The Chinese South-South development cooperation: an assessment of its structural transformation

Abstract

This paper aims to analyze the Chinese cooperation with developing countries, its purposes, shapes and intentions in order to explore the peculiar characteristics of Chinese SSC. This work seeks to analyze whether the cooperation carried out by China with countries of the Global South fits the principles of South-South cooperation and if and how China is modifying the international aid regime.

South-South Cooperation; Chinese cooperation; China; Global South

Introduction

Mainstream International Relations (IR) deepens the discussion of international cooperation from the studies of Keohane and Nye (1989), who saw cooperation as a solution to the conflicts that arose from complex interdependence between states. Keohane points out that the actors coordinate their behavior in order to achieve their goals and get away from a ‘zero-sum game,’ according to which one’s benefits means loss to another (Keohane 1984).

Mainstream realist perspectives understand international cooperation actions as governmental actions made on the behalf of national interests and not because of benevolence (Kennan 1971). For Kennan, the purpose of cooperation is determined by the analysis of the most likely economic results and costs of resource allocation (Kennan 1971). In that sense, Morgenthau (1962) argues that the success of international cooperation activities is linked to the recognition of its objectives and its role in foreign policy. Thus, international cooperation should be planned in light of its effects, considering the type of action that is being implemented and the objectives of the foreign policy in line with which it operates (Morgenthau 1962).

Likewise, concerns about cooperation were the main focus of liberal ‘institutionalist’ scholars (Keohane 1984; Keohane and Nye 1989). In their view, cooperation was understood as a situation not necessarily opposed to conflict, but deriving from complex interdependence and needing high levels of political coordination (Keohane 1984). Due to international cooperation actions, especially those focused on international development, we may identify two basic forms of understanding cooperation: cooperation as aid and cooperation as partnership (Souza 2014; Morvaridi and Hughes 2018).

The understanding of cooperation as aid is typical of the cooperation offered by the developed countries, the North-South Cooperation (NSC) by the OECD criteria. NSC finances many different modalities of international development cooperation, also known as Official Development Assistance (ODA) (Hirst and Antonini 2009; Milani 2014; Lemus Delgado 2018). This comprehension of cooperation as a form of aid is based on the understanding that developing countries, the recipients, do not have the capacity to achieve their full development on their own and, therefore, they need to be helped to reach their full potential.

On the other hand, the rhetoric of cooperation as partnership is typical of the cooperation fulfilled between developing countries or South-South Cooperation (SSC), in which there is the assumption of horizontality in exchanges of experiences between countries with similar levels of development and that the relationship between these countries tends to be horizontal (Pino 2014).

In studies about International Development Cooperation (IDC), it is observed a rising interest in studies of SSC (Gray and Gills 2015; Westhuizen and Milani 2019), and the new emerging powers as a new “emerging donors” (Woods 2008; Mawdsley 2012; Manning 2006; Quadir 2013; Rowlands 2013). In fact, IDC is based on the increased number of initiatives executed by developing countries, which is in turn explained by the perception of the differential impact of their practices focused on the consolidation of international development (Mawdsley 2012). In this realm, The People’s Republic of China (PRC) is an actor with ambivalent position, because while Chinese representatives also include themselves in the “South,” when they speak to aid beneficiaries, they also want to be considered as equals to “Northern” countries (Bergamaschi and Durán 2017).

As Shaw et al. (2017) pointed out “[...] the new century is affected by the changing economic stance of the emerging powers and their growing influence on both the world economy and the global institutional architecture” (Shaw et al. 2007, 1260). One of the aspects of these transformations involves changes in the practices and procedures to provide assistance to developing countries. In that sense, a question arises: what is the role of China in face of those changes in the practices and procedures to provide assistance to developing countries? As noted above, despite its huge growth in last decades, China still faces many developing country’s domestic problems (Leite 2018; Lima 2019) and challenges that insert it on the “Global South countries group.” PRC official discourse also considers itself as a developing country what, supposedly, makes it an actor of a process of SSC (People’s Republic of China 2014).

Based on a conceptual approach derived from International Political Economy (IPE), this article addresses the current transformations of SSC and the role of China in this process. The main question of the paper is what kind of SSC China is driving, promoting and expanding through its ambitious investments’ projects, loans commercial initiatives and assistance. This paper aims to analyze and discuss the literature that argues in favor of a particular Chinese SSC “model” and to explore the peculiar characteristics of China’s relations with developing countries.

The article argues that in the contemporary crisis of SSC, whether it is an “identitarian crisis” (Lo Brutto 2017; Domínguez Martín 2017; 2011; Lo Brutto and González Gutiérrez 2016) or an “existential crisis” (Gore 2013; Esteves and Assunção 2014), we are witnessing a global transformation of the current international cooperation regime through China’s Global expansion, leveraged by its economic strength. The approach and strength of Chinese SSC is gaining prominence to the extent that it is seen as competing with the OECD model of cooperation and aid, and perceived as a more attractive option for Global South countries.

Therefore, our hypothesis is that the Chinese SSC takes up the postulates of the Bandung Conference and the eight principles of Zhou Enlai, adapting them to present times, when China is a central country in the capitalist world system. In this scenario, the relational network power between China and the Global South (Vadell et al. 2014) in a triad economic field (trade, investments, assistance) is consolidating a new kind of “consensus.”

