New Multilateral Development Banks and Green Lending: Approaching Scalar Complexities in the Global South

Newly established multilateral development banks promote green finance and support a green transition in the global South. This article examines the new multilateral development banks using a dynamic view and documents the projects and lending preferences of New Development Bank (NDB) in Brazil and Asian Infrastructure Investment Bank (AIIB) in Turkey. While AIIB and NDB have made it easier for global South actors to access infrastructural investment funding and are committed to expanding green lending, their commitment rests on the use of country systems and national financial intermediaries. This results in extending loans for projects with significant risk and ignoring the broader connections of the projects to the environmentally hazardous strategies of capital accumulation. Despite their strong green discourse, their design and the way their mandates have been interpreted render new multilateral development banks prone to business as usual.     

Soft balancing against the US ‘pivot to Asia’: China’s geostrategic rationale for establishing the Asian Infrastructure Investment Bank

The existing accounts about the China-led multilateral development bank—the Asian Infrastructure Investment Bank (AIIB)—have focused on the USA’s policy concerns and the economic and commercial reasons for China having established it. Two deeper questions are left unaddressed: Was there any strategic rationale for China to initiate a new multilateral development bank and, if so, how effective is China’s strategy? From a neorealist balance-of-power perspective, this article argues that China has felt threatened by the Obama administration’s rebalance to the Asia-Pacific strategy. In response, China is opting for a soft-balancing policy to carