of New York Press, 1971), p. 54.

61 . See A. Doak Barnett, Communist China and Asia: A Challenge to American Policy (New York: Vintage, 1960), chapter 2. Mao, it is widely known, wanted to rid China of its past. But much he kept, especially that which facilitated his totalitarian rule. Elegant notes, “habits of the mind were congenial.” He also argues that Mao simply shifted loyalty from the fam-ily to the state and kept the Confucian dedication to Utopia, “unimpaired by doubts to human capabilities.” Finally he notes that the insistence on conformity, the reliance on the written word, and the preference for forms rather than reality” were in common. See Robert S. Elegant, The Center of the World: Communism and the Mind of China (New York: Funk and Wagnalls, 1968), p. 197.

62 . Hinton, Communist China in World Politics , chapter 3. 63 . Barnett, Communist China and Asia , pp. 68–69. 64 . Greg O’Leary, The Shaping of Chinese Foreign Policy (New York: St. Martin’s

Press, 1980), p. 17. 65 . Harold C. Hinton, China’s Turbulent Quest (New York: Macmillan, 1970),

p. 31. 66 . Chiang’s forces on Quemoy conducted various military forays into China

after 1949 for some years. The United States supported Chiang’s efforts, at least tacitly, and debated a policy of making Taiwan permanently separate from China. See Thomas E. Stolper, China, Taiwan and the Offshore Islands (Armonk, NY: M. E. Sharpe, 1985), pp. 10–11, and David M. Finkelstein, Washington’s Taiwan Dilemma, 1949–1950: From Abandonment to Salvation (Fairfax, VA: George Mason University Press, 1993), chapter 7. Within China, anti-Communist guerrilla activities persisted until 1952. See Barnett, Communist China and Asia , p. 12.

67 . Hinton, Communist China in World Politics , pp. 122–23. It certainly looks like this in retrospect.

68 . John W. Garver, Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ: Prentice Hall, 1993), pp. 41–42. Also see Hinton, China’s Turbulent Quest , p. 38.

69 . Andrew J. Nathan and Andrew Scobell, China’s Search for Security (New York: Columbia University Press, 2012), pp. 70–71.

234 ● Notes

70 . Mao said: “Internationally we belong to the anti-imperialist front, headed by the Soviet Union.” He further stated that we “can only look for genuine and friendly aid from that front and not from the imperialist front.” See Mao Tse-tung, On People’s Democratic Dictatorship (Peking: English Language Service of the New China News Agency, 1949), p. 9. Mao made his “lean to one side” comment in this same publication.

71 . The Chinese Communist Party, as seen in early documents and manifestos, had long taken the view that due to imperialism China was “still dominated by a feudal system of militarists and bureaucrats” and that “until the Chinese proletariat is able to seize power” this would not change. See Benjamin Schwartz, Chinese Communism and the Rise of Mao (New York: Harper and Row, 1951), p. 39.

72 . Hinton, China’s Turbulent Quest , pp. 37–40. 73 . Garver, Foreign Relations of the People’s Republic of China , p. 41. 74 . Liu wrote this at the time. See Liu Shao-ch’i, Internationalism and Nationalism

(Peking: Foreign Languages Press, 1949), p. 11 cited in Barnett, Communist China and Asia , p. 343.

75 . See Michael B. Yahuda, China’s Role in World Affairs (London: Croom Helm, 1979), p. 40.

76 . For further details on the so-called “last chance” theory, see Garver , Foreign Relations of the People’s Republic of China , p. 41.

77 . Hinton, China’s Turbulent Quest , p. 41. 78 . Barnett , Communist China and Asia , p. 345. Also see Alan J. Day, Sian Kevile,

and Peter Jones, China and the Soviet Union, 1949–84 (New York: MK Books, 1985), pp. 2–3.

79 . See Yahuda, China’s Role in World Affairs , p. 41. 80 . Ibid. The author stresses that Mao certainly thought this was the case. 81 . See Barnett, Communist China and Asia , pp. 220–23. China’s trade with the

Soviet Union before World War II was less than 1 percent of China’s total trade. It rose to 33.5 percent in 1950, 78.1 percent in 1952, and 82 percent in 1955. It declined thereafter.

82 . See the various estimates of China’s aid to different regions of the world in Volume 1, Chapter 1 .

83 . For a list of events that engendered Sino-Soviet differences, their dates and the importance of them, see Yahuda, China’s Role in World Affairs, chapter 1.

84 . Zagora, who has arguably written the best analysis of the causes for the split, sees it as beginning in 1956 based on differences in views on how to “build socialism,” the relationship among Communist parties, and how best to struggle against the West. Chinese leaders have supported this view. Zagoria also notes that at this juncture China adopted a different strategy from the Soviet Union on Eastern Europe and began seeing itself as a separate source of Communist doctrine. See Donald S. Zagoria, The Sino-Soviet Conflict: 1956–1961 (New York: Atheneum, 1964), p. 7.

85 . Observers have noted that even though American forces (and bases) surrounded China, the United States threatened China only on the periphery and not its

Notes ● 235

borders. Mao in fact noted that the United States did not have a clear military or political purpose. He described the United States as “an ox with its tail tied to a post.” On the other hand, the Soviet Union threatened China’s bor-ders, and was a greater intimidator relative to China’s heartland. See Jonathan D. Pollack, “China’s Agonizing Reappraisal,” in Herbert J. Ellison (ed.), The Sino-Soviet Conflict: A Global Perspective , (Seattle: University of Washington Press, 1982), p. 57.

86 . The dispute also had global ramifications. Some writers, in fact, see it as the most important factor in international politics for two decades or more. See G. W. Choudhury, China in World Affairs: The Foreign Policy of the PRC Since 1970 , (Boulder, CO: Westview Press, 1982), p. 126.

87 . See Steven Goldstein, “Nationalism and Internationalism: Sino-Soviet Relations,” in Thomas Robinson and David Shambaugh (eds.), Chinese Foreign Policy: Theory and Practice (Oxford, NY: Clarendon Press, 1994), pp. 224–265.

88 . These included the permanent stationing of Soviet forces in Dairen and Port Arthur in northeast China, the establishment of a joint Pacific Fleet under Moscow’s control, setting up naval communications facilities in China under Soviet auspices, and more. See Chun-tu Hsueh, “Introduction,” in Chun-tu Hsueh (ed.), China’s Foreign Relations: New Perspectives (New York: Praeger, 1982), pp. 2–3. There were other provisions in the agreement such as provi-sion for the joint administration of the railroads in Manchuria, joint stock companies in the border areas of China, mining and petroleum extracting companies, a company to build and repair ships in Dairen, and a civil avi-ation company. China agreed to the status quo in Outer Mongolia, which meant its independence and domination by Moscow. For details, see Barnett, Communist China and Asia , p. 345.

89 . A number of scholars have opined that Mao did not play a central role in the decision to invade South Korea and was little more than informed about it. This point is discussed in greater detail in Volume 2, Chapter 3.

90 . A number of specialists in the field regard this as one of the major reasons for the Sino-Soviet split. See, for example, Chun-tu Hsueh and Robert C. North, “China and the Superpowers: Perception and Reality,” in Hsueh (ed.), China’s Foreign Relations , p. 73. They call it one of the two major reasons. They noted that Foreign Minister Chen Yi stated at the time that China would have an atomic bomb “even if the Chinese people do not have pants to wear.” Others suggest that the dispute between China and the Soviet Union has a long history and there was much more to it than the Offshore Island matter in 1958. See Sidney Klein, Politics versus Economics: The Foreign Trade and Aid Policies of China (Hong Kong: International Studies Group, 1968), pp. 56–57. It was clear that the Soviet Union did not respond as strongly as China and came mainly after the fact. See Joseph Camilleri, Chinese Foreign Policy: The Maoist Era and Its Aftermath (Seattle: University of Washington Press, 1980), pp. 56–57.

91 . Lawrance, China’s Foreign Relations since 1949 (London: Routledge, 1975), p. 82.

236 ● Notes

92 . For details, see Garver, Foreign Relations of the People’s Republic of China , pp. 43–65. The break between the parties coincided with differences over Cuba, an issue that will be discussed in a later chapter.

93 . Beyond the Soviet criticism of China over Mao’s extremism and his destroying the party, the territorial issue between China and the Soviet Union became more serious. Beijing spoke of the “lost territories” that Russia took in the past and organized demonstrations in some border areas. See Camilleri, Chinese Foreign Policy , p.76.

94 . See Jonathan D. Pollack, “China’s Agonizing Reappraisal,” in Ellison (ed.), The Sino-Soviet Conflict , p. 50.

95 . Chinese leaders perceived there was a danger the Soviet Union might take similar actions against China. Thus the Sino-Soviet dispute deepened. See Hinton, China’s Turbulent Quest, p. 159.

96 . See A. Doak Barnett, China and the Major Powers in East Asia (Washington, DC: Brookings, 1977), p. 52.

97 . The Sino-Soviet Dispute (New York: Charles Scribner’s Sons, 1969), p. 29; China and the Soviet Union: 1949–84 (New York: Facts on File Publications, 1985), p. 21. Also see the various sources cited in this section about the dispute.

98 . See Klein, Politics versus Economics , chapter 2 for an explanation of the Sino-Soviet rift from purely an economic perspective.

99 . Dangdai zhongguo waijiao , pp. 117–18 cited in Shu Gang Zhang, “Beijing’s Aid to Hanoi and the United States-China Confrontations, 1964–1968,” in Priscilla Roberts (ed.), Behind the Bamboo Curtain: China, Vietnam and the World Beyond (Washington, DC: Woodrow Wilson Center Press, 2006), p. 260.

100 . China and the Soviet Union: 1949–84 , p. 21. The writers cited Beijing Radio. 101 . Dangdai zhongguo waijiao , pp. 117–18 cited in Shu Gang Zhang, “Beijing’s

Aid to Hanoi and the United States-China Confrontations, 1964–1968,” p. 260.

102 . Shu Gang Zhang, “Beijing’s Aid to Hanoi and the United States-China Confrontations, 1964–1968,” p. 261. China perceived that the break with the Soviet Union not only created stress between the two countries and over their border issues but also increased tension with the United States, which would exploit the situation. When the Kennedy administration subsequently shifted US strategic policy from brinkmanship to a limited war policy, China saw this as a major threat and an increase in the possibility of conflict.

103 . One writer states: “The Chinese leadership must have chosen to buy increas-ing self-reliance and freedom of action in foreign affairs at the price of eco-nomic development at home.” See Alexander Eckstein, Communist China’s Economic Growth and Foreign Trade (New York: McGraw-Hill, 1956), cited in Schurmann and Schell, Communist China , p. 418.

104 . China and the Soviet Union: 1949–1984 , p. 24. The Soviet Union at this time broke relations with Albania, which was at the time receiving considerable aid from China.

Notes ● 237

105 . The author here is taking China’s official aid at face value as reported in vari-ous publications cited in Volume 1, Chapter 1 . Using these figures China’s aid in 1961 was nearly threefold the previous years.

106 . Lawrance, China’s Foreign Relations since 1949 , p. 152. 107 . Alan Hutchison, China’s African Revolution (London: 1975), p. 206. Also

see Bruce Larkin, “Chinese Aid in Political Context: 1971–73,” in Warren Weinstein (ed.), Chinese and Soviet Aid to Africa (New York: Praeger, 1975), p. 238.

108 . See Klein, Economics versus Politics , p. 145. The author states that China saw neither India nor Taiwan as its primary foe in Asia; rather it was the Soviet Union. He cites nine countries in Asia where economic competition pre-vailed: North Korea, North Vietnam, Outer Mongolia, Indonesia, Burma, Cambodia, Ceylon, Nepal, and Pakistan.

109 . Ibid. 110 . This document is discussed in detail in Volume 1, Chapter 1 . 111 . Some observers noted that China’s aid guidelines amounted to an “ill-

disguised” effort to draw invidious comparisons with Soviet aid. 112 . Hinton, China’s Turbulent Quest , p. 194. Also see Yahuda, China’s Role in

World Affairs , pp. 160–61. Yahuda states that, just as much as criticizing Soviet aid, China was also touting its own foreign aid.

113 . At this time China was providing much needed economic and military aid to Vietnam as will be seen in the next chapter. It is worth noting here that in 1963, China gave its permission for arms delivered to North Vietnam to be used in the conflict in South Vietnam. Hanoi, in return, took a more pro-China position regarding the Sino-Soviet dispute. See Hinton, China’s Turbulent Quest , p. 119.

114 . William E. Griffith, “Sino-Soviet Relations, 1964–1965,” China Quarterly , January-March 1966, pp. 60–63.

115 . Yahuda, China’s Role in World Affairs , p. 161. 116 . See Copper, China’s Foreign Aid , pp. 75–76 for details. 117 . See Wolfgang Bartke, China’s Economic Aid (New York: Holmes and Meier,

1975), pp. 10–11 for this estimate. 118 . One author notes that after 1970 China made “almost revolutionary changes”

in its foreign policy to deal with the threats from Moscow. The same writer also notes that China engaged in frequent condemnations of the Soviet Union after it became a member and was much less harsh on the United States. See Choudhury, China in World Affairs , p. 4 and p. 131.

119 . C. G. Jacobsen, Sino-Soviet Relations since Mao: The Chairman’s Legacy (New York: Praeger, 1981), chapter 3.

120 . Ibid., chapter 2. 121 . Ibid., chapter 4. 122 . Many instances of this are cited in following chapters. 123 . John F. Faust and Judith F. Kornberg, China in World Politics : Policies, Processes

and Prospects (Boulder, CO: Lynne Rienner, 2005), p. 111. It is interesting to note that China even extended a “gift” to Russia (not to mention paying for

238 ● Notes

large quantities of oil and gas) for US$ 400 million for a feasibility study on building a spur to the East Siberian-Pacific Ocean pipeline that would go to China. “CNPC to Issue $400 Mln Grant to Build ESPO Pipeline Branch to China, Interfax , March 22, 2006, cited in Michael R. Chambers, “Framing the Problem: China’s Threat Environment and International Obligations,” in Roy Kamphausen and Andrew Scobell (eds.), Right-Sizing the People’s Liberation Army: Exploring the Contours of China’s Military (Carlisle, PA: U.S. Army War College, 2007), p. 38.

124 . Camilleri, Chinese Foreign Policy , p. 5. 125 . Ibid., p. 5. Also, see Henry Kissinger, On China (New York: Penguin, 2011).

Kissinger pursues this theme throughout the book. 126 . Mao noted that reformists during the Qing Dynasty, Sun Yat-sen, and Chiang

Kai-shek were all preoccupied if not obsessed with this purpose. Their means, of course, were quite different. Mao noted that both Sun and Chiang tried to improve China’s status not only by trying to adopt Western culture and poli-tics, but also by enhancing China’s self-identity and by fostering patriotism. But in Mao’s view they failed because they did not go far enough and did not espouse the right ideology.

127 . Barnett, Communist China and Asia , p. 67. Mao may also have believed that China would not be a Soviet satellite in the “usual sense.” See Hinton, China’s Turbulent Quest , p. 35.

128 . Anne Gilks and Gerald Segal, China and the Arms Trade (New York: St. Martin’s Press, 1985), p. 20.

129 . Mao Tse-tung, “Cast Away Illusions, Prepare for Struggle,” in Mao Tse-tung, Selected Works, Volume 4 (Peking: Foreign Languages Press, 1969). Mao at the time declared: “All those wars of aggression, together with political and cultural aggression, have caused Chinese to hate imperialism.”

130 . Mao’s xenophobia in this regard can be seen both as a manifestation of nation-alist sentiment and a return to dynastic policies (of some dynasties including the most recent one) in the past. See Ross Terrill, The New Chinese Empire and What It Means for the United States (New York: Basic Books, 2003), p. 129.

131 . Mao, in fact, connected the two. One writer calls Mao the “embodiment of anti-imperialist nationalism.” See Edward Friedman, National Identity and Democratic Prospects in Socialist China (Armonk, NY: M. E. Sharpe, 1995), p. 117.

132 . Barnett, Communist China and Asia , p. 10. Barnett and other writers refer to Mao’s rule as totalitarian and see it as a very efficient political system.

133 . Ibid., p. 1. Barnett calls Mao’s China the most “dynamic, disrupting, and disturbing influences on the world scene.”

134 . Chou En-lai, “The Present International Situation, China’s Foreign Policy, and the Question of the Liberation of Taiwan,” (report to the National People’s Congress), Current Background , July 5, 1956, cited in Barnett, Communist China and Asia , p. 65.

135 . Xinhua, March 17, 1954, cited in ibid. 136 . Barnett, Communist China and Asia , p. 66.

Notes ● 239

137 . Ibid., pp. 66–67. Also see Hinton, China’s Turbulent Quest , p. 174. Hinton notes that the modern era has hence seen China try to improve its status and transform itself into a nation. In fact, one can say that the most complex of all of China’s foreign policy goals has been its preoccupation with status and influence and restoring its exalted position in the world.

138 . Speech by Mao Tse-tung to the Supreme Soviet of the USSR on September 21, 1957, in Current Background , November 13, 1957.

139 . There were a number of newspaper, magazine, and book accounts of China that portrayed what Mao had done as frightening. This certainly reflected a kind of respect the West now gave China.

140 . See John F. Copper and Daniel S. Papp (eds.), Communist Nations’ Military Assistance (Boulder, CO: Westview Press, 1983), preface.

141 . Hinton, China’s Turbulent Quest , p. 303. The United States sought to avoid provoking China from direct involvement in the Vietnam War and thus restrained its military actions.

142 . See Harold C. Hinton, Three and a Half Powers: The New Balance in Asia (Bloomington, IN: University of Indiana Press, 1975).

143 . As noted earlier, this theme was put forward in Lenin’s book Imperialism: The Highest Stage of Capitalism. Lenin argued that through imperialism, especially colonialism, the rich industrial countries exploited their colonies’ peoples more than their own workers, due to differences in race, culture, etc., and made huge profits that they used in part to bribe their own workers out of being revolutionary. Thus the vanguard of the Communist revolution became Third World countries.

144 . Lin Piao, “Long Live the Victory of People’s War,” September 3, 1965, from K. Fan (ed.), Mao Tse-tung and Lin Piao: Post Revolutionary Writings (Garden City, NY: Anchor Books, 1972), p.401.

145 . This point is discussed in Volume 1, Chapter 1 . 146 . Cited in John Wilson Lewis and Litai Xue, China Builds the Bomb (Stanford,

CA: Stanford University Press, 1968), p. 238. 147 . Garver, Foreign Relations of the People’s Republic of China , pp. 260–61. 148 . China called this an important event. Premier Zhou Enlai immediately called

for the complete prohibition of nuclear weapons. Clearly China could not be excluded from the issue of nuclear weapons that was a matter of the big pow-ers. See Wilson Lewis and Litai, China Builds the Bomb , p. 1.

149 . China’s decision to go nuclear, of course, came from the fact that in addition to it giving China face, China had been intimidated by the United States with nuclear weapons and China was upset with the Soviet Union. See Garver, The Foreign Policy of the People’s Republic of China , pp. 260–61.

150 . Barnett, China and the Major Powers in East Asia , p. 160. The author says this was a major point of disagreement between the Soviet Union and China and related to China’s efforts to attain global status.

151 . This point will be discussed in following chapters. China’s aid in this realm was quite restricted. But, suffice it to say here, doing this put China in the same class as the United States and the Soviet Union.

240 ● Notes

152 . See Copper, China’s Foreign Aid , p. 1. 153 . As one author notes when assessing China’s economy: “When all the quali-

fications are considered, it is the case that changes in the relative economic strength of nations have had the greatest influence on shifts in the interna-tional balance of power in the twentieth century.” Dwight H. Perkins, “The International Consequences of China’s Economic Development,” in Richard H. Solomon (ed.), The China Factor: Sino-American Relations & the Global Scene (Englewood Cliffs, NJ: Prentice-Hall, 1981), p. 124.

154 . See Copper, China’s Global Role , Chapter 1. 155 . Charles A. Kupchan, No One’s World: The West, The Rising Rest, and the

Coming Global Turn (Oxford: Oxford University Press, 2012), chapter 5. 156 . See Chapter 3 for details on China’s economic success. For a recent assessment

of what this means, see Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century (New York: Basic Books, 2010).

157 . Zhang Weiwei, The China Wave: Rise of a Civilizational State (Hackensack, NJ: World Century, 2011); Ann Lee, What the U.S. Can Learn from China: An Open-Minded Guide to Treating Our Greatest Competitor as Our Greatest Teacher (San Francisco, CA: Berrett-Koehler, 2012); Eric X Li, “The Life of the Party: The Post-Democratic Future Begins in China,” Foreign Affairs , January/February 2013.

158 . Yong Deng, China’s Struggle for Status: The Realignment of International Relations (New York: Cambridge University Press, 2008), p. 1.

159 . Camilleri, Chinese Foreign Policy , p. 8. 160 . Chin-Hao Huang, “China’s Soft Power in East Asia: A Quest for Status and

Influence?” National Bureau of Asian Research Special Report #42, January 2013, p. 5.

161 . Deng Xiaoping, “Heping Fazhan Shi Dangdai (Shijie De Lingda Wenti,” Peace and Development are the Two Major Issues in the Contemporary World), in Deng Xiaoping Wenxuan, Vol. 3 (Selected Works of Deng Xiaoping) (Beijing: Remin Chubanshe, 1993), p. 105.

162 . Deng, China’s Struggle for Status , p. 2. 163 . Ibid., p. 3. 164 . Deng, China’s Struggle for Status, p. 8; Nathan and Scobell, China’s Search for

Security, chapter 10. 165 . David Shambaugh, China Goes Global: The Partial Power (Oxford: Oxford

University Press, 2013), p. 210. 166 . Huang, “China’s Soft Power in East Asia,” pp. 6–7. 167 . Shambaugh, China Goes Global, pp. 210–16. 168 . Nathan and Scobell, China’s Search for Security , p. 321. 169 . Foreign aid is not normally defined as soft power. But to China it is. Or at least

it grew out of the growth of China’s major element of hard power: economic power. See Nathan and Scobell, China’s Search for Security , p. 318.

170 . Huang, “China’s Soft Power in East Asia,” p. 8.

Notes ● 241

171 . Lye Liang Fook, “China’s External Relations and Global Governance,” in Wang and Zheng (eds.), China: Development and Governance , pp. 294–95.