According to Domínguez Martín (2017), South-South Cooperation is an essential part of China’s identity, because China made fundamental contributions in this realm. The origins of this path were the five principles of peaceful coexistence, that Zhou Enlai integrated into the so-called “spirit of Bandung,” and that today continue to be the pillars of the Chinese cooperation doctrine. Therefore, the new Bandung spirit addresses the question of what the South can do for itself through South-South cooperation and how this can influence the shaping of the world order in the future through collective action (Domínguez Martín et al. 2019).

This process led by China is structurally modifying the international SSC regime, challenging existing ideational consensus surrounding the economic practices of global neoliberalism. The article’s first section presents a theoretical perspective on emerging donors as new actors on the world system. In the second section, we analyze the new role of the SSC vis-à-vis the traditional Western cooperation system. The third section addresses the SSC evolution through time and the fourth section addresses the aid effectiveness and offers an analysis of the Chinese proposal of “Structural Transformation” (Lin and Wang 2017b; 2017a) for the Global South in order to understand the broader development approach and the changes at the level of principles, norms and procedures possibly recreating a new consensual network power.

From emerging countries to emerging donors

The first theoretical debates regarding middle and emerging powers started to arise by the mid-20 ^th century (Giaccaglia 2014). They began in the Canadian academy (Huelsz 2009; Cooper and Higgott 1990; Cooper et al. 1993) and they were further developed in the late 1990s and mainly during the 21 ^st century. A shared feature of the new millennium debate is the distinction between traditional middle powers and emerging powers (Nolte 2007; Huelsz 2009). The latter are typically big states with vast territories and large populations which, despite being considered developing countries, show a surprisingly high economic growth and potential.

Therefore, we must highlight Lima’s (2013) and Cooper, Higgott, and Nossal’s (1993) behavioral approach. For Lima (2013, 53-60), a middle power is qualified by the multifaceted nature of its behavior in the international sphere, combining unilateral strategies of free rider, regional preeminence and leadership. Beyond those behavioral characteristics, the issue of “temporal frame” frequently appears in this literature (Cooper 1997; Jordaan 2003; Nolte 2007; Huelsz 2009). The difference between emerging middle powers and the traditional ones is crucial according to the behavioral approach, as well as the period of their emergence in contemporary capitalism. Accordingly, Huelsz (2009) identifies five characteristics of contemporary emerging middle powers.

1. Emerging powers have a strong international identity, which is based on a clear view of world order and an understanding of the country’s actual and potential position within this order. 2. Emerging powers are those countries that are traditionally situated in different structural contexts to the industrialised economies, but whose material capabilities have developed on terms which have allowed a degree of influence in the global economy. 3. The behaviour of emerging powers tends to be influenced by a different global agenda to that of the traditional middle powers, which means that emerging powers do not necessarily emphasise the involvement in issue areas that require a sense of ethically or morally infused responsibility towards the international community. 4. Emerging powers are those states whose strategies have a ‘reforming’ character. 5. Emerging powers are also regional powers (Huelsz 2009, 15-16).

In the area of international cooperation, emerging powers continue to receive traditional development aid, although they have now also behave as “emerging donors.” The characteristic that distinguished emerging donors from the traditional donors is their extensive experience as recipients. It helps them to behave with more sensitiveness to the needs and perceptions of less favored countries. The pioneer country in this trend as a “emerging donor” or “new donor” is China, that since the beginning of the 21st century has expanded cooperative relations with Africa, Latin America and the Caribbean (Mathies and Stolte 2016, 159).

The Chinese initiative highlights that “the multilateral aid system created by established donors looks increasingly dysfunctional” (Woods 2008, 1218), fragmented and duplicative. Dialoguing with an opposing perspective, Mawdsley (2019) argues that China was most prominent and attracted early attention, followed by others – although the geography of South-South partnerships is highly varied: China is not always and everywhere the most prominent player.

Problem recognition

The OECD DAC is overseeing the process of negotiation and consultation and has produced indicators and benchmarks that allow advancements to be monitored at both international and country level. These problems were tackled by the High-Level forums on Aid effectiveness. Woods (2008, 1218) pointed out the gap between the talk about greater coordination among donors on the one hand and “actual donor practice,” on the other.

The paradox about coordination is that established donors have created so many institutions to enable better coordination among themselves, and yet have simultaneously sidelined them. The World Bank is the center of an international development assistance regime that is notoriously cluttered with a large number of supposedly multilateral donors tripping over each other’s bilateral efforts […] Perversely, the major donors who created the World Bank do not rely upon it. Instead, they sustain and expand their own separate aid agencies and processes, creating a cacophony of donors making different demands on overstretched aid-needy governments (Woods 2008, 1219).

The Fourth High Level Forum (HLF-4) on Aid effectiveness took place in Busan, South Korea, in 2011, with the aim of establishing a date for the elimination of linked aid, at the same time it promoted efforts at the global level and in each country to increase the effectiveness of aid as a tool to reduce poverty and achieve the Millennium Development Goals (MDG). However, the forum focused mainly on economic growth to achieve its objectives and this resulted in the “technification” of the aid. This process fit within the neoliberal adjustment recipe in order to deal with the effects of the global economic and financial crisis (Blyth 2013).

