China fact of the day

It is undeniable that China since the late 1950s has deployed hard and soft power in its determination to exert influence over Africa.  In the Mao era this translated into enormous aid budgets.  By 1975, China was throwing ‘more than’ — in Zhou Enlai’s revealingly hazy formulation — 5 per cent of its national budget into foreign aid; in fact, two years earlier it had reached 6.92 per cent.  Compare this proportion with the 0.7 percent of national income that the much wealthier UK annually reserves for international aid..It thus seems certain that Mao-era china spent a greater proportion of income on foreign aid — including in Africa — than did either the US (around 1.5 per cent of the federal budget in 1977) or the USSR (0.9 per cent of GNP in 1976).

That is from Julia Lovell, Maoism: A Global History, so far my favorite book of the year.  One implication of course is that One Belt, One Road isn’t as new as you might think, and that contemporary China has more in common with the Mao era — and I’m not just referring to the censorship element — than many people realize.


Maoism was a political message, while One Belt, One Road is an economic message. That Maoist China spent a greater proportion of its income on foreign aid than the U.S. merely emphasizes just how small that income was. [In the Trump administration's desperation to score a "win" with China, I understand that the administration has dropped its demand that the U.S. have veto power over China's fiscal policy. Declare a "win" and move on.]

Other countries that "punch above their weight" in aid giving are the Scandinavian countries, see list here, . I used to think they were just trying to be nice, until I realized that being an international arbiter is "big business", especially in legal matters, so perhaps they are trying to look and act neutral to attract this business, in the same way Switzerland tries to act neutral to attract foreign banking money.

Bonus trivia: an international arbiter, not of chess, but of international disputes in Southeast Asia, is a Greek, name escapes me, but I have his autobiography that I intend to read. He started out as a journalist, a common profession for international do-gooders, as can be seen these days on CNN.

China is a threat to all nations. But I would put Taiwan and Australia/NZ at the top of the list.

Yo, how can you say that? Italy just voluntarily joined OBOR. Like, that's a big deal.

This makes the same point Oresident Captain Bolsonaro has been making: Red China does not want to buy from countries, it wants to buy countries.

@TR - amigo, why is it Brazil is last place in the world in giving aid as a percent of GNI (similar to GDP, GNP)? Is it because of the numerator, that they are stingy (only Chile is less generous) or the denominator, in that GNI is so large that even if you give a lot of aid money the percentage is small? See the list above at rayward's post.

Brazil helps many countries. Brazil is helping Venezuela, helped Haiti, helped Timor Leste. Brazilian soldiers in Italy in the 1940s used to give their food to the impoverished populace

'is that One Belt, One Road isn’t as new as you might think'

And to think that some people call it the New Silk Road, if only because they are aware of history. 'The Silk Road conjures images of desert caravans crossing the Great Steppe and adventurers like Marco Polo navigating ancient trading routes connecting China with Europe and Africa. China’s modern-day adaptation, known as the Belt and Road Initiative, aims to revive and extend those routes via networks of upgraded or new railways, ports, pipelines, power grids and highways.'

Almost as if the Chinese are taking an even broader view of the world than they did 2000 years ago.

The silk road was not anything related to government policy: it emerged as the growing economy of the Roman Empire increased the demand for exotic commodities like silk, which had to be imported all the way from China (and the Romans never figured out that silk was made by insects, they thought it came from a plant).

With the fall of Rome, demand for exotic products decreased but the existing network survived.

What is so special about China that they could have a monopoly on silk? It's not like spices that require a certain climate to grow; caterpillars would be happy in many temperate climates. You'd think some enterprising Chinese trader would sell a few of the bugs at a high price. So I looked it up and was surprised to discover that that is pretty much what happened. The Arabs and Byzantines had silk industries as early as the Dark Ages and the Western Europeans, in particular Italian city states and France, developed silk industries of their own after the Crusaders sacked cities in Byzantium and stole a few worms of their own. Never knew!