172 . Nathan and Scobell, China’s Search for Security , pp. 321–22 173 . Lai Hongyi, “China’s Soft Power,” in Wang and Zheng (eds.), China:

Development and Governance , p. 502. 174 . Ibid., p. 503. 175 . Huang, “China’s Soft Power in East Asia,” pp.8–9. 176 . Nathan and Scobell, China’s Search for Security , pp. 322–23. 177 . David Lampton, The Three Faces of Chinese Power: Might, Money and Minds

(Berkeley: University of California Press, 2008), p.172. This point is discussed at greater length in chapter 7.

178 . Thomas J. Christensen, The China Challenge: Shaping the Choices of a Rising Power (New York: Norton, 2015), p. 18.

179 . M. Taylor Fravel, Strong Borders, Secure Nation: Cooperation and Conflict in China’s Territorial Disputes (Princeton, NJ: Princeton University Press, 2008), pp. 46–47.

180 . See the two chapters on China’s aid to African countries that follow. Of course, China’s policy of not attaching conditions to its aid was also appreci-ated elsewhere.

181 . Deng, China’s Struggle for Status , pp. 222–23. 182 . Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese

Foreign Policy in an Age of Economic Independence,” in Lampton (ed.), The Making of Chinese Foreign and Security Policy , pp. 220–22.

183 . David Piling, “Vice-Premier Defends Chinese Policy, Financial Times, January 28, 2010.

184 . Sutter, Chinese Foreign Relations , p. 86. 185 . See Michael D. Swaine, America’s Challenge: Engaging a Rising China in the

Twenty-First Century (New York: Carnegie Endowment, 2011), p. 210, includ-ing the sources he cites in footnote no. 115.

186 . Deng, China’s Struggle for Status , p. 223. 187 . Kupchan, No One’s World , p. 95. 188 . See Jonathan D. Pollack, “China as a Military Power,” in Onkar Marwah and

Jonathan D. Pollack (eds.), Military Power and Policy in Asian States: China, India, Japan (Boulder, CO: Westview Press, 1980), p. 44.

189 . It is believed in the West that China was not historically a militaristic power. However, comparing the Roman Empire at its peak and Han Dynasty China, with about 60 million in population each, the Roman Empire had an estimated 350 thousand-man army while China had an army of one million. Rome ruled by controlling the top of each area that it governed; China forced the assimila-tion of people it ruled. See Steve Mosher, Hegemon: China’s Plan to Dominate Asia and the World (San Francisco, CA: Encounter Books, 2000), pp. 30–32. According to a Chinese scholar, China engaged in 6,000 battles from the twenty-sixth century BC to the early 1900s, more than one-third of the battles that occurred in the world at this time. See Peng Guangqian and Yao Youshi,

242 ● Notes

The Science of Military Strategy (Beijing: Military Science Publishing House, 2005), p. 3, cited in Lampton, The Three Faces of Power , p. 15.

190 . See Robert G. Sutter, Chinese Foreign Relations: Power and Policy Since the Cold War (Lanham, MD: Rowman and Littlefield, 2008), p. 137. Over the first three decades of its existence the People’s Republic of China deployed its military 11 times beyond its borders. See Allen S. Whiting, “The Use of Force in Foreign Policy by the People’s Republic of China,” The Annals , July 1972, pp. 55–66. Of the three major conflicts after World War II, the Korean War, the Vietnam War, and the Sino-Vietnam War, China was involved in all of them. See Kishore Mahbubani, “America’s Place in the Asian Century,” Current History , May 2008, p. 195.

191 . For this, China’s military weakness and now its strength have also been very salient issues in recent history and in international politics. See Pollack, “China as a Military Power,” p. 43.

192 . Mosher, Hegemon , introduction. 193 . According to the Stockholm International Peace Research Institute, this will

happen by 2035. For further details, see Douglas Stuart, “San Francisco 2.0: Military Aspects of the U.S. Pivot Toward Asia,” Asian Affairs , October-December 2012, pp. 206–7.

194 . See Nathan and Scobell, China’s Search for Security . In fact, this is the theme of this book.

195 . Ibid., chapter 1. 196 . See, for example, Jenny Clegg, China’s Global Strategy: Towards a Multipolar

World (London: Pluto Press, 2009). More relevant to China’s foreign aid, one writer states that China cannot cope with American military power directly and therefore must rely on its “massive economy to counter . . . balancing efforts against it.” Aaron L. Friedberg, “Bucking China: An Alternative to U.S-China Policy,” Foreign Affairs , September/October 2012, p. 50.

197 . Shambaugh, China Goes Global , pp. 210–16. 198 . Michael D. Swaine and Ashley J. Telis, Interpreting China’s Global Strategy

(Santa Monica, CA: Rand Corporation, 2000). 199 . Nathan and Scobell, China’s Search for Security , pp. 319–26. 200 . See Mao Tse-tung, “Address to the Preparatory Committee of the New Political

Consultative Congress,” and “The Chinese People Have Stood Up,” both in Selected Works of Mao Tse-tung (Peking: Foreign Languages Press, 1977).

201 . For details, see Copper, China’s Global Role , chapter 5. The reason for the large number of ships and planes was that the government took almost all planes and ships when it assumed power.

202 . See, for example, Arthur Huck, The Security of China (New York: Columbia University Press, 1970). A Chinese map reprinted on page 8 shows the pres-ence of US forces surrounding China.

203 . This was called Mao’s “paper tiger” theory of American imperialism. He argued that America may have a temporary tactical advantage, but strategically it was doomed to failure. According to one writer, it was a “vivid propaganda slogan”

Notes ● 243

needed to raise morale at a time when the “overbearing might of the United States was likely to depress it.” This writer also calls it the “spiritual factor” of mass revolutionary consciousness. See John Gittings, The World and China, 1922–1972 (New York: Harper and Row, 1974), p. 147.

204 . A US government report records that China provided US$2.6 billion (in 1975 dollars) from 1967 to 1976 to Third World countries—making it the fifth largest arms exporter. See World Military Expenditures and Arms Transfers, 1967–1976 (Washington: U.S. Arms Control and Disarmament Agency, 1978), p. 126.

205 . This was true during the first part of the Korean War; then it failed. As in the past China often used aid to fight or avoid wars only to have to engage later.

206 . Liselotte Odgaard, China and Coexistence: Beijing’s National Security Strategy for the Twenty-First Century (Baltimore, MD: Johns Hopkins University Press, 2012), p. 1.

207 . For a very thorough assessment of this problem, see Bruce A. Elleman, Stephen Kotkin, and Clive Schofield (eds.). Beijing’s Power and China’s Borders (Armonk, NY: M. E. Sharpe, 2013). Also see C. Fred Bergsten, Bates Gill, Nicholas R. Lardy, and Derek Mitchell, China: The Balance Sheet (New York: Public Affairs, 2006), back cover.

208 . Bergsten et al., China: The Balance Sheet, p. 120. 209 . Copper, China’s Foreign Aid , p. 9. Specific instances of China using foreign aid

donations to negotiate border agreements are discussed in subsequent chapters of this book.

210 . Ibid., p. 118. 211 . Ibid., pp. 11–13. 212 . Specific instances of various countries supporting China on these matters are

cited in following chapters. 213 . Choudhury, China in World Affairs , p. 253. 214 . Ibid. 215 . Details of this will be provided in Volume 2, Chapter 2. 216 . In 1979, after China’s People’s Liberation Army fought a difficult war with

Vietnam and did not perform well, Deng had the opportunity to extinguish egalitarianism and politics from the military and upgrade the military’s capa-bilities to fight more advanced conflicts.

217 . Gilks and Segal, China and the Arms Trade , p. 1. 218 . As will be seen below this connected to China’s need for energy, raw materials,

and markets. 219 . For details, see Paul H. B. Godwin, “The PLA Faces the Twenty-First

Century: Reflections on Technology, Doctrine, Strategy and Operations,” in James R. Lilley and David Shambaugh (eds.), China’s Military Faces the Future (Armonk, NY: M. E. Sharpe, 1999), p. 48.

220 . As we will see in following chapters, China usually opted simply for use of bases. The standard explanation is that China wanted to avoid giving the

244 ● Notes

impression it was an expansionist power. Another explanation is that China’s “assimilative definition” of the Chinese state and the consequent difficul-ties in building alliances or an alliance system (which China has obviously rejected) are incompatible with its acquiring bases. See Odgaard, China and Coexistence , p. 198.

221 . Lampton, The Three Faces of Chinese Power , p. 42. 222 . For details on China’s intent in expanding its military capabilities and espe-

cially in developing power projection capabilities, see Richard D. Fisher Jr., China’s Military Modernization: Building for Regional and Global Reach (Stanford, CA: Stanford University Press, 2010), pp. 171–73.

223 . This issue is discussed in detail in Volume 2, Chapter 1. 224 . This issue is discussed in detail in Volume 2, Chapter 1 and Volume 2,

Chapter 2. 225 . Sutter, Chinese Foreign Relations , chapter 5. 226 . China used aid funds to enhance its domestic intelligence gathering. It also

used aid money to expand efforts to inspect containers and ships going to the United States. See Michael D. Swaine, “China’s Strategy and Security in the Post-Cold War Era,” in Brantley Womack (ed.), China’s Rise in Historical Perspective (Lanham, MD: Rowman Littlefield, 2010), p. 92.

227 . This issue will be pursued in detail in the next chapter. 228 . Swaine, “China’s Strategy and Security in the Post–Cold War Era,” in Womack

(ed.), China’s Rise in Historical Perspective , p. 93. 229 . Rosemary Foot and Andrew Walter, China, the United States, and Global

Order (Cambridge, MA: Cambridge University Press, 2010), p. 46. 230 . Bates Gill and Chin-Hao Huang, “China’s Expanding Peacekeeping Role: Its

Significance and Policy Implications,” SRI Policy Brief , February 2009. 231 . Howard J. Dooley, “The Great Leap outward: China’s Maritime Renaissance,”

Journal of East Asian Affairs , Spring/Summer 2012, p. 72. 232 . Ibid., p. 53 and 62–63. 233 . “Colonel: China Must Establish Overseas Bases, Assume the Responsibility of

a Great Power,” Global Times , February 5, 2009. ( Global Times is connected to People’s Daily the official newspaper in China and its articles often reflect the views of the Chinese Communist Party and the government.) This view stands in sharp contrast to China’s previously announced position on foreign bases. A 1995 white paper dealing with arms control stated, “China does not station any troops or set up any military bases in any foreign country. China’s 2000 National Defense White Paper said the same thing. See Michael S. Chase and Andrew S. Erikson, “Changes in Beijing’s Approaches to Overseas Basing?” China Brief, September 24, 2009.

234 . Ed Blanche, “Enter the Tiger and the Dragon,” The Middle East , April 2009, pp. 7–9.

235 . Chase and Erickson, “Changes in Beijing’s Approaches to Overseas Basing?” The authors note that the United States used this policy at one time.

236 . China’s major exports until the mid-1980s were (in order) energy (petro-leum and coal), textiles, and food. See Susumu Yabuki, China’s New Political

Notes ● 245

Economy: The Giant Awakes (Boulder, CO: Westview Press, 1995), pp. 155–56. In the mid-1980s, China was the Far East’s largest petroleum exporter. See David Zweig and Bi Jianhai, “China’s Global Hunt for Energy,” Foreign Affairs , September-October 2005 p. 25.