Neoliberal practices could be summarized as a new form of commodification, privatization, and financialization in a process of expansion and deepening of capitalist relations (Overbeek 2016) that have been developing since the 1980s (Duménil and Lévy 2014).

In that context, China would have been forging its own form of collaboration between Global South countries, giving new life to the SSC, which, to some extent, had been weakened by the logic of the Buenos Aires Plan of Action – BAPA, as a complement to the North-South cooperation (Domínguez Martín et al. 2019; Domínguez Martín 2016). By assuming the existence or the establishment of a trade or investment relationship, China induces the cooperation mechanism differently: by distorting the meaning constructed by BAPA.

Therefore, the presence of China in the new dynamics of SSC in the 21st century represents the impact of emerging powers on global development patterns that challenge existing neoliberal practices (Lo Brutto and Crivelli Minutti 2019, 208-209). That process has opened a debate about the global rise of China as a possible alternative to the neoliberal world order and whether is represents an opportunity for the Global South.

South-South Cooperation in the mirror of the West

China’s power status vis-à-vis the US/West is complex. At the same time China is a developed country in many areas, it is a developing country in many other. However, regarding China’s relationships with the Global South, and seen from the world system and IPE perspectives, China is a central power in terms of trade and investment (Zhang 2016). The situation is mostly clear in East and Southeast Asia, in Africa and in Latin America and Caribbean (LAC) countries.

There is a broad academic consensus that the global aid regime is in a process of transformation. Some scholars have highlighted the important role of “emerging donors” and the non-DAC (Development Assistance Committee) donors as the main actors of this process (Mawdsley 2012; Manning 2006). Some scholars identify a declining effectiveness of the traditional Western donors to facilitate the development of the Global South. As Lin and Wang pointed out, “the Organization of Economic Cooperation and Development’s (OECD) definition of ODA does not even include some of the more effective instruments for facilitating structural transformation in recipient countries, such as equity investment and large non-concessional loans for infrastructure” (Lin and Wang 2017a). Other analysts have interpreted the fracturing systemic process of OECD/DAC regime as a “silent revolution in development assistance” (Woods 2008), others as a situation of “existential crisis” of institutional aid architecture (Gore 2013) and others as an “identitarian crisis” (Domínguez Martín 2016; 2011; Lo Brutto and González Gutiérrez 2016; Lo Brutto 2017).

In light of these transformational scenario, Esteves and Assunção (2014) stated that the “Southern coalition saw the focus on ODA as reproducing the asymmetries into political hierarchy” (Esteves and Assunção 2014, 1779). Nonetheless, the contrary is a real dilemma. The preexisting political hierarchy is the premise to understand the reproduction of the asymmetries and the transformation attempts of ODA.

The South-South Cooperation (SSC) has emerged in a moment in which the countries of the Global South were looking for new ways of positioning themselves into the bipolar international system so as to ensure respect for national sovereignty and national independence vis-à-vis the great powers (Asia-Africa Speak from Bandung 1955). As a constantly evolving concept, South-South Cooperation dates back to the economic cooperation for the collective auto-determination: the proposals of “Bandung principles” contemplated in New International Economic Order (NIEO) of United Nations Conference on Trade and Development (UNCTAD).

The concept became restricted and reductionist with the Action Plan of Buenos Aires, in 1978, consolidating the vision of Technical Cooperation among Developing Countries (TCDC) (Domínguez Martín 2016, 57). As Domínguez Martín (2016, 57) stated, a kind of domestication of SSC complementing the existing NSC took place then. Although each country from the Global South has its own definition of South-South Cooperation, there is a convergence of expectations regarding the main principles of this type of cooperation and such principles can be perceived in South-South Cooperation events over the years (Minillo and Adad 2015).

Throughout its history, South-South Cooperation has been recognized as an expression of solidarity between developing countries since the Second World War in various global and regional political events and processes that have been projected to the present day, generating convergence of expectations around shared principles and motivations. When we analyze the events that intensified the practices of SSC, we can divide them into four periods according to the focus of cooperation in each period (Minillo and Adad 2015).

In the first period, from the end of Second World War until the Buenos Aires Conference (1945-1978), the principles of the strategic relations between the Southern countries were established. Since the Bandung Conference, 46 events can be identified, in which it can observe the political articulations of the Global South countries, in a stage of the process of decolonization (Lopez Cabana 2014). This phase consolidated the political cooperation of South-South countries, giving more prominence to southern countries and reducing the imbalances of the international system (Pino 2015).

