‘Beijing Consensus’ and its Impact on the Changing Landscape of ODA (Official Development Assistance).

Introduction

Since the early 1990s, China has drawn the attention of the international community to its increasing participation in foreign aid. As China does not belong to the group of traditional aid donors, generally known as the Organ isation for Economic Cooperation and Development (OECD), it has operated its aid programme largely independently from the rest of the donor community. This has led to speculation about China’s foreign aid policy, and the nature of its relations with aid recipients. Continued concentration by predominantly American and Western governments on China’s need for natural resources and its relations with regimes that Western governments view negatively, has led to criticisms of China, causing distrust, suspicion and occasionally animosity in their foreign relations1. As such, many countries continue to struggle to formulate a clear and concise China policy that is both effective and compatible with China’s changing international position. It is not argued that these criticisms are unjustified, but rather, that the concentration on China’s transformation from aid recipient to aid donor, clarifies the discussion of China’s foreign aid policy and its impact on the larger donor community.

Developmentalism and the ‘Beijing Consensus’

The emergence of China as a dominant economic and political force has led to changes in the structure of international relations and transformed China’s position internationally. An examination of developmenatlism and its impact on China’s own developmental model, in the form of the ‘Beijing Consensus’, provides a clearer and more concise framework of China’s foreign aid behaviour, its impact on aid recipients, and its implications for the larger foreign aid donor community.

The developmentalist norm specifies the manner by which the pursuit of an optimum path that a nation should take in its development is controlled in political, economic and social terms. The ‘Beijing Consensus’ frames the current developmentalist norm in terms of China’s own developmental success and experience2. The Consensus is not presented in terms of unrestrained development as much as a firmly controlled guided path to growth, which allows access to the international community via paths that protect the life and political choices of the developing world3.

Western approaches to development established a precedent for success which it has sought to prescribe globally. H owever, this precedent was shaped largely by colonialism and imperialism; ideologies that China has displayed an historic aversion towards4. The Western approaches advocate growth through economic, political, and social openness. As such, its economies are founded upon trade in competitive global markets, which ensures that the economies remain sustainable and continue to grow. Such markets are dominated by the highly developed, and mostly Western, countries who pursued this path to development in the post- World War II years. Conversely, for developing countries, entry into such development paths and markets, in more recent times, is considered difficult because of the significant barriers to entry. As such, the Western approaches to development were viewed as stifling to both political and economic development in the Third World5. China, in contrast, has followed a development path which has remained localised and relatively free from the competitive forces of Western- dominated markets.

Table 1 demonstrates three different development paths, in political, economic and social terms, and shows how the examples of traditional Western development paths, as well as China’s development paths from the early days of the People’s Republic of China (PRC) and its modern path as manifested by the ‘Beijing Consensus’ relate to the global economy.

Table 1: Comparison of developmental paths.

How China presents the ‘Beijing Consensus’

The Chinese view of development stresses that there are no universal paths or defined prescriptions to development7. In order to develop as a country, and emerge into the international system, development has to be closely managed, nurtured and refined in gradual stages such that its environment remains stable and free from competitive forces until it is sufficiently mature.

By presenting an alternative path to development through the ‘Beijing Consensus’, China has been able to style itself as leader of the global South and champion of a progressive international order, further underlining the identity of China as a great power. China’s belief in this developmentalist policy encourages its aid donation to nurture developing world markets, upon which future trade relations can be founded. In order to accelerate the beneficial aspects of development, China promotes the use of innovation, and indirect cost-effective solutions, in achieving developmental goals. This allows traditional targets of development to be achieved not only through non-traditional approaches, but also without having to adhere to the traditional donor’s specific development criteria. China also holds a firm belief in the overall long- term benefit of development, where positive aspects, termed ‘green or clean GDP growth’ outweigh the more seemingly transient negative aspects, termed ‘black GDP growth’8.

The ‘Beijing Consensus’ has become reinforced by the identities that were inherent in China during its own development. During this period, China displayed an image of competent self-reliance. However, as the success of its reforms grew, this was increasingly reflected through the exercising of the developmentalist norm, an image of competent economic professionalism which echoed Deng’s early epitomisation of the developmentalist norm entrepreneur, by demonstrating reproducible success according to a strictly formulated path. Such success on its own terms fuelled its self-esteem and fed back into its great-power identity.