"Smuggling of silkworm eggs into the Byzantine Empire"

There is a move I cannot remember the title on the smuggling into France. The smuggler could not get into China but managed to get some from the Japanese underworld and got tangled into the Japanese civil war.

Thanks for the link. That's awesome.

This seems pretty close to the correct distinction; the 'old' Silk Road didn't exist at all as a national, imperial project and to the extent there was infrastructure it was local and for local immediate profit of a patchwork of local powers, while the 'new' Silk Road is a project for and by the People's Republic of China. There's not much in common at all.

(At this point, MR's libertarians will no doubt chime in on how this is free market economic project, because it ultimately extends the reach and size of markets, despite being an obvious project of national state for political ends, enriching a bunch of state contracted and owned business to build and continuously maintain. Because that's what they seem to do these days, and perhaps they will also justify "development aid" - cash transfers between states fueled by tax and debt - on the same grounds.).

prior approval, to call it the "New Silk Road" alone minimizes, the "Belt" in the formulation for the "Road... and it happens to be the case that "Belt" describes China's open ambitions to create a "Belt" of national economies, not just trade.

' the 'old' Silk Road didn't exist at all as a national, imperial project'

See below.

'to call it the "New Silk Road" alone '

Oddly, the current end terminus of the New Silk Road in Duisberg has been using that term for quite a while - it is true that China has larger ambitions, of course.

''The silk road was not anything related to government policy:'

Au contraire - 'The Silk Road derives its name from the lucrative trade in silk carried out along its length, beginning in the Han dynasty (207 BCE–220 CE). The Han dynasty expanded the Central Asian section of the trade routes around 114 BCE through the missions and explorations of the Chinese imperial envoy Zhang Qian.[4] The Chinese took great interest in the safety of their trade products and extended the Great Wall of China to ensure the protection of the trade route.'

Here is some more detail - 'With the Mediterranean linked to the Fergana Valley, the next step was to open a route across the Tarim Basin and the Hexi Corridor to China Proper. This extension came around 130 BCE, with the embassies of the Han dynasty to Central Asia following the reports of the ambassador Zhang Qian (who was originally sent to obtain an alliance with the Yuezhi against the Xiongnu). Zhang Qian visited directly the kingdom of Dayuan in Ferghana, the territories of the Yuezhi in Transoxiana, the Bactrian country of Daxia with its remnants of Greco-Bactrian rule, and Kangju. He also made reports on neighbouring countries that he did not visit, such as Anxi (Parthia), Tiaozhi (Mesopotamia), Shendu (Indian subcontinent) and the Wusun. Zhang Qian's report suggested the economic reason for Chinese expansion and wall-building westward, and trailblazed the silk road, which is one of the most famous trade routes. After the defeat of the Xiongnu, however, Chinese armies established themselves in Central Asia, initiating the Silk Route as a major avenue of international trade.'

Han dynasty China was involved in the parts of the route in Central Asian areas they temporarily held under this dynasty.... As one of a set of polities. That's far from the entire thing being a Chinese imperial project!

'was involved in the parts of the route in Central Asian areas they temporarily held under this dynasty'

For a couple of centuries, and involving the Great Wall.

Still a step up from 'it was local and for local immediate profit of a patchwork of local powers.' Which is also accurate, but after the fall of the dynasty that had a policy of extending and protecting the Silk Road.

A totalitarian government has no problem spending money on ambitious products. Citizens that complain to vociferously just get sent to the camps.

You can go a lot farther back than Mao.

I believe that before Maoist China, there were other countries that expended a great deal of resources to not just influence parts of Africa, but to directly own and operate resource extraction sites and port in Africa. How did that end up going for them?

Without knowing the size of China's "national budget" in 1975, that figure is hard to interpret. And it is a bit misleading to compare it to a British figure that is a percentage of GDP. How much was China giving as a share of its GDP? I doubt that China's foreign aid budget under Mao was large enough for China to have a major impact, as China was extremely poor. I'd guess that aid was on the order of 1% of a very small GDP.