237 . There are a few exceptions to this. The Tan-Zam Railroad China build in Tanzania and Zambia that helped Zambia ship its copper to port, which China needed at the time, is the most obvious one. See Copper, China’s Foreign Aid , p. 102.

238 . This is shown by the fact that the Ministry of Commerce and the National Development and Reform Commission have published lists of countries and resources where investment that is subsidized by the government is to be directed. See, Zweig and Bi, “China’s Global Hunt for Energy,” p. 26.

239 . This issue, of course, will be pursued in the following pages. 240 . Kang Wu, Fereidun Fesharaki, Sidney B. Westley, and Wadhyawan

Prawiraatmadja, “Oil in Asia and the Pacific: Production, Consumption, Imports, and Policy Options,” Asia Pacific Issues , August 2008, p. 5.

241 . Ibid. 242 . Statistical Review of World Energy, 2008 cited in Edward A. Cunningham,

“Energy Governance: Fueling the Miracle,” in Joseph Fewsmith (ed.), China Today, China Tomorrow: Domestic Politics, Economy and Society (Lanham, MD: Rowman Littlefield, 2010), p. 224. Data here are for 2000–2007.

243 . Erica S. Downs, “China’s Energy Rise,” in Womack (ed.), China’s Rise in Historical Perspective , p. 171.

244 . World Energy Outlook 2007 (Paris: OECD, 2007), p. 80. 245 . “Iron Rations,” Economist , March 15, 2008, p. 8. 246 . Adding to the concern is the fact China lacks large strategic reserves. In 2008

it was 30 days compared to Japan’s 131 days. See Ryan Clarke, “Chinese Energy Security: The Myth of the PLAN’s Frontline Status,” The Letort Papers (Strategic Studies Institute, U.S. Army), August 2010, p. 18.

247 . Carrie Liu Currier and Manochehr Dorraj, “The Strategic Implications of China’s Energy Engagement with the Developing World,” in Carrie Liu Currier and Manochehr Dorraj (eds.), China’s Energy Relations with the Developing World (New York: Continuum, 2011), p. 6.

248 . Bo Kang, An Anatomy of China’s Energy Insecurity and Its Strategies (Richmond, WA: Pacific Northwest Laboratory, December 2005), p. 11, cited in Lampton, p. 245.

249 . Kang Wu et al., “Oil in Asia and the Pacific: Production, Consumption, Imports, and Policy Options,” p. 3.

250 . Naughton, The Chinese Economy , pp. 334–36. Exacerbating the situation, China’s use of energy has been and remains quite inefficient. China uses three times the global average to produce a unit of the gross national product, four times the United States and eight times Japan. See Will Hutton, The Writing on the Wall: Why We Must Embrace China as a Partner or Face It as an Enemy (New York: Free Press, 2006), p. 25.

251 . Naughton, The Chinese Economy , pp. 333–34.

246 ● Notes

252 . Lampton, The Three Faces of Chinese Power , p. 205. 253 . Elizabeth Economy, “The Great Leap Backward,” Foreign Affairs , September-

October 2007, p. 46. The estimate came from the Chinese Academy of Social Sciences.

254 . Hutton, The Writing on the Wall, p. 25. 255 . Naughton, The Chinese Economy , pp. 333–43. 256 . In 2010, Premier Wen Jiabao declared he would use an “iron hand” to improve

energy use. Subsequently the government closed more than 2,000 cement plants, steel mills, and other factories regarded as energy inefficient. See China Daily , May 6, 2010, and September 20, 2010.

257 . This point will be discussed throughout the next five chapters. 258 . Cited in Ben Barber, “Beijing Eyes South China Sea with Sub Purchase,”

Washington Times , March 7, 1995. 259 . The document can be found at novexcn.com/maritime_law_main.itml. For

an assessment of it, see Wu Huanning, “China’s Maritime Law,” unpublished paper (online at austlii.edu.au/au/journals/ANZMLJ/1988/2.pdf).

260 . Cao Zhi and Chen Wangjun, “Hu Jintao Emphasizes . . . A Powerful People’s Navy That Meets the Demands of Our Army’s Historic Mission,” Xinhua, February 17, 2006.

261 . In 2003 Chinese President Hu Jintao spoke of what he called “the Malacca Dilemma,” noting that if “certain major powers” (referring to the United States) were bent on controlling the strait, China would have no indepen-dent source of energy except for what it could get over land. See U.S.-China Economic and Security Review Commission, “2010 Annual Report to Congress,” Chapter 3, Section 1, November 2010. (online at uscc.gov/annual_report/2010/Chapter3_Section_1%28page119%29.pdf).

262 . Robert D. Kaplan, “Center Stage for the Twenty-First Century: Power Plays in the Indian Ocean,” Foreign Affairs , March/April 2009, p. 28.

263 . Lampton, The Three Faces of Chinese Power , p. 245. 264 . Ed Blanche, “Weaving a New Silk Road,” The Middle East, May 2009, p. 14. 265 . Wen Han, “Hu Jintao Urges Breakthrough in ‘Malacca Dilemma,’” Wen Wei

Po, January 14, 2004 (online at wenweipo.com). 266 . Hutton, The Writing on the Wall, p. 26. While China has expended consider-

able aid in helping recipient nations build pipelines, rail lines, and railroads to transport oil and gas, China’s net reliance on sea transport will likely con-tinue to increase. See 2012 Report to Congress of the U.S.-China Economic and Security Review Commission , p. 331.

267 . William H. Overholt, Asia, America and the Transformation of Geopolitics (New York: Cambridge University Press, 2008), p. 55.

268 . 2012 Report to Congress of the U.S.-China Economic and Security Review Commission , p. 330.

269 . Overholt, Asia, American and the Transformation of Geopolitics , p. 134. It may also be noteworthy that the United States has made little or no effort to con-struct a regional organization that would deal with energy security, but rather

Notes ● 247

(especially from the Chinese point of view) has made efforts to strengthen its security relations with Japan and India. See p. 241.

270 . Sutter, Chinese Foreign p. 30. 271 . Hutton, The Writing on the Wall , p. 12. 272 . Ibid. 273 . Michael T. Calare, Resource Wars: The New Landscape of Global Conflict

(New York: Henry Holt and Company, 2001), p. 112. 274 . Justin McCurry, “Obama says US Will Defend Japan in Island Dispute with

China,” Guardian , April 24, 2014 (online at theguardian.com). 275 . Cited in 2012 Report to Congress of the U.S.-China Economic and Security

Review Commission , p. 329. 276 . This issue is discussed further in the concluding chapter of Volume 3, includ-

ing different figures on the amounts and percentages of its aid and investments for this purpose.

277 . Jian Dong, “China Stresses Imminence of Changing Extensive Development Model,” China Economic News, August 1, 1005, pp. 1–2, cited in Bergsten et al., China: The Balance Sheet , p. 33.

278 . “Iron Rations,” p. 6. 279 . “A Ravenous Dragon,” Economist , March 15, 2008, p. 4. 280 . Martin Jacques, When China Rules the World: The End of the Western World

and the Birth of a New World Order (New York: Penguin, 2012), pp. 168–69. 281 . Brian McCartan, “China Rubber Demand Stretches Laos,” Asia Times ,

December 19, 2007 (online at atimes.com). 282 . “The Perils of Abundance,” Economist , March 15, 2008, p. 22. 283 . It should be noted that these are the critical problems for China, not the costs

of resources. As of 2004, China was spending around 4 percent of its gross domestic product for energy and resource imports—less than Japan or Taiwan spent during their periods of rapid economic growth and less than many oil-importing countries during the 1970s after the increase of oil prices. See Bergsten et al., China: The Balance Sheet , p. 33.

284 . Naughton, The Chinese Economy, pp. 89–90. 285 . Ibid., p. 251. 286 . Lampton, The Three Faces of Power , p. 243. 287 . John Wong, “How Secure Is China’s Food Security?” in Wang and Zheng

(eds.) China: Development and Governance , p. 64. 288 . Ibid., pp. 64–65. 289 . Nathan and Scobell, China’s Search for Security , p. 18. The authors note

that north China has suffered from a severe water shortage since the early 1980s and China launched a large water transfer project. Also, China’s water shortage will be exacerbated by global warming, about which Chinese leaders are aware.

290 . Wong, “How Secure Is China’s Food Security,” p. 65. 291 . See “Buying Farmland Abroad,” Economist , May 21, 2009 (online at econ-

omist.com). China has obtained access to 2.8 million hectares of land,

248 ● Notes

compared to South Korea that ranks second with less than 800,000. Also see Corin Smaller, Qui Wei, and Liu Yalan, “Farmland and Water: China Invests Abroad,” International Institute for Sustainable Development,” August 2012, p. 1. The authors found reports of 86 Chinese projects involving 8.3 million hectares of land of which they could confirm half of these. This point is dis-cussed further in the concluding chapter of this book.

292 . At first China’s economy was said to be a “birdcaged” one, meaning that the bird (the economy) was allowed to fly, but within the cage (kept in bounds).

293 . In early 1982 Chen Yun (the Chinese Communist Party’s top economic expert at the time) spoke of a policy of “taking the planned economy as primary and market adjustments as secondary.” Chen’s comments were published in People’s Daily , January 26, 1982, cited in Yabuki, China’s New Political Economy , p. 43.

294 . Ezra Vogel, Deng Xiaoping and the Transformation of China (Cambridge, MA: Belknap Press), chapters 15 and 16.

295 . Ibid., p. 45. 296 . Maurice Meisner, The Deng Xiaoping Era: An Inquiry into the Fate of Chinese

Socialism, 1975–1994. (New York: Hill and Wang, 1996), p. 208. 297 . Ibid. 298 . James A. Gregor, Marxism, China and Development: Reflections on Theory and

Reality (New Brunswick, NJ: Transaction Publishers, 1995), p. 102. 299 . Yabuki, China’s New Political Economy , p. 213. 300 . Ibid., pp. 216–17. 301 . Bergsten et al., China: The Balance Sheet , p. 32. 302 . Ibid., p. 24. No time frame is cited, but it assumed this is before or up to 2005

(when the book was published). 303 . Ho-fung Hung, “A Caveat: Is the Rise of China Sustainable,” in Ho-fung

Hung (ed.), China and the Transformation of Global Capitalism (Baltimore, MD: Johns Hopkins University Press, 2009), p. 194.

304 . Official data in China indicated that in 2002 there were 83 million workers employed in manufacturing, though estimates were much higher (109 million). Either figure dwarfed other countries. The total of the G-7 major industrial countries was 53 million. There did not seem to be ways to increase manufac-turing jobs any more. See Judith Banister, “Manufacturing Employment in China,” Monthly Labor Review , July 2005, p. 11.

305 . Nathan and Scobell, China’s Search for Security , p. 283. 306 . Maria Hsia Chang, The Labors of Sisyphus: The Economic Development of

Communist China (New Brunswick, NJ: Transaction Publishers, 1998), pp. 114–15.

307 . Ibid. p. 235. The author cites Wang Shan, Looking at China through the Third Eye for the view of the unemployed being a threat to the government.

308 . Bergsten et al., China: The Balance Sheet , p. 194. 309 . Sarah Y. Tong and John Wong, China’s Economy,” in Robert E. Gamer (ed.),

Understanding Contemporary China (Boulder, CO: Lynne Rienner, 2008), pp. 146–47.