The final statement of the Asian-African conference of Bandung in 1955 asserted the principles that the States agreed to cooperate on and that have been followed in South-South cooperation from its beginnings to the present day:

1. Respect for fundamental human rights and for the purposes and principles of the Charter of the United Nations; 2. Respect for the sovereignty and territorial integrity of all nations; 3. Recognition of the equality of all races and of the equality of all nations large and small; 4. Abstention from intervention or interference in the internal affairs of another country; 5. Respect for the right of each nation to defend itself singly or collectively, in conformity with the Charter of the United Nations; 6. (a) Abstention from the use of arrangements of collective defence to serve the particular interests of any of the big powers; (b) Abstention by any country from exerting pressures on other countries; 7. Refraining from acts or threats of aggression or the use of force against the territorial integrity or political independence of any country; 8. Settlement of all international disputes by peaceful means, such as negotiation, conciliation, arbitration or judicial settlement as well as other peaceful means of the parties’ own choice, in conformity with the Charter of the United Nations; 9. Promotion of mutual interests and co-operation; 10. Respect for justice and international obligations (Asia-Africa Speak from Bandung 1955, 9).

In the 1960s, the Chinese government adhered to the “Bandung spirit” enunciating the “Eight Principles for Economic Aid and Technical Assistance to Other Countries.” In Ghana, in 1964, premier Zhou Enlai announced:

1. The Chinese government always bases itself on the principle of equality and mutual benefit in providing aid to other countries. It never regards such aid as a kind of unilateral alms but as something mutual. 2. In providing aid to other countries, the Chinese government strictly respects the sovereignty of recipient countries, and never attaches any conditions or asks for any privileges. 3. China provides economic aid in the form of interest-free or low-interest loans, and extends the time limit for the repayment when necessary so as to lighten the burden on recipient countries as far as possible. 4. In providing aid to other countries, the purpose of the Chinese government is not to make recipient countries dependent on China but to help them embark step by step on the road of self-reliance and independent economic development. 5. The Chinese government does its best to help recipient countries complete projects which require less investment but yield quicker results, so that the latter may increase their income and accumulate capital. 6. The Chinese government provides the best-quality equipment and materials manufactured by China at international market prices. If the equipment and materials provided by the Chinese government are not up to the agreed specifications and quality, the Chinese government undertakes to replace them or refund the payment. 7. In giving any particular technical assistance, the Chinese government will see to it that the personnel of the recipient country fully master the technology. 8. The experts dispatched by China to help in construction in recipient countries will have the same standard of living as the experts of the recipient country. The Chinese experts are not allowed to make any special demands or enjoy any special amenities (People’s Republic of China 2011).

According to Jiang (2011) the “Eight Principles” are still in effect today, but some of them are criticized by the West, especially the principle of “no political conditions attached.” This principle collides with the strong conditions of World Bank and the International Monetary Fund in order to improve governance and macroeconomic reform of developing countries.

The second period begins after the launching of the BAPA. More precisely, from the Buenos Aires Conference to the United Nations “Millennium Declaration” during the conclusion of the Millennium Summit on 8 September 2000 in New York. During its 32 ^nd Session, the United Nations General Assembly debated the principles of Technical Cooperation (TCDC), and Economic Cooperation among Developing Countries (ECDC). After the Buenos Aires Conference, 138 countries adopted the BAPA, where for the first time the expression “horizontal cooperation” was employed as a trademark of SSC, contrasting but not opposing “vertical” NSC (United Nations Office for South South Cooperation 1978).

Nevertheless, we should point out the process of conceptual restriction of the SSC concept. In this period, we see a contradiction between a new stage of a narrow agenda of SSC initiatives among developing countries and an economic debt crisis of the 1980’s which resulted in the “lost decade” in Latin America and the Caribbean, started by the Mexican moratorium in the beginning of the decade (Lopez Cabana 2014, Bandeira 2002), subsequently spreading throughout the region.

The BAPA has laid the foundations for the concept of SSC ¹ in Latin America, with the main objectives of strengthening economic, social and political interdependence; to accelerate development; and to correct the distortions in the international system caused by the asymmetrical power relations of the colonial era. Pino (2012), highlights the importance of the solidarity bonds that cooperation implies. Other analysts (Lechini and Morasso 2015; Esteves and Assunção 2014) stated that BAPA rescued the principles of Bandung Conference by promoting development among developing countries. In light of this approach, Esteves and Assunção (2014, 1780) pointed out: “[…]it is possible to recognise the emergence of SSC as both a set of practice for promoting development among developing countries, and as strategy for advance in a revisionist effort through the claim for reform of international system.” In fact, BAPA declaration explicitly stresses that: “TCDC is neither an end in itself nor a substitute for technical cooperation with developed countries […] TCDC can serve the purpose of increasing the capacity of developing countries to adapt and absorb appropriate inputs from developed countries” (United Nations Office for South South Cooperation 1978, 6-7).

We understand that BAPA restricted the Bandung principles of SSC to the objectives of TCDC, trying to promote the self-sufficiency of developing countries by: a) strengthening their creative capacity to find solutions to their development problems in line with their own aspirations, values and special needs; b) promoting and strengthening of collective self-reliance among developing countries through the exchange of experience and the use of their technical resources; c) developing their complementary capacities; d) increasing the quantity and quality of international cooperation; e) as well by improving the effectiveness of resources for global technical cooperation through sharing capabilities. In relation to those initiatives, SSC has suffered from a series of obstacles since its early days. Its manifestations often involved a limited number of countries, governments with heterogeneous interests and weak economies with limited complementarities which limited the political and economic potential of change of SSC (Renzio and Seifert 2014).