The ‘go out’ policy, which will be highlighted in the sections on Southe ast Asia, Africa and Latin America, has its origins in Hu Jintao’s ‘Three Closeness’ theory, which was formulated from a refinement of Jiang Zemin’s ‘Three Represents’ ideology. The ‘three closeness’ theory postulates that the development path should be close to the population, reality, and life in order to address the fundamental issues of the specific case of development. It also reflects China’s strong belief in the importance of culture and localisation in development, where developmental schemes are moulded by the local cultures, so they adapt to their environment beneficially9>.

This policy is producing a new generation of entrepreneurs, who aspire to match and extend this success in the name of national and self-interest; therefore, the promotion of this image to the developing world is fuelling mutual aspirations and ambitions. As the ‘Beijing Consensus’ is still evolving, China is exercising prudence through its non-interference policy and, in so doing, is framing the success or failure of its policies in terms of the self-reliance of the individual nations.

How the world perceives the ‘Beijing Consensus’

The development path advocated by the ‘Beijing Consensus’ has met with a wide range of perceptions worldwide10. In essence, the Consensus is more of an attitude that China has been able to apply to itself through harsh control and wide exploitation of its readily abundant mass population; as such, it will be hard to replicate elsewhere. Criticism has also been levelled at the sustainability and equality aspects of the Consensus, as the apparent wealth gap that has arisen in China attests to gross inequality.

Conversely, strong government promotion of economic growth, along with firm government control, initially raised fears that some governments embracing this development path would abuse their authority; however, many of the participating governments have commonly not displayed such behaviour, and more importantly, countries that have displayed such behaviour, such as Myanmar and Zimbabwe, have exhibited little or no interest in actively developing their countries.

As the ‘Beijing Consensus’ is more of an attitude, its speculative application to the developing world seems an enticing way to maintain the status quo and redress the damage inflicted by the ‘Washington Consensus’. By focus ing upon developing countries’ key industries, such as agriculture, China is enhancing mutual understanding. This is consequently being viewed, notably in Africa, as an historic opportunity to break from the neo-colonial ties to the West11, while at the same time bolstering their own development and highlighting the shortcomings of the Western models12. A factor that has often impeded localisation arises from extensive external influences which direct development according to the subjective self-interests of traditional aid donors. In order to minimise this factor, and maximise both the self-reliance and determination of a developing nation, China is also promoting the development of asymmetric defensive mechanisms to offset the challenges presented by more developed countries13. This factor is especially appealing to the developing world.

The changing landscape of foreign aid in the 21st century

As China’s status as a rising power continues to be reinforced by its increasing economic and political clout, it has undergone transformation from an aid recipient to an aid donor. This transformation, comple mented by China’s greater role in global issues, such as climate change, trade and security, and its increasing membership in international organisations, has the potential to challenge W estern dominance of international institutions, by providing an alternative to traditional development models. This final section examines the impact that China’s foreign aid and development assistance is having on the international donor community. By focusing on China’s expanding foreign aid programme, and greater participation in regional and international organisations, the challenge that China poses to the international aid regime, and its impact on ODA in the 21st century, can be highlighted.

At the end of the Cold War, the collapse of the global Soviet influence resulted in an increasingly unilateral United States. China’s identity as a significant neutral supporter of the developing world subsequently became unbalanced, inducing a shift in its identity to counterbalance the United States. These events, which contributed to the uptake of developmentalism, along with the aftershock of Tiananmen Square, had the effect of shifting China’s focus increasingly towards international responsibility. Its aid from the 1990s onwards reflects this transition, as its foreign policies and activities have become more significantly enhanced through the re-enforcement of this identity.

As China’s behaviour, following its identity transformation stabilised, Deng Xiaoping formulated his idea to ‘focus on developing the economy but keep a low profile in international affairs’ as a means for dealing with the diplomatic difficulties of the G7/G20 and other industrialis ed countries14. This allowed China to continue prioritising the stabilisation of its aid commitments rather than increasing them. Consequently, China increasingly and actively sought partnerships abroad, both with international organis ations, and on an interstate level. In the mid-1990s, China’s policies in Southeast Asia, which were informed by its increasing international responsibility and desire for development and adherence to regional stability by maintaining and enforcing of sovereignty, led it to develop stronger ties with its Asian neighbours. Alt hough this did not induce a further change in identity, it did reinforce its existing identity as a great power. In Southeast Asia, this was reflected by its increased involvement with ASEAN, in the aftermath of the Asian financial crisis of 1997, and greater cooperation throughout the region in its reform and infrastructural projects. In Africa and Latin America, its policies have become reflected through its supportive, but non-interventionist, role in the institutions of the region. Since the start of the 21st century, China has continued to reinforce its international position through its foreign aid policies to aid recipient countries.

Following the Asian financial crisis of 1997, China began to widen its multilateral involvement with the institutions of ASEAN, through the newly emerged institutions of ASEAN+1 and ASEAN+3. Its institutional activities in the early 2000s provided it with greater opportunities to demonstrate its commitment to Asian unity through regional cooperation. The onset of the Severe Acute Respiratory Syndrome (SARS) and avian flu epidemics in 2003–4, as well as the Southeast Asian tsunami in 2004, highlighted the importance of regional cooperation to China for the management of non-traditional security threats, and catalysed a greater enhancement in its activities in the region. By 2009, in the aftermath of the global financial crisis, many countries within Asia increasingly looked to China for solutions to the recovery of the region, thereby highlighting how much China had increased its regional leadership role. China’s enhanced cooperation with the region aims to become further enhanced following the establishment of the Southeast Asian regional Free Trade Area. This has been created as part of China’s ongoing regional multilateral projects, which include the development of major transportation routes linking Shanghai to Singapore.

The reach of Chinese finance in developing countries has raised concerns about issues such as debt sustainability, environmental standards, human rights, and the undermining of the international norms that have built expectations about what constitutes aid, and how aid effectiveness is assessed15. Chinese officials and scholars maintain that the volume of their aid is a state secret16. Their justification for this lack of transparency is due to the fact that if they revealed specific details they would rapidly find themselves under pressure from many of their aid recipients to increase their levels of aid, and also from their own people to meet their own domestic needs. This fact reinforces the Chinese Communist Party’s (CCP) assertion of strong state control, which shapes China’s identity and makes a concrete picture of China’s aid difficult to ascertain. This raises questions over the proportion, timing, and nature of how Chinese aid is determined. Therefore, it appears that China does not yet have a clear aid policy. More commonly, decisions are announced by senior leaders often to smooth official overseas visits, and the pattern of Chinese external orientation and behaviour becomes more important. While China’s impact on regional and global outcomes is significant, Chinese behaviour and its formulation of foreign policy is key to the continuity and change of China’s foreign relations.

The embracing of the ‘Beijing Consensus’ remains the strongest indicator of the efficacy of the developmentalist norm. Factors such as non-interference and declining Western interest, induced through the 2007 financial crisis, are compounding the internalisation of this norm. In Southeast Asia, the key to China’s continued success lies in its multilateral efforts to raise standards of development in the region, while offsetting the negative influences arising through increases in ‘black GDP growth’. In Africa and Latin America, increased regional acceptance of this norm arises not only through providing a more welcome alternative to current Western policies, but also arises from the reduced activities of more traditional aid donors. This acceptance is still facing considerable resistance from factors such as regionalism in Latin America, which continues to be induced in response to this norm.

Conclusion

Over the last two decades, much of the world has watched China’s economic growth and development with envy and amazement. It is China’s impressive economic growth, with its apparent disregard for, and opposition to, Western models that is making leaders in the developing world take an interest in China’s approach to development. China’s adoption of developmentalism, framed by the ‘Beijing Consensus’, along with its emergence as an aid donor, brings with it the potential to challenge American and Western dominance of the international aid regime. This challenge, in the form of an alternative model to economic development, is seen by many traditional aid donors as a threat to W estern norms and values.

China, by any measure, is an important country, and as such, its role economically, politically, and environmentally, impacts every region across the globe. Yet, even today, it remains an arguably misunderstood, and in the eyes of many Chinese, a misrepresented country. A better working knowledge of China’s historical relations with the nations that receive its aid is necessary, not only as a way to improve relations with China, but also its aid recipients. By studying the norms that influence Chinese behaviour, in this case developmentalism, policy planners, researchers and China experts alike, will have a wider base of knowledge upon which to form a clearer and concise framework to examine China’s foreign aid behaviour, its impact on aid recipients, and its implications for the larger foreign aid donor community.

The evidence of China’s increasing participation in ODA, as demonstrated in Southeast Asia, Africa, and Latin America supports the claim that the landscape of foreign aid in the 21st century is undergoing profound change. As China continues its non-coordinated aid effort, and by its own example promotes an alternative model to economic development, the traditional aid donor community is forced to accept not only China’s position as an international aid donor, but also the norms and values its promotes through its aid programme. China’s alternative aid paradigm, with its emphasis on non-interference, unconditional aid, and mutual benefit, is redefining the donor-recipient relationship, and recognises that historical experiences and exposure to elements beyond its control in the international community has left many in the developing world with no choice but to accept W estern development prescriptions. On their part, much of the developing world has accepted China’s role as an aid donor enthusiastically, preferring an openness and dialogue that respects their particular development needs and concerns, without the patronis ing tone of the traditional donor community.