Notes ● 249

310 . World Factbook (available online at https://www.cia.gov/library/publications/the-world-factbook/print/ch.html ). This reference book is updated periodi-cally. It was viewed in February 2009. The data are for 2008.

311 . Tony Saich, China: Sociopolitical Issues, 2005–2010 (Cambridge, MA: Kennedy School of Government, Harvard University, 2005) cited in Hutton, The Writing on the Wall , p. 31.

312 . Ted C. Fishman, China Inc.: How the Rise of the Next Superpower Challenges America and the World (New York: Scribner, 2005), p. 75. It is worth noting that few unemployed workers had unemployment insurance. According to one source, only 2 percent had either full or partial insurance. See China Human Development Report 2005, p. 42, 65 and 87, cited in Lampton, The Three Faces of Chinese Power , p. 222.

313 . Ibid., p. 40. 314 . Hutton, The Writing on the Wall , p. 47. 315 . Ibid., p. 31. 316 . Bergsten et al., China: The Balance Sheet , p. 41. 317 . See Elizabeth J. Perry, “Popular Protest: Playing by the Rules,” in Joseph

Fewsmith (ed.), China Today, China Tomorrow (New York: Rowman and Littlefield, 2010), p. 27.

318 . Tom Orlik, “Unrest Grows as Economy Booms,” Wall Street Journal , September 26, 2011 (online at wsj.com).

319 . James Kynge, China Shakes the World: The Titan’s Rise and Troubled Future—and the Challenge for America (Boston, MA: Houghton Mifflin, 2006), pp. 52–53.

320 . “China’s Unemployment Still Serious despite Labour Shortage—PM,” BBC Monitoring International Reports, February 27, 2010 (online at find.gale-group.com).

321 . George W. Bush, Decision Points (New York: Crown Publishers, 2010), p. 427.

322 . Chinese Military and Economic Programs in the Third World: Growing Commercial Emphasis,” Central Intelligence Agency, June 12, 1984, cited in Shino Watanabe, “China’s Foreign Aid,” in Kim and Porter (eds.), Foreign Aid Competition in Northeast Asia , p. 64.

323 . “Chinese Government Concessional Loans,” Export-Import Bank of China, cited in Henry Wing Yep, “China’s Foreign Aid to Asia: Promoting a ‘Win-Win Environment” (unpublished master’s degree thesis), p. 30.

324 . In 1998, Jiang Zemin encouraged going abroad to promote the restructur-ing of domestic industries. See Hideo Ohashi, “China’s Regional Trade and Investment Profile,” in David Shambaugh (ed.), Power Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2005), p. 88.

325 . Jianwei Wang, “China’s New Frontier Diplomacy,” in Sujian Guo and Jean-Marc F. Blanchard (eds.), “Harmonious World” and China’s New Foreign Policy (Lanham, MD: Lexington Books, 2008), p. 24. The “go out” policy was estab-lished in 1999 by the Chinese government with the help of the China Council for the Promotion of International Trade.

250 ● Notes

326 . Martin Wolf, Fixing Global Finance (Baltimore, MD: Johns Hopkins University Press, 2010), p. 140.

327 . Harry Harding, “The Uncertain Future of U.S.-China Relations,” in Guoli Liu (ed.), Chinese Foreign Policy in Transition (New York: Aldine De Gruyter, 2004), p. 184.

328 . David M. Lampton, “Think Again China,” in Liu (ed.) Chinese Foreign Policy in Transition , p. 169. Lampson cites noted economist Marcus Noland.

329 . Wolf, Fixing Global Finance , p. 165. 330 . Ibid., pp. 165–66. 331 . “China Faces Overproduction in 11 Sectors,” People’s Daily , December 18,

2005 (online at http://english.peopledaily.com.cn/200512/18/eng20051218_228948.html ).

332 . As will be seen in the chapters following, China has provided a number of countries with tariff-free privileges for their exports and has given aid to offset difficulties caused by China’s exports.

333 . Nathan and Scobell, China’s Search for Security , p. 266. 334 . In 2005, China revalued the Yuan by 23 percent. Given China’s foreign cur-

rency reserves were around 700 billion at the time and 70 percent was in US dollars, China suffered a loss of more than 100 billion. In 2007, the Chinese government established the China Investment Corporation to invest China’s foreign exchange better, but it suffered heavy losses. If China were to have revalued its currency in 2012 by the same amount as 2005 with a much larger foreign exchange position, its loss would have been around half a trillion.

335 . Ibid. 336 . “‘Marshall Plan’ with Chinese Characteristics,” Beijing Review , July 23, 2009,

p. 3. 337 . “Chinese Unemployment Will Become ‘More Severe,’ Wen Jiabao Warns,”

Reuters, July 18, 2012. The news service quotes the China Securities Journal , suggesting that the Chinese government viewed this as a security problem.

338 . Tom Orlik, “Chinese Survey Shows a Higher Jobless Rate,” Wall Street Journal, December 7, 2012 (online at wsj.com).

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Index

22nd Soviet Party Congress of the Communist Party of the Soviet Union, 137

Academy of International Business Officials, 126

ADB (Asian Development Bank), 107Afghanistan, Sino-Soviet split and, 139Africa

aid without conditions and red tape, 147

China’s aid (1956–1973), 29China’s aid terms, 13concessional aid to, 2009, 146estimates of aid to, 32financial help in 2008 recession, 25–6foreign non-bond investments in, 36free-trade zones in, 25

Afro-Asian Conference, 78, 138, 152agriculture

agricultural aid vs. industrial aid, 5agricultural communes, 89, 91–2,

160–1agricultural production issues,

160–1agricultural reforms under Deng,

91–2lack of focus on under Mao, 87–8from surplus to deficit, 2001–2004,

120

aid and investment monies blurred, 9, 22–3, 27–8, 37–8

aid and investment terms used alternatively, 37–8

aid competition with Soviets, 78–9, 136–9, 143, 151–2

air pollution, 157Albania

aid competition with Soviets, 138Chinese aid terminated, 20feud over China’s US policies,

117–18military aid from China, 13, 14, 34as recipient of China’s aid (1953–

1964), 30analysts’ and scholars’ differences in aid

reporting, 29–31ancient China, prosperity of, 84–5anti-China alliances against military

aggression, 149antigovernment protests, 164anti-ideological/nonideological

worldview (Deng), 63Arab countries, foreign non-bond

investments in, 36armament as strategic area, 99arms as foreign aid. See military aid

from ChinaASEAN (Association of Southeast

Asian Nations), 25, 147

266 ● Index

Asia Pacific Economic Cooperation meeting, 53

Asian Development Bank (ADB), 107Asian Dragons’ development plans,

97, 103Asian financial crisis (Asian meltdown),

China’s aid during, 24, 144, 148Association of Southeast Asian Nations

(ASEAN), 25, 147asymmetric warfare, 154Australia, China’s tribute system

and, 52autarky, China as, 49, 64, 94–5, 105,

143automobile industry, 99

balance of power system, 62balance of trade as source of capital,

108Bandung Conference, 1955, 56Bank of China, 163Bear Stearns, investment in, 111Beijing consensus, 73, 81, 144Beijing University, 146beneficial cooperation for common

prosperity, 146bipolar system of superpowers, 55–6Blackstone, investment in, 111, 119–20bloc unity/bloc solidarity, 113, 130–4Board of Rites (China’s foreign

ministry), 50border dispute agreements and

concessions, 147, 151, 155borrowing program, conservative

(Deng), 108Brezhnev Doctrine, 136Buddhism, 46“Build Toward a Harmonious World

of Lasting Peace and Prosperity” (Hu UN speech), 145–6

Bureau for International Economic Cooperation (Ministry of Commerce), duties and responsibilities re foreign aid, 126

Burmaend of tribute system, 51as recipient of China’s aid

(1953–1964), 30

Cambodia, aid from China (Mao), 29, 31, 134

capitalism and communism, antagonistic contradiction of, 54

capitalism introduced (Deng), 44capitalist autocracy, 144Cayman Islands, investment funds in, 22cellular economy, 87Central Committee of Chinese

Communist Party, on Deng’s view of foreign aid, 80

Central Financial and Economic Affairs Leading Small Group, 125

Ceylon, aid data on, 31charity/humanitarian aid, 7, 17Chen Yi, 142Chen Yun, 95Chiang Kai-shek

alliance with US, 131New Life Movement, 47–8people’s war against (Mao), 57, 150–1reform and growth, 86relocation to Taiwan, 56

Ch’in (Qin) Dynasty, as legalism, 46China, People’s Republic of

from aid donor to recipient after 1978, 79, 118–19

as ancient meritocracy, 45ancient political philosophy, 44–9as autarky, 49, 64, 94–5, 105, 143as biggest recipient of foreign

investment, 2003, 107borrowing from global institutions

and Western countries, 19as capitalist economy, 21claims of Western aid given with

agendas, 23–4comprehensive national power, 70as conduit for Soviet aid to Korea

and Vietnam, 112–13, 114–15

Index ● 267

consumption vs. gross national product, 97–8

decentralization under Deng, 26early aid in relation to economy, 38economic growth during global

recession, 72–3economic growth plan in, 63–4economic situation, 1949, 86, 88–9established October, 1949, 133, 140foreign aid to others in times of own

famine, 137foreign exchange oversupply, 26,

105–12foreign investments, 22, 26–7formal split with Soviets, 135–6as fulcrum between US and USSR, 65future foreign policy goals, 121–2generous foreign aid policies, reasons

for, 116global hegemony pursuit expected, 121global influence with prosperity and

trade, 121goal of displacing US per Liu, 74historical isolation and wealth of, 49history of morality in government, 43as “immature giant” re energy needs,

156isolation in 1950s, 10–11as largest holder of foreign exchange

reserves from 2006, 109military status increase after

Tiananmen, 69as model for developing countries

(Deng), 143–4moderation of foreign policy, 1955,

56–7national interest and foreign

assistance relationship, 38–9as net recipient to net giver, 2004–

2005, 119as nuclear threat to West, 142–3peaceful coexistence in Constitution,

151posture of humility and self-restraint

(Deng), 66

regional organizations, shift to, 25on rise as West declines, 53seen as aggressive, 149, 153seen as generous with aid giving, 141as socialist market economy, 162as Third World country per Lin, 59UN, relations with, 17variety of forms, 15weathering recessions, 104

China Daily (newspaper)conflicting aid reports, 34on Exim Bank foreign assistance

loans, 128–9China Development Bank, 127, 129China Dream (Liu), 49, 74China International Center for

Economic and Technical Exchanges, 126

China International Fund, 129China Investment Bank, 108China Investment Corporation, 111, 129China Is Unhappy (Song), 74China National Petrol, 130China Network Corporation World,

146China Statistical Yearbook foreign aid

reports, 33–4China Trust and Investment

Corporation for Foreign Economic Relations and Trade, 108

China-Africa Development Fund, 129China-Japan confrontation, 158–9Chinamerica, 74China’s Destiny (Chiang), 48Chinese Academy of Sciences, 127Chinese civil war, 58, 86, 88, 113, 142Chinese Communist Party

abandonment of ideology under Deng, 21, 65, 84, 92, 97, 109

combating imperialism as goal, 131concern over too much aid giving, 19criticism of aid and investment

mistakes, 120as decimated under Mao, 61on Deng’s foreign aid policies, 80

268 ● Index

Chinese Communist Party—ContinuedDeng’s reforms attacked, 67divisions and functions, 125–6economic growth as first priority, 97hostility to US, 88Hu as head (2002), 70Jiang as head (1989), 48, 67, 95mercantilism policy, 109non-tariff barriers to imports, 101opposition to Deng’s alignment with

US, 64popularity with citizens, 148SOEs and, 98on soft power, 143–4support of economic policies, 97united front view of the world, 60on wasted years under Mao, 90–1,

143Xi’s forecasts for, 76See also Mao Zedong

Chinese currency, valuation problems, 28

Chinese laborers and technicians as foreign aid. See technical assistance as foreign aid

Chinese Red Cross, emergency aid to disaster areas, 17

Chinese universal kingship, 140Chinese view of China, 85Ch’ing (Qing) Dynasty, 51, 86, 149Chunxiao gas field, 158city and countryside world division, 59civil aviation as strategic area, 99clean energy projects, 25, 147, 157Clinton, Bill, 52–3, 69coal as strategic area, 99coal consumption, 156–7Cold War

China’s military spending after, 153China’s situation after, 68, 119Cold War mentality vs.

multilateralism, 71“new cold war” between China and

US (Deng), 149Western aid giving during, 5

communications networks in poor countries, 146

communism and capitalism, antagonistic contradiction of, 54

Communist Bloc nationsadvantages of China joining, 130–2aid to, 10–11bloc unity/bloc solidarity, 113,

130–4as China’s community under Mao,

55, 77, 113Communist bloc aid, 10–11, 112military aid for government

destabilization, 7relationship decline under Mao, 59,

78–9trade and diplomatic relations with,

133–4Communist (Soviet) worldview

adopted, 1949, 44Comprehensive National Power

doctrine, 150concessional loans, 19, 34, 128–9, 165Confucian Institutes and classrooms

abroad, 145Confucianism, 45–8, 67construction industry, 99consumerism as low priority, 163Cuba

$60 million unrepaid loan, 117aid from China under Mao, 134

culture/cultural diplomacy as factor of national power, 145–6

currency devaluations during Asian Financial Crisis, 148

currency inflation rates, grant factor and, 14

DAC (Development Assistance Committee), foreign aid defined, 1–2

Dai Bingguo, 74Dalian harbor, 114debate on foreign aid effectiveness,

117–18

Index ● 269

debt cancellation announcements, 26, 34, 146

decentralization under Deng, 92–3defensive realism, 66democratic centralism, 131Democratic Republic of the Congo,

China’s aid for peacekeeping, 25Deng Xiaoping

capitalism introduced, 21, 44decentralization under, 26, 130development plan drew international

investors, 106–7economic growth under capitalist

model, 84economic plan, terms for, 144economic reforms launched, 19energy and resource import needs

under, 156era of reform, 61–2foreign aid cutbacks, 79–80foreign assistance programs

objectives, 44hostility to Soviets, 139humility with power, 144ideologies attributed to, 61–3independent foreign policy

introduced, 64–5instructions on leaving office, 66military, shifts and improvements

in, 152–3nonideological/anti-ideological

worldview, 63Open Door Policy, 64political acumen and people skills, 93as proponent of ethical government,

48reversals of Mao’s policies, 91–2SEZs established, 100“socialism with Chinese

characteristics,” 162south coastal China trip, 95–6technology and material incentives

in aid program, 21Three Worlds theory, 60worldview of, 61–7

Department of Aid to Foreign Countries (Ministry of Commerce), 126

Department of Policy Planning (MOFA), 126

developing countriesaid for access to resources, 27arms aid to, 33China as competitor for aid, 11, 79,

118China as developing country, 27, 143China Investment Corporation and,

111China vs. US aid to, 39China’s development model and, 54China’s use of UN veto power for,

119economic growth, 38, 103–4financial help for under Mao, 77–9foreign aid vs. investments, 29industry growth facilitated by

Communist aid, 5investments in, 22, 37, 129loan repayment conditions, 4, 9Mao’s goals in helping, 13Mao’s intermediate zone cultivated,

77–8Mao’s worldview of, 142Marshall Plan-like foreign assistance

program (2009), 167technical assistance as foreign aid, 7,

15–16, 19–20, 24, 34, 113, 115as tools of imperialism, 142unequal market access problems,

8, 166united front view of the world

and, 60Zhao on, 79–80

Development Assistance Committee (DAC), foreign aid defined, 1–2

Diaoyu or Senkaku Islands, 159domestic consumption, control of, 102domestic economy, risk of investment

in, 120dual adversary theory, 59

270 ● Index

East Germany, aid to, 116–17Eastern China, prosperity of, 84–5economic and technological

cooperation principles (1983), 19economic deterrence, 74economic growth

under capitalist model, capital accumulation and, 105–8

developing vs. developed countries, 103–4

optimism for continuation, 103vs. other countries, 1978–present,

101sustainability, 102–3vs. United States, 101, 103

economic miracle, sustaining, 95–105educational facilities, 104egalitarianism, 21Egypt

aid data on, 31as recipient of China’s aid

(1953–1964), 30as recipient of China’s aid

(1956–1973), 29“Eight Guidelines on Foreign

Economic and Technological Aid,” 137–8

eight point plan, 25eight principles of foreign aid,

18–19, 40Eight Virtues of ancient times, 48Eighth National People’s Congress, 163Eleventh Five-Year Plan (2006–2010),

80emperor as t’ ien-tzu (Son of Heaven),

44–5, 47, 50energy and resource needs, 154, 155–61enterprise resident, 8entrepreneurial spirit of Chinese

people, 103equity capital transfers, 8ethical diplomacy, 57ethical rule and moral government vs.

legalism, 46

ethics in government, foreign aid policies and, 47

European bond purchases, 146European investments, 111European-style socialism, 162Executive Bureau of International

Cooperation, 126Eximbank (Export-Import Bank of

China), 21–2, 127, 128, 165export growth, 94–5, 100external investments not defined by

FDI, 36

Fannie Mae, investment in, 111, 119–20

fatalism, moral connection to, 46FDIs (foreign direct investments), 8, 36financial assistance as alternative term

to foreign aid, 2financial help

as alternative term to foreign aid, 2, 37–8

announced vs. delivered, 2–3China’s aid as, 24

five elements as rule by manipulation, 46

Five Principles of Peaceful Coexistence, 1954, 56

Five Year Plan (1953–57), budget data, 31

FOCAC (Forum on China-Africa Cooperation), 25

food as foreign aid, 116–17food needs and security, 160–1Forbes Global 500 on SOEs, 130Foreign Affairs (journal), on Hu’s

worldview, 71Foreign Affairs Leading Small Group,

125foreign aid

as access to oil and raw materials, 21, 84, 156, 160

aid giving without conditions, 16–17to alleviate aggression fears, 153–4

Index ● 271

alternative definitions, 2author’s definition, 37bilateral aid preferred, 27–8claims of altruism for, 12–15Communist countries’ rationale and

emphasis, 5conditions imposed with, 5conflicting and inconsistent reports

of China’s aid amounts, 28–37, 39criticisms of China’s aid policies,

26–7as defined by DAC, 1–2, 27–8difficulty in defining, 1difficulty measuring, 28–37, 39emergency aid to disaster areas,

20, 24multilateral aid, lack of (period

one), 17as obligation of rich countries, 7–8pledged but not delivered, 12policies condemned by West, 81policy shift to mutual cooperation

(Deng), 19–20as political act, 2to promote China’s culture, 145publicity for, 146–7scholarships as, 16, 35, 127, 146small-project aid, 14–16as soft power, 145, 150as tool of foreign policy, 84transformed to profit-making

enterprises (period two), 20against US military power by proxy

(Mao), 150–1to US via treasury bond and product

purchases, 166–7Western countries’ rationale and

emphasis, 5See also military aid from China;

technical assistance as foreign aidforeign aid 1950–1979 (period one)

aid to non-Communist countries, 10–11, 13

analysis of aid during, 31

to countries richer than itself, 14economic cooperation,

1970s–1980s, 11effect on world conflicts in early

years, 38few external investments, 36increases in after 1960, 113loans, 1960s, 14military aid not acknowledged,

11–12military aid to North Korea, 10as recipient of global aid, 11reduction in 1970s, 31in socialist economy, 10in spite of poor economy, 112

foreign aid 1980–present (period two)to acquire overseas military bases, 153analysis of aid during, 31–2in capitalist economy, 10cutbacks under Deng and Zhao,

79–80eight principles, 18–19giving cautiously resumed, 1990s,

119as good global politics (Deng), 144increase in aid and investments,

1990s–2008, 11to increase markets for goods and

services, 165–6as marketing tool, 1990s, 80policy statements, 2005, 24vs. West and USSR, 18

foreign aid apparatus, 124–30foreign aid war. See aid competition

with Sovietsforeign assistance

as alternative term to foreign aid, 2, 37–8

as challenge to US, 38–9principles rather than policies, 40as state secrets, 39–40

Foreign Commerce and Foreign Affairs Ministries, 80

foreign direct investments (FDIs), 8, 36

272 ● Index

Foreign Economic Liaison Bureau, 117foreign exchange oversupply, 26,

105–12foreign investments by China

data from recipient countries, 32–3difficulty in defining, 1, 28, 41, 120as foreign direct investments (FDIs),

8, 36“going out/going global” policy, 22,

70, 80, 165historical growth, 9–11increases in, 80–1during period two, 36, 123SAFE and, 129as soft power, 121as version of foreign aid, 22, 37–8White Paper on Foreign Aid (2011)

on, 126See also Eximbank

foreign investments in ChinaChina as world’s highest recipient

(2003), 107decline after Tiananmen Square

incident, 95under Deng, 93–4economic growth from, 105growth in, 96record-breaking investments, 96–7SEZs and, 100

foreign military bases, 153, 155foreign policy goals, 121–4foreign policy influence, economic

development of recipients and, 38

foreign policy shift under Deng, 64–5foreign students in China, 16foreign trade under Deng, 94–5, 161–3Forum on China-Africa Cooperation

(FOCAC), 25Four Cardinal Principles of ancient

times, 48four principles of China’s relations with

developing countries, 79–80Freddie Mac, investment in, 111,

119–20

free aid, 4free trade mixed with mercantilism,

144Fujian Province, 94funds transferral to international

organizations, 5–6

G-2 (US and China), 74G-8 (Group of 8), 73G-20 (Group of 20), 73Geneva Conference on Indochina, 56global governance, 81global recession

China’s financial help for recovery, 148

China’s worldview changes with, 72–4

minimal effect on China, 100–1, 104, 167

slowdown of Chinese overproduction purchases, 166–7

urban to rural migration due to unemployment, 167

global stability, as Deng’s goal, 63–4global status, search for, 139–48,

143–4globalism

as advantage to China, 20, 44under Deng, 62, 64, 79, 94–5, 122Jiang as advocate, 70, 80Mao against, 132as progressive, 6as Xi’s worldview, 75–6

“going out/going global,” 22, 70, 80, 165

Goldman Sachs on China’s GDP growth, 103

Governance of China, The (Xi), 75–6grant factor, 14grants vs. loans, 3–4Great Leap Forward, 78, 89–90, 105,

116Great Proletarian Cultural Revolution,

61, 78, 89–90, 136green energy, 157

Index ● 273

gross domestic product comparisons, 90–1

Guangdong Province, 94, 100Guidelines for Investments in Overseas

Countries’ Industries (Foreign Commerce and Foreign Affairs Ministries), 80

Hainan Province as SEZ, 100Han Dynasty, 46–7Hanban (Office of Chinese Language

Council), 145hard power vs. soft power. See soft

power vs. hard powerharmonious world concept, 71–2Heaven (t’ ien) as supreme governing

force, 44–5heavyweight industries under

government control, 99high-tech infrastructure, 104historical artifact displays, 146Hong Kong

as Deng’s economic model, 93incorporated into China, 23as investor in China, 22, 94, 107

Hong Kong Monetary Authority Investment Portfolio, 129

horizontal aid, 13Hu Jintao

adoption of Deng’s and Jiang’s policies, 70–1

on beneficial cooperation for common prosperity, 145–6

concern over oil importing, 158critics of foreign policy, 72harmonious world concept, 71–2military for disaster relief and

humanitarian efforts, 154promotion of economic growth,

48–9unemployment nightmares, 165

Hua Guofeng, 61human rights abuses, 61–2humanitarian/charity aid, 7, 17hundred-year marathon, 122

IMF (International Monetary Fund). See International Monetary Fund

imperialismcapitalism as leading to, 54as foreign policy preoccupation

(Mao), 121, 140human rights concerns by West seen

as, 69intermediate zones to counteract,

58–9Mao’s view of foreign commerce, 86rapid economic growth leads to, 121Third World countries as tools of, 77viewed as source of weakness

(Deng), 63Western aid seen as tool of (Mao), 4,

10, 17–18, 142Western imperialism, China’s aid in

opposition, 17–18Westphalian system as, 53

Imperialism (Lenin), 131India

oil supply concerns with, 158–9as security concern, 152, 155war with China, 52

Indonesiaas recipient of China’s aid, 23, 29remittance aid from Hong Kong, 23

inflation problems, 1988, 95inflation risks in domestic economy

investment, 120Information Office of the State

Council, China, white paper on China’s aid policies (2014), 28

information technology industry, 99infrastructure project funding, 159, 167inter-agency coordination mechanism,

liaison for foreign aid, 128intermediate zones (Mao)

China’s courting of, 56financial help for, 77–9non-aligned nations bloc as, 55–7revisionism as third world camp, 58as Third World bloc, 55–7as two separate zones, 58–9

274 ● Index

International Bank for Reconstruction and Development, 13

international bonds as source of capital, 108

International Financial News, The, on Freddie Mac and Fannie Mae investments, 111

international financial system suggested, 73

International Liaison Office of Chinese Communist Party Central Committee, 127

International Monetary Fund (IMF)Asian bailout help, 148China’s national income report,

1995, 96China’s rising percent of global

economy, 101increase developing nations’ input

in, 73relationships established, 107

International Monetary System, 73international organizations, oversight

of foreign aid, 5–6internationalization of Chinese

companies, 22–3intra-company loans/debt

transactions, 8investiture, 50investment and aid monies blurred,

27–8“investments” as renaming foreign

aid, 120iron, steel, and nonferrous metals

industry, 99, 160, 166isolationism, development of, 85–6Italy, tribute in Ch’ing dynasty, 51

JapanChina-Japan confrontation, 158–9investment capital sought from

(Deng), 94loans and grants to China, 19, 97,

107people’s war against (Mao), 150–1

jen (benevolence) as Confucianism tenet, 47

Jiang Zeminaid to Russia after Soviet collapse,

139as Chinese Communist Party head,

67, 95Clinton administration, relationship

with, 52–3, 69Confucian schema and, 48economic development focus, 68as globalism advocate, 70on Soviet Union collapse, 68

Jiaotong Universities, 146

Khrushchev, Nikita, 138Korea

end of tribute system, 51suzerainty with in Mao’s time, 51–2

Korean War, 56, 141–2See also North Korea

labor reforms under Deng, 92land to population ratio as unfavorable,

86Laos, aid from China under Mao, 134Latin America

financial help in 2008 recession, 25–6

as recipient of China’s aid (1953–1964), 30

law of comparative advantage, 161Leading Small Group of Politburo as

directional decision makers, 125legalism vs. ethical rule and moral

government, 46Lenin, Vladimir, 56Leninist dialectic of backwardness, 4Leninist worldview, Mao’s

understanding of, 131li (propriety) as Confucianism tenet, 47Li Keqiang, 35Li Peng, 95, 158liberal doctrine of foreign assistance, 4Lin, Justin, 98–9

Index ● 275

Lin Biao, 59, 142Liu Mingfu, 74Liu Shaoqi, 132–3loans, foreign aid

analysis of, 31–3arms sales vs., 35China Development Bank and, 129concessional loans to China, 19under Deng, 105–8, 118FDIs as, 8vs. grants, 3–4, 13–14investments as, 120from Japan to China, 97preferential and concessional loans to

poor countries, 34–5repayment conditions, 4sought by China, 79sovereign funds/sovereign wealth

funds as, 9from Soviet Union, 115–16Zhu on illegal loans, 163See also Eximbank

Lushun naval base, 114

machinery industry, 99Malacca problem (oil), 158malaria prevention, 147Malaysia, aid from China, 1997, 29Malta as recipient of China’s aid

(1956–1972), 29Manchuria

concessions to Soviets, 114industrial base destroyed by war, 86rehabilitated economy, 114

Mandate of Heaven, 45–6, 50manufacturing growth, 1999–2010,

99–100Mao Zedong

aid, claims of altruism for, 12–13aid, reasons for giving, 112aid policies criticized, 19aid to others in times of famine in

China, 116–17, 134aid to Vietnam, 1949, 38capital accumulation goals, 105

Chinese worldview of Third World nations rising, 142

on communism, 141Communist Bloc’s appeal to, 130–3conceptual pillars abandoned, 20conflict with Soviet worldviews, 44on Confucian teachings, 48denigration of Soviet aid, 114–16economic plan as egalitarian and

Communist goal, 89–90economic ups and downs, 90egalitarianism ideology, 21foreign aid views, 76–7global perspective of, 54–60global status, search for, 140hostage-taking of foreign officials, 55imports of energy and resource needs

under, 155–6industrialized China as failed goal,

83–4, 86–7investment fund sources, 88lack of international trade, 86–7lack of subservience to Soviet

Union, 55on Mandate of Heaven, 48overpopulation problems, 87as philosopher and theorist, 54–5precepts adopted, 57Soviet model of economic

development, 86, 87–8, 132support of wars of national

liberation, 59Three Worlds theory, 60united front view of the world,

59–60US as enemy, 88, 132views changed by Sputnik launch,

57–8wars to restore China’s greatness,

149, 150Maoist idealism, abandonment of, 63market access, 8, 84market Leninism, 144market stealing accusations, 166markets for China’s products, 161–7

276 ● Index

Marshall Plan-like foreign assistance program (2009), 167

Marxism, 4–5, 131mass starvation during Great Leap

Forward, 105Mencius, Mandate of Heaven

expounded on, 45mercantilism, 62, 101, 109merchant marine, 154–5meritocracy, 45, 85, 98metal and nonmetal resource needs,

160Middle East as recipient of China’s aid

(1953–1964), 30military aid from China

aid competition with Soviets, 79decreased under Deng, 153grants vs. arms transfers, 34–5limited information on, 34under Mao, 134Ministry of National Defense

controls, 128not considered foreign aid, 29pros and cons, 6–7Soviet aid to India countered, 152as unannounced, 11, 28See also North Korea; North

Vietnammilitary forces

for disaster relief and humanitarian efforts (Hu), 154

military demobilization (Deng), 163military power growth, 149shifts and improvements in (Deng),

152–3as sign of strong country, 142

Ming Dynasty, 52, 86Ministry of Agriculture, 127Ministry of Commerce, 36, 40–1,

126–7Ministry of Culture, 127Ministry of Education, 127, 145Ministry of Finance, 127, 130Ministry of Foreign Affairs (MOFA),

125–8, 145

Ministry of Foreign Trade and Economic Cooperation, 21, 127–8

Ministry of Health, 127Ministry of National Defense, 128Ministry of Science and Technology,

127Ministry of Transport, 127Mischief Reef island, 159MOFA (Ministry of Foreign Affairs),

125–8, 145Mongolia

end of tribute system, 51as recipient of China’s aid

(1953–1964), 30, 134Monroe Doctrine for Asia, 141morality as governance in China, 43Morgan Stanley investment, 119–20multilateral aid, 6, 24–5multipolarity, 62Muslim population in China, 154

national security, search for, 149–55nationalism

balance with globalization (Deng), 144

Chinese dream as, 49Deng’s ideology as pragmatic

nationalism, 62–3distrust of Soviet Union and, 135promoted by Mao, 140as reason for joining Communist

Bloc, 131world seen as Sino-centered, 66

Nationalist government. See TaiwanNepal

aid data on, 31end of tribute system, 51equal status vs. tribute, 51

New Life Movement, 47–8New Security Concept, 150NGOs (private aid by nongovernmental

groups), 7, 17Nixon Doctrine, 60Nixon visit to China as tribute

mission, 52

Index ● 277

Non-Aligned Movement, 151non-aligned nations bloc, 55–6nongovernmental groups (NGOs)

giving private aid, 7, 17nonideological/anti-ideological

worldview (Deng), 63non-nuclear testing agreement, 143non-tariff barriers to imports, 101non-zero sum system, Asian preference

for, 53North Korea

China’s moderation of radical policies, 147

China’s resentment of aid for, 135military and economic aid, 1950s,

10, 13, 14, 34, 77–9, 134North Vietnam

aid competition with Soviets, 138China’s tribute system and, 52Chinese aid terminated, 20military and economic aid, 1950s,

10, 13–14, 30, 34, 77–9, 134nuclear attack threat, 1958, 135Nuclear Test Ban Treaty, 152nuclear weapons, 34, 58, 63, 142–3,

147

Obama’s visits to China as tribute mission, 53

ODA (overseas development assistance), 1–2, 33

OECD (Organization for Economic Cooperation and Development). See Organization for Economic Cooperation and Development

Offshore Islands (Quemoy and Matsu) crisis, 57–8, 135

oil/petrochemical industry as strategic area, 99

oil war possibility, China and US, 159Olympic Games, Beijing 2008, 73,

146open cities, 100Open Door Policy (Deng), 64Opium War, 51

Organization for Economic Cooperation and Development (OECD), 1, 30, 35–6, 107

Outer MongoliaChina’s aid to, 115independence from China, 114

overpopulation/food problems, 87, 90overproduction and unemployment,

5, 162–4, 166Overseas Chinese, investment capital

sought from (Deng), 94overseas development assistance

(ODA), 1–2, 33Overseas Investment Guidance Catalog

(Foreign Commerce and Foreign Affairs Ministries), 80

overseas military bases, foreign aid to acquire, 153, 155

Pakistanaid to undercut India’s influence, 152as recipient of China’s aid

(1956–1973), 29Sino-Soviet split and, 139

Paris Declaration on Aid Effectiveness, ambiguously signed by China, 40

peaceful rise/peaceful development theory, 70–1

Peng Dehuai, 117People’s Bank of China, 108, 129People’s Daily

on China-Japan confrontation near Chunxiao gas field, 158

on Exim Bank foreign assistance loans, 128–9

People’s Liberation Army, 25, 72, 158people’s money, investment

responsibility for, 119–20people’s war (Mao), 150–1perform or else policy, 92period one. See foreign aid 1950–1979period two. See foreign aid