Notwithstanding these statements, the Washington Consensus (Williamson 1990) and the imposition of neoliberal agenda in developing countries strengthened the attachment of aid and loans to political conditions in order to facilitate privatization, adjustment, and deregulation economic policies.

The third phase, as Li Ronglin stated, began in the 2000s:

Entering into the 21st century, with increasing deepening of economic globalization and steady development of new emerging economies, there are new opportunities for SSC. On one hand, globalization embraces more and more developing countries into global manufacturing network, and multilateral and regional integration result in more open market for trade and investment. Developing countries, in this context, could benefit more from their comparative advantages in stimulating economic development. On the other hand, new emerging countries provide more opportunities for economic growth of the world and the South; meanwhile, their growing international contributions could also upgrade infrastructure, human capital and technical level for other developing countries. For those reasons, many developing countries and underdeveloped countries take higher expectation for South-South cooperation (Li 2014, 4).

Since the 2000s, SSC has been recognized and promoted in the international development cooperation system (IDCS) as complementary to North-South Cooperation and there was a significant increase in the number of important events for SSC. At this point, there was a global convergence towards the development goals set by the Millennium Development Goals (MDGs) agenda, which are mostly focused on promoting the development of the Global South countries (Lopez Cabana 2014), with the goal number 8 being particularly relevant to SSC, as it highlights the needs of the least favored countries and proposes a widespread effort to promote development (UN 2011).

The fourth phase began in 2009 and was marked by the institutional propagation and increased demand for SSC after the 2008 crisis called into question the consensus around the principles and rules of governance of economic Western-driven order and the consequent “aid policy” managed by OECD. According to Li,

[…] since 2008 the devastating effects of the global financial crisis and the stalemate of the “Doha Round” negotiation, the US-based institutions - the World Bank, the IMF and the WTO - have been criticized and questioned about their discourse authority, governance capability and institutional legitimacy. More broadly, the existing world order, with these economic institutions as their supporting pillars, is experiencing crises in four comprehensive dimensions: functionality, scope, legitimacy and authority (Li 2016, 12)

Up to 2013, 115 major SSC events took place, consolidating the SSC space in the international scenario, as well as expanding the demand for a dialogue forum to detect complementarities, to form partnerships highlighting the urgency for information and improvement of the records of information about the SSC (Lopez Cabana 2014). This quick example of the metamorphosis of SSC calls into question the effectiveness of assistance to developing countries and between developing countries.

It is important to mention that currently the discussion falls on the Sustainable Development Goals (SDG), which assigns a relevant role to cooperation between Global South countries. The discussion about aid effectiveness has been, according to Lin and Wang (2017a), “one of the most complex and contentious issues in development economics in recent years, and the debate has heated up more recently” (Lin and Wang 2017b, 54). The current argument is that the traditional aid – based on the OECD principles – is ineffective to promote development and structural transformations. This is due to the fact that traditional cooperation (NSC) generates dependence and a certain level of “need to retribution” of the aid they receive, and this can lead to corruption, overvaluation and also jeopardize the full development of the receiving countries by perpetuating the dependence relationship (Kothari and Minogue 2002; Lin and Wang 2017b; Riddell 2008).

China began its foreign aid in 1950 and became a “multi-form and mutually-beneficial cooperation” (People’s Republic of China 2011, 2) in the late 1970’s. China’s foreign aid policy has evolved through time to fit the changes in the Chinese foreign policy, but always following the Eight Principles for Economic Aid and Technical Assistance to Other Countries settled by the Chinese Prime Minister Zhou Enlai in the 1964.

In that sense, Chinese cooperation aims to “support other developing countries to reduce poverty and improve the livelihood of their peoples” (People’s Republic of China 2014, 1). In addition, it intends to be effective by helping “other developing countries in infrastructure construction, and assisted their efforts in strengthening capacity building and trade development” (People’s Republic of China 2014, 1), so the countries helped would improve themselves until they can be self-sufficient.

The concluding remarks of this section aim to stress the slow but steady trend toward fundamental changes in the principles and procedures of implementing SSC, recovering the first phase, the “Bandung spirit,” and fusing it with the “structural transformation” approach. China is playing the leading role in this process toward a new framework. It is not the structure constituted in the essence of Bandung, nor the model of developed countries, but a Chinese way of conducting SSC.

Contemporary Chinese Cooperation

The first report of the Study Center of South-South Cooperation at Nankai University edited by Li Ronglin was published in 2014. That report highlights the triadic dimension of South-South Cooperation of China with developing nations: the international trade, investment, and foreign assistance. Those three “focal parts” constitute a broader scope of SSC taking into account the social, cultural and political relations. Although Ronglin presents a broad definition of CSS as “South-South cooperation refers to the cooperation among developing countries” (Li 2014, 1), he recognizes the evolutionary concept of SSC.

China (2014), in its South-South Cooperation Development Report, defines SSC only as cooperation among developing countries, without making any mention to its basic guiding principles in its definition, and understands it, especially the technical kind, as complementary with the North-South cooperation initiatives (Li 2014). However, Li Ronglin (2014) points out that the development of South-South Cooperation, which began in the 1950s and 1960s – with the Bandung Conference and Non-Aligned movement – evolved with the advent of globalization and the strengthening of regional integration initiatives in the Global South (Li 2013), but also with China’s prominent role in the international arena.