In order to chart the changes in the landscape of foreign aid in the 21st century, researchers, policy planners and the donor community must recognise China’s presence and participation in ODA, comprehend its impact on donor-recipient relations, and acknowledge the contribution of the ‘Beijing Consensus’ as a viable and legitimate model for economic development. To continue the vitriol directed towards China over its aid relations with the developing world is counterproductive and damaging. Studying the norms adopted by China, and their implications for Chinese foreign aid policy, provides a framework upon which future analysis of Chinese foreign aid is possible, and contributes to a more comprehensive examination of international aid and assistance.

1Mark Tran, ‘ Ban Demands UN Presence in Darfur’, The Guardian, 29 January, 2007. http://www.guardian.co.uk/world/2007/jan/29/sudan.marktran (accessed August 11, 2010); Chris McGreal, ‘ Chinese Aid to Africa May Do More Harm Than Good, Warns Benn’, The Guardian, 8 February, 2007. http://www.guardian.co.uk/world/2007/feb/08/development.topstories3 (accessed August 11, 2010); Howard W. French, ‘ Tattered French African Empire Looks Toward China’, New York Times, 7 June, 2007. http://www.nytimes.com/2007/06/07/world/africa/07iht-letter.1.6036001.html (accessed August 11, 2010).

2See Joshua Cooper Ramo, Beijing Consensus (London: Foreign Policy Centre, 2004).

3People’s Daily, ‘ The “Washington Consensus” and “Beijing Consensus,”’ http://english.peopledaily.com.cn/200506/18/eng20050618_190947.html (accessed August 17 August 2010).

4Peter C. Perdue, ‘ Development, Chinese Style’, paper for Critical Policy Studies workshop, Cambridge, Mass. November 15-6, 2003. http://web.mit.edu/chinapolicy/www/conference1/perdue.pdf (accessed September 22, 2010).

5Arif Dirlik, ‘ Globalization and National Development: the Perspective of the Chinese Revolution’, CR: The New Centennial Review 3, no. 2 (2003): 243-4.

6The Beijing Consensus remains only a possible alternative to the Washington Consensus at present, as China continues to be the testing ground of an alternative development model which has yet to be adopted by another developing country.

7Ramo, Beijing Consensus, 7-10.

8Ramo, Beijing Consensus, 12,22-3.

9Ramo, Beijing Consensus, 31.

10Arif Dirlik, ‘ Beijing Consensus: Beijing “Gongshi.” Who Recognizes Whom and to What End?’, Globalization and Autonomy Online Compendium position paper, January 17, 2006. http://anscombe.mcmaster.ca/global1/servlet/Position2pdf?fn=PP_Dirlik_BeijingConsensus (accessed August 4 2010).

11Ellen Lammers, ‘ How Will the Beijing Consensus Benefit Africa? ,’ The Broker 1 (2007): 16-8.

12Lammers, ‘ How’, 16-8.

13Ramo, Beijing Consensus, 37.

14Huang Yiping, ‘ China’s New Policy Strategy and the G20’, East Asia Forum. http://www.eastasiaforum.org/2009/03/29/g20-chinas-new-policy-strategy/ (accessed July 7, 2010).

15Paul Reynolds, “’ “Peaceful rise” Running into Criticism’, BBC, 1 February, 2007. http://news.bbc.co.uk/1/hi/world/africa/6312507.stm (accessed March 9, 2010); Mark Tran, ‘ Ban ’ ; Chris McGreal, ‘ Chinese Aid to Africa May Do More Harm Than Good, warns Benn’, 8 February, 2007. http://www.guardian.co.uk/world/2007/feb/08/development.topstories3 (Accessed March15, 2010); Sebastian Mallaby, ‘ Palace for Sudan China’s No-strings Aid Undermines the West’, 5 February, 2007. http://www.washingtonpost.com/wp-dyn/content/article/2007/02/04/AR2007020401047.html (accessed April 4, 2010).

16Author’s Interview, Department of International Politics, School of International Studies, Renmin University of China, Beijing, 8 November; 14 November. Author’s Interview, Department of International Politics, School of International Studies (SIS), Peking University, Beijing, 4 December.