1980–presentpetroleum consumption and

dependency, 157–8

278 ● Index

PhilippinesMischief Reef island territorial

dispute, 159remittance aid from Hong Kong, 23

policy shifts in China’s aid (period two), 18–19

Politburo of Chinese Communist Party, 124–5

poor countries giving to poor countries, 84

post-1978 economic boom, 91–5power generation as strategic area, 99PPP (purchasing power parity), 103pragmatic nationalism (Deng), 62–3principles of the world four tenets,

69–70private aid by nongovernmental

groups (NGOs), 7, 17private vs. state businesses and

employment, 98privatization campaign under Deng,

92–3projects as foreign aid, 5purchasing power parity (PPP), 103

Qing Empire, 51, 86, 149Qinghua University, 146

raw materials. See energy and resource needs

recessions, weathering, 72–4, 101–2reforms, continuing, 104reinvested earnings, 8religious aspects of ancient political

philosophy, 44–5remittances home from foreign

workers, 7research and development emphasis,

104resident entity, 8revisionism as third world camp, 58revolution in military affairs (RMA),

154RMA (revolution in military affairs),

154

rubber consumption, 160rural to city migration and

unemployment increase, 164–5

sacrifices made by China to give foreign aid, 116–17

SAFE (State Administration of Foreign Exchange) Investment Company, 111, 129

SASAC (State Asset Supervision and Administration Commission), 99

savings levels, 97, 101, 105–6, 162scholars’ and analysts’ differences in aid

reporting, 29–31scholarships as foreign aid, 16, 35, 127,

146SCO (Shanghai Cooperation

Organization), 25, 73sea power, 154–5sea-lane protection, 153–4security interests as foreign aid goal,

124security treaties, 49–50Selected Worlds of Jiang Zemin, The

(Jiang), 67selective multilateralist policy, 81Senkaku or Diaoyu Islands, 159SEZs (special economic zones), 100,

129Shanghai as foreign investment

recipient, 107Shanghai Cooperation Organization

(SCO), 25, 73ship hijacking, 155shipping as strategic area, 99Sian Incident, 48Singapore as Deng’s economic

model, 93Sino-American relations, Thirty Year

Treaty and, 133Sino-centric worldview, 43–4Sino-French War, 51Sinopec, 130Sino-Soviet border war, 59, 60Sino-Soviet relations under Mao, 54–9

Index ● 279

Sino-Soviet split, 134–9Sixteen Point document for economy,

163sixtieth anniversary of China’s foreign

aid giving, 2010, 35small groups in Chinese Communist

Party, 125small-project aid, 14–16socialist market economy (Deng), 162SOEs (State Owned Enterprises). See

State Owned Enterprisessoft power vs. hard power, 121, 145,

150, 159Somalia as recipient of China’s aid

(1956–1973), 29Song Xiaojun, 74South Asia, Sino-Soviet split and, 139South China Sea claimed by China,

147, 158South Korea as Deng’s economic

model, 93Southeast Asia

aid counteracting negative image in, 147

Sino-Soviet split and, 139South-South cooperation, 27sovereign funds/sovereign wealth funds,

9, 111, 129Soviet model of economic development,

86–8Soviet Union

aid competition with China, 78–9, 136–9, 143, 151–2

aid to China, political motives for, 112–16

avoidance of confrontations with, 151–2

collapse, 68as de facto enemy, 136dependency on under Mao, 135formal split with, 1962, 135–6as funding source for China, 88ideological differences with, 135termination of aid to China, 1960,

11, 136–7

Special Economic Zones (SEZs), 100Special Economic Zones in Africa,

129Sputnik satellite launch, 57Sri Lanka as recipient of China’s aid

(1956–1973), 29Stalin, ideological split with Soviets

after death of, 135State Administration of Foreign

Investment (SAFE), 111, 129State Asset Supervision and

Administration Commission (SASAC), 99

State Council, on Deng’s view of foreign aid, 80

State Council (China’s “cabinet”), 125, 126, 163

State Grid, 130State Owned Asset Supervision and

Administration Committee, 130State Owned Enterprises (SOEs)

best were kept and restructured, 98–9, 129–30

economy management with financial institutions, 120–1

under Finance Ministry or State Owned Asset Supervision and Administration Committee, 2003, 130

many phased out under Deng, 92, 163

relationship decline under Mao, 99state secrets, foreign assistance as,

39–40state vs. private businesses and

employment, 98state-controlled capitalism, 144steel production, 160, 166sterilization bonds, 110Strait of Malacca (oil imports), 158strategic areas of government control,

99Sun Tzu, 150superfusion, 74systems theory, 62

280 ● Index

Taipei, US defense treaty with, 57–8Taiwan

Chiang’s relocation to, 56as Deng’s economic model, 93diplomatic influence and status vs.

China, 10–11gold and currency reserves taken, 86investment capital sought from

(Deng), 94isolation as foreign aid goal, 124reunification goals, 64reunification unrealized, 65–6

“Taking the Path of Peaceful Development” (Dai), 74

Tan-Zam Railroad, 14, 20Tanzania as recipient of China’s aid

(1956–1973), 29Taoism, 46tariff-free privileges to nations with

diplomatic relations, 34technical assistance as foreign aid, 7,

15–16, 19–20, 24, 34, 113, 115technology and material incentives in

aid program, 21teh (morality) as Confucianism

tenet, 47telecommunications as strategic

area, 99Tendering Board for Foreign

Assistance Projects (in Ministry of Commerce), 126

Tenth Chinese Communist Party Congress, 60

Thailand, aid from China, 1997, 23Theory of the Differentiation of the

Three Worlds (Mao), 61Third World countries. See developing

countriesThird World wars of national

liberationaid support for, 12, 18, 59, 142, 151end of aid support for, 20, 153

Thirty Year Treaty of Friendship, Alliance and Mutual Assistance, 133

Three Worlds theory, 60–1Tiananmen Square incident, 66–7, 95Tibet, suzerainty with, 52t’ ien ming (heaven’s edict), 45t’ ien-tzu (Son of Heaven), emperor as,

44–5, 47, 50trade sanctions avoided, 96–7transportation-based projects, 121tribute system/tribute diplomacy

advantages of in ancient China, 85destroyed by West, 51as development model, 53–4ethics in government and, 47foreign aid giving and, 76, 112as forerunner of foreign aid, 49–54as ideal vs. reality, 51in Mao’s time, 52morality of governance as

forerunner, 43–4reestablishment of, 53seen as permanent situation, 50–1as soft power, 150

Twelfth Five-Year Plan (2011–2015), 80

UN (United Nations). See United Nations

unemployment. See overproduction and unemployment

united front doctrine (Mao), 58, 59–60

United Nations (UN)aid competition with Soviets and,

139, 152boycott during Korean War, 56China, relations with, 17China’s aid for peacekeeping, 24–5market access, views on, 8oversight of foreign aid, 6

United Nations Children’s Fund, 19United Nations Development Program

(UNDP), 19, 118United Nations Food and Agricultural

Organization, 25United Nations Fund for Population

Activities, grants to China, 19

Index ● 281

United Nations Millennium Development Goals, 71, 146

United Nations peacekeeping efforts, China support for, 154

United Statesalliance with Chiang, 131challenged on terrorism policies, 72China as enemy and threat to world

peace, 141China’s investments in, 119–20financial help to Dengist China, 64,

106loans and grants to China, 19market access as form of aid, 8no protection for Chinese oil

imports, 159public and private aid, 8Sino-US relations under Deng, 94trade deficit with China, 165–6unbalanced trade relationship

dilemma, 110–11undermining influence as foreign aid

goal, 124as unipolar power, 68Vietnam War loss, 60

United States Central Intelligence Agency, China’s aid estimate (1960–1989), 30

United States Department of State, China’s aid estimate to 1965, 30

United States Navy as protector of China’s oil and shipping, 153

United States treasury bond purchases, 166

universities, improvement in rankings, 146

Unocal, attempted purchase, 111urban reforms under Deng, 92Ussuri River border fight, 136

veto power in United Nations Security Council, 118

Vietnam, end of tribute system, 51Vietnam War, 60, 141–2

See also North Vietnam

Wang Huning, 144–5War on Terror, 154wars as last resort to tribute system, 50wars’ effects on economy, 86wars of national liberation

China’s aid terminated for (Deng), 20, 153

support as confrontational to US, 151

support under Mao, 59, 142unannounced aid for, 12

Washington consensus as Western model, 144

water pollution, 157Weltanschauung (worldview) of Mao

Zedong, 54–60Wen Jiabao

debt cancellation announcements, 146

international financial system suggested, 73

peaceful rise/peaceful development theory, 70–1

rural to city migration, 165unemployment concerns, 165, 167

West Asia, foreign non-bond investments in, 36

Western apprehension with China’s rise (Deng), 144

Western countries foreign aid conditions, 5–6, 16

Western definition of aid and investments vs. China’s, 23

Western Hemisphere (non US), foreign non-bond investments in, 36

Western view of China’s aid policies, 81

Westphalian system of sovereign nation-states, 53, 57, 62, 66

White Paper on Foreign Aid (2011), 27–8, 33, 35, 41, 126, 127, 147

white paper on national defense, 1995, 68–9

white papers on China’s aid policies, 27–8

282 ● Index

willpower to become dominant country, 104

Work Report on domestic and foreign policies, 75

World Bankestimates of aid, 32infrastructure project funding, 97Ministry of Finance, cooperation

with, 127relationships established, 107rules changes demanded by

China, 73SOE restructuring, 98–9

world reaction to China’s growth, 100–1World Trade Organization (WTO), 8,

96, 148, 161, 164WTO (World Trade Organization). See

World Trade Organization

xenophobia, 85Xi Jinping, 49, 53, 74–6Xinhua News Agency, 146Xinjiang, concessions to Soviets, 114

Yalta, sellout of China, 1945, 132yin-yang as rule by manipulation, 46

Zambia as recipient of China’s aid (1956–1973), 29

zero-sum system, Western system as, 53

Zhang Yimou, 73Zhao Ziyang, 67, 79–80Zheng Bijian, 71Zhou Enlai

on Australian visit to China, 52criticism of Khrushchev at Soviet

Party Congress, 137“Eight Guidelines on Foreign

Economic and Technological Aid,” 137–8

financial aid pledged to Third World countries, 1964, 78

Five Principles of Peaceful Coexistence, 1954, 56

on international issues, 140–1peaceful coexistence proposed, 151on revolutionary conditions in

Africa, 59sought improvement of relations

with US, 59unrepaid loan to Cuba, 117

Zhu Rongji, 70, 121, 163

About the Author

John F. Copper is the Stanley J. Buckman Distinguished Professor of International Studies emeritus at Rhodes College in Memphis, Tennessee. He is the author of more than 30 books on China, Taiwan, and Asian Affairs. Copper is listed in Who’s Who in America, Who’s Who in the World, Men of Achievement, Contemporary Authors, and The Annual Guide to Public Policy Experts. In 1997, Dr. Copper was recipient of the International Communications Award. He has spent 15 years in Asia. China’s Foreign Aid and Investment Diplomacy, Volumes I–III represent the culmination of Professor Copper’s work on this subject over four decades.