In fact, PRC recognizes “external aid” as a component of the category “development cooperation,” divided in: 1) foreign aid (similar to OCDE assistance) and 2) official support for economic development cooperation, interconnected with trade and investments agendas (Mawdsley 2012, 81-82). A prominent attribute of China’s South-South cooperation is the emphasis on Public-Private Partnerships (PPPs), which are defined as one of the most inclusive forms of cooperation by allowing market-based approaches and filling the gaps in funds and techniques that public resources cannot afford (Li 2013).

In that sense, the Chinese SSC works in the terms defined by the United Nations that affirms that

South-South development cooperation results in growing trade and investment flows between contributing developing countries and recipient [least developed countries]. It has often played a catalytic role in leveraging market transactions, such as “natural-resources-for-infrastructure” arrangements, undertaken mainly by China in African countries. China builds infrastructure (e.g., roads, bridges, power stations) in African countries in exchange for long-term contracts ensuring the supply of raw materials (e.g., oil, minerals, agricultural products) in the form of exports to China (United Nations 2011, 33).

The Chinese strategy of South-South cooperation has been criticized for being donor-oriented and not properly suitable to the local realities of the recipient countries (Sharma 2016). Nevertheless, China’s official discourse highlights that its aid programs are developed within the framework of international cooperation, with sincerity and without any conditionality attached.

The literature indicates that China’s cooperative relations with emerging or developing countries are supported by previous trade and investment flows. This relationship can be formed via bilateral, multilateral or broad cooperation agreements. Therefore, despite China not imposing political constraints related to political regime and respect to the determinations of international institutions, the economic mechanism becomes a way of conditioning the action of its partners (Mawdsley 2019; Lin and Wang 2017b; 2017a). This behavior is not restrictive. Preferably, following its objective of expanding its global insertion process, China chooses to establish political and economic relations with its partners. But the type of relationship built and the cooperation that emerges from the established relationship has a relationship with the pre-existing economic flows or with the signed cooperation agreements.

China is notable for its pragmatism in its domestic and international actions. According to Mawdsley (2019) it seems to be inevitable and inherent to the complexities of deepening relations and expanding investment that the larger SSC partners may find it especially hard to sustain the claim or reality of non-interference: their relationships and investments require deeper and more interventionist approaches. The institutional and regulatory infrastructures around SSC are in some cases catching up with the expansionary phase.

The three main focus of Chinese SSC are the Asian, African and Latin American and Caribbean countries, especially the low-income developing countries. According to the Information Office of The State Council of China (People’s Republic of China 2014) “from 2010 to 2012, China appropriated in total 89.34 billion Yuan (14.41 billion U.S. dollars) for foreign assistance in three types: grant ( aid gratis), interest-free loan and concessional loan” (People’s Republic of China 2014, 1). This amount was divided in actions for 121 countries, 51 of these from the African continent (People’s Republic of China 2014).

The Chinese government justifies its cooperation program saying that it helps improve “people’s livelihood” by promoting agricultural, educational, medical and health services development, building public welfare facilities, and executing humanitarian aid (People’s Republic of China 2014). For example, the main declared goal of Chinese foreign policy for LAC, as pointed by Harris and Arias (2016), is to “leverage their respective strengths, tap the full potential of cooperation, and seek to become each other’s partners in economic cooperation and trade for mutual benefit and common development” (Harris and Arias 2016, 516).

China published two Policy Papers for LAC countries, the first one in 2008 (People’s Republic of China 2008) and the second one in 2016 (People’s Republic of China 2016), both in accordance with the internationally accepted SSC definition, which involves respect for sovereignty, non-interference, mutual benefits, among others.

However, despite the rhetoric behind those principles, Sharma (2016) points out that Chinese cooperation projects, especially on the African continent – but the same would happen in LAC countries – have been the subject of several controversies for not considering the specific characteristics of countries, such as levels of justice, sustainability, inclusion and security issues like the presence of terrorist groups in the region. Such characteristics can be fatal to the effectiveness and efficiency of the projects, especially when most of those projects are executed in the form of financial aid (Sharma 2016).

We can complement Sharma’s (2016) criticism of Chinese SSC with conventional wisdom absorbed by journalists, western scholars and politicians about the role of China in Africa. Deborah Brautigam (2015) asserts that the lack of accurate information in Chinese press and African governments contribute to most public fears about Chinese agricultural investment in Africa in the West. The four common beliefs are: (1) China as a great farmland purchaser with a lot of Chinese workers “brought in to work on these lands;” (2) Chinese Government “leading the effort to acquire land in Africa as part of a great plan;” (3) “Chinese have developed a voracious appetite for African grain” (Sousa and Leite 2018); (4) “Chinese Government has sent large members of Chinese peasant to settle in Africa.” Brautigam’s empirical research shows that none of these stories are true. In fact, “according to the United Nations Commodity Trade database, it is China that have been sending food to Africa” (Brautigam 2015, 3).