Today is different, China's foreign aid is sizable and may indeed give it some influence.

How much foreign aid is China receiving in this period?

So why isn't Trump proposing to counter this dangerous influence by massively increasing our own aid budget?
Or is aid only a scary and dangerous means of exerting soft power when other countries do it? (When America does it, it's a waste of money).

Why would he? We wants to interfere less with the world. It is a waste of money (charity aside), but why do we care if China wastes their money?

If he wants to interfere less in the world why is he (supposedly) using trade policy to contain China's geopolitical power?

One Belt, One Road is not a free ride: China makes "loans" to the countries on the Road, not gifts. Thus, the countries are connected to China's transportation/production network and indebted to their benefactor. China does capitalism better than America! Meanwhile, America is fighting with its neighbors and allies, cutting both financial ties and military and political ties.

You keep using this word "capitalism". I do not think this word means what you think it means.

Clearly it’s synonymous with bullying and coercion, for him.

The AIIB VP for strategy is a German banker, part of the "4 doc knight" senior management of AIIB. The British knight is in charge of corporate governance.

The host country decides on how the project is financed. Sri Langka wanted 100% ownership but they defaulted. Laos is safer and decided on 30% ownership and collecting the transit fees.

Should it be "mercantilism"?

Incentives, my friends.

As the largest developing country, China has always aspired to be the champion of the third world. Ultimately, though, this aid and investment should be judged not on intentions but on consequences. I would like to see more studies about what impact Chinese aid and investment has on poor recipient countries, as compared to aid from Western governments and investment from Western companies. On a broad basis, Chinese aid seems quite positive; sub-Saharan Africa has had much better growth after 2000 than before, and the countries most closely associated with Chinese investment like Ethiopia have had the fastest growth. I also suspect that Chinese investment today has much more positive consequences than investment during the Mao era, as China itself has a lot more experience about how to achieve economic development and is thus able to make better investment decisions.

Japan has been putting China to shame in Africa, though that might be an unfair comparison, since Tokyo is protected under the US military umbrella...

This is true, the last time I was in Africa, I saw many roads that had signs saying they were contributed by Japan. China was the second most common, but it was definitely less common than Japan.

Japan is an excellent example of how countries can atone for their imperial pasts and become positive members of the global community with adequate amounts of shame. Other great powers should follow its example.

"China has always aspired to be the champion of the third world."

I'm not convinced the people of Tibet or Mongolia are in agreement.

The people of Vietnam, the Philippines, Jammu and Kashmir and the Tarim Basin might not be so hot on it either.

What do you mean? Out of all of those places, Tibet is the only one where China is active in a major way. And there’s been a good amount of development in Tibet, with high-speed rail, Tibetans getting affirmative action in Chinese universities, and incentives for intermarriage and integration. The human rights situation is not what I would like it to be, but given the choice between living in Tibet or a neighboring country like Nepal, I’d choose Tibet for sure.

And Mongolia was actually freed by Communist China. Mongolia was part of the Qing Dynasty in 1911 and broken off by the Soviet Union during the Warlord Era. According to the Nationalist China government in Taiwan, Mongolia’s secession was illegal and it is still part of the Republic of China as successor to the Qing. But Communist China recognized Mongolia’s independence and gave up China’s claims to Mongolia.

As per the Economist's critique - it is difficult to sustain the argument that Xi is pursuing a revolutionary ethos. Mao self-consciously sought to build a transnational bond with communist revolutionaries the world over - succeeding in as far afield as Bolivia and Albania. Modern China is extremely robust on national sovereignty and on non-interference in national jurisdictions. Xi may pay lip service to revolution - but politically, it is a revolution in one country. Economically - it may be that China is learning from General Marshall more than Mao

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