Already in 2012, Dambisa Moyo (2012) refuted the conventional vision about the role of RPC in Africa and pointed out:

the evidence does not support a claim that Africans themselves feel exploited. To the contrary, China’s role is broadly welcomed across the continent. A 2007 Pew Research Center survey of 10 sub-Saharan African countries found that Africans overwhelmingly viewed Chinese economic growth as beneficial. In virtually all countries surveyed, China’s involvement was viewed in a much more positive light than America’s; in Senegal, 86 percent said China’s role in their country helped make things better, compared with 56 percent who felt that way about America’s role. In Kenya, 91 percent of respondents said they believed China’s influence was positive, versus only 74 percent for the United States (Moyo 2012).

Perhaps the best exponents of the contemporary Chinese position on CSS are Justin Yifu Lin and Yan Wang, who systematized the Chinese development assistance policy, labelled as “structural transformation.” Using Lin and Wang words, the Chinese SSC and development “should be explained beyond aid.” Lin and Wang criticized conventional development aid, usually named as North-South cooperation based on ODA (Lin and Wang 2017b; 2017a) and based on OECD guidelines. They propose a broader approach, like that implemented by PRC, “combining aid with trade and investment”:

The South-South development cooperation uses all three activities to capitalize on recipient countries’ economic strengths. This allows the SSDC to avoid the bottlenecks in partner countries that one sees under the standard ODA model, which separates aid from trade and private investment – and thus impedes countries from exploiting their comparative advantages. In our book, we look at this topic through the lens of New Structural Economics. NSE treats modern economic development as a process of continuous structural change in technologies, industries, and hard and soft infrastructure – all of which increases labor productivity, and thus per capita income (Lin and Wang 2017a).

According to Lin and Wang (2017b), South-South development Cooperation is “the exchange of resources, technology, knowledge, and expertise between developing countries, also known as countries of the Global South. It is based on the principles of solidarity, mutual respect, mutual benefit, and noon-interference in domestic affairs” (Lin and Wang 2017b, 87).

New Structural Economics is, in fact, the methodology of the “structural transformation” approach that explains the most “successful developing countries’ performance” (Lin and Wang 2017b). The NSE starts with the observation that the nature of modern economic development is a process of continuous structural change in technologies, industries, and hard and soft infrastructure which makes possible the continuous increase in labor productivity and thus per capita income in an economy (Lin and Wang 2017b). The authors emphasize the role of the state in development – facilitating provision of hard and soft infrastructure and identifying the country’s existing and latent comparative advantages in a competitive market. Lin and Wang’s (2017b) argument points to a direction in the modus operandi of Chinese cooperation. China, adopting its own model of cooperation in the current moment of the global economy, is based initially on its trade and investment relations and, in a second moment, on establishing cooperation relations, notably with developing countries, so as to create a relationship of financing in mutual strategic sectors ² .

In consonance with Lin and Wang, Li Xing (2017) highlights the strategy of rising China by capital accumulation and strengthening – the strategy of “Tao Guang Yang Hui,” ³ – and the importance of “flying geese” model for that purpose. In fact, an East Asia model with these characteristics: “1) Intra-regional ‘take-over,’ ‘ladder’ and ‘chain’ pattern of economic relations; 2) Intra-regional market and trade; 3) Intra-regional investment” (Li 2017, 2):

This pattern (flying geese) describes the sequential order of the catch-up process of industrialization of latecomer economies. It focuses on three dimensions (or stages): intra-industry; inter-industry; and international division of labor. The third element in particular involves the process of relocating industries across countries, from advanced to developing, during the latter group’s process of convergence. A prominent feature of this stage is that exports of labor-intensive consumer goods start declining and capital goods begin to be exported. In this stage, a group of economies advance together through emulation and learning-by-doing (Lin and Wang 2017b, 30).

That intra-regional model of Cooperation became a global initiative led by China since the “Going Global” Policy launched in 21st century by Hu Jintao government:

With astonishingly higher economic growth over the last three decades and with its mounting accumulation of capital and wealth, China has begun to increase its influence on global issues and to shape international agendas and governance patterns. Since 2010, the world has been witnessing an unfamiliar pattern of China’s behavior in which Beijing is seen to have become increasingly assertive and uncompromising both in rhetoric discourse and foreign policy (Li 2016, 7).

Accordingly, the Chinese government adapted the Zhou Enlai’s principles of Chinese foreign aid to the 21 ^st century, embodied in two White Papers published in 2011 and 2014 respectively (People’s Republic of China 2014; 2011). With these important steps, China outlines new aid practices and other forms of cooperation trying to improve its credibility as a leader in world affairs in a new attempt to relaunch of Bandung spirit (Renzio and Seifert 2014; Amin 2015; 2016). The open question is if China would take over to rebuild a “new front in the South,” that is, a new Bandung capable of supporting the independent initiatives of the peoples and the States of the South (Domínguez Martín et al. 2019, 249). The possibility of a new Bandung is very necessary to pursue, in a coherent and consistent way, a revival of the spirit of solidarity and cooperation among the countries of the South to consolidate an alliance towards social progress (Assie-Lumumba 2015, 8).

Conclusion

China recognizes itself as world’s largest developing country. The Asian giant emerged to become a “global economic power and a pivotal stakeholder to international economic and financial institutions: 1) China is the largest trading nation and the largest trading partner for a majority of countries; 2) an important source of aid and development assistance; 3) a relevant and attractive model of economic development” (Li 2019, 41). In the White Paper of 2014, PRC brings forward its holistic position on external aid for development emphasizing once more the principles of Bandung.

When providing foreign assistance, China adheres to the principles of not imposing any political conditions, not interfering in the internal affairs of the recipient countries and fully respecting their right to independently choosing their own paths and models of development. The basic principles China upholds in providing foreign assistance are mutual respect, equality, keeping promise, mutual benefits and win-win (People’s Republic of China 2014).

South-South Cooperation does not have a single universally accepted and employed definition, but there is a convergence of expectations about the principles used in that type of cooperation if we consider a broad perspective of SSC. The Chinese viewpoint does not separate aid, investment, trade and financial cooperation, and involves respect for sovereignty, self-determination, non-intervention in internal affairs, no conditions attached, and mutual benefits. These attributes of SSC were repeated since its beginning – which dates back to the Cold War and the Not Aligned movement – (Minillo and Adad 2015), notwithstanding the constant defeats vis-à-vis ODA’s hegemonic regime and the conditionalities of IMF and World Bank.

In fact, the Chinese government’s official definition of SSC is in line with such expectations (Li 2012) and the official discourse asserts that the Chinese cooperation projects are executing aiming for international development – they even mention the Millennium Development Goals agenda – and mutual benefits (People’s Republic of China 2014).

Nowadays, Chinese aid, loans and investments in Africa and Latin America and the Caribbean (LAC) far surpass those conceded by the World Bank and the IMF. RCP became the first and second trade partner of most countries in the world system. Vadell et al. (2014) highlight that, since the financial crisis of 2008 it is possible to perceive an increasing deficit in the investment in infrastructure, especially in the developing world. According to an OECD research, approximately USD 70 trillion would be needed by 2030 to meet investment demands in electricity, water, telecommunications transport, and generation, transmission and distribution of energy (Organisation for Economic Co-operation and Development 2006; 2007). In addition, private investment declined since the 2008 crisis (Wigglesworth 2012), multilateral banks of development and ODA limited the investments in infrastructure projects to less than 10% for less developed countries and for emerging medium powers (Chin 2014).

China performs its functions and responsibilities as an inductor of development through a strategy that captures the essence of SSC principles of Bandung and Zou Enlai. It maintains a broad perspective of development cooperation and integrate the triad aid, trade and investments in only one principle. This non-restrictive approach of SSC comes at an opportune time for less developed countries bringing about changes in the international aid and cooperation regime. The so called: “Development Cooperation for Structural Transformation,” concept developed by Ling and Wang (Lin and Wang 2017b) is in consonance with the Chinese Government’s approach.

In the White Paper on Peaceful Development, China (2014) defends multilateral institutions to promote development and peace and at the same time promotes new strategic regional partnerships with the Global South, based on a more assertive Chinese foreign policy under Xi Jinping’s leadership. Li Xing (2017). This fits into the debate about a new Chinese great strategy, a “striving for achievement” ⁴ approach (Qin 2014; Yan 2014) that would represent “a shift toward a more proactive foreign policy in face of new challenges and constraints by the existing US-led world order” (Li 2016, 21).

According to Domínguez Martín (2017), South-South Cooperation is an essential part of the Chinese identity because the fundamental contributions of that country – starting with Zhou Enlai’s five principles of peaceful coexistence – that systematized the so-called “spirit of Bandung,” are still one of the pillars of the Chinese cooperation doctrine (Domínguez 2017, 7). Therefore, Bandung’s idea of a new “spirit” addresses the question of what the South can do for itself through South-South cooperation and how these countries can influence the world order through collective action. (Domínguez Martín et al. 2019).

The article concludes that the structural transformation approach to development is creating challenges for the Western SSC regime in the world capitalist system. In this context, China’s new cooperation dynamics have been moving away from traditional aid schemes, covering the CSS with new practices of political dialogue, trade agreements and infrastructure financing, opening the doors for a possible new cooperation regime, a kind of Bandung reloaded.

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Notes

• 1
  According to the Background paper of the Fourth United Nations Conference on the least developed Countries (2011) South-South Cooperation (SSC) “refers to cooperation activities among the developing countries on the basis of solidarity in a number of areas, including trade and investment, financial, technical and technological cooperation and the sharing of knowledge, experiences, policies and best practices” (United Nations 2011, 03).
• 2
  We should make clear that the NSE proposal is not equivalent to the Chinese foreign policy for the development of the Global South. Likewise, two important convergence points should be highlighted: firstly, the strong and active role of the State to promote development and; secondly, the recognition that there is no single recipe to achieve development.
• 3
  Expression that means: “to hide brightness, and to nourish obscurity.”
• 4
  In Chinese: “ You Suo Zuo Wei ”

Publication Dates

• Publication in this collection
  18 May 2020
• Date of issue
  2020

History

• Received
  16 Jan 2020
• Accepted
  31 Mar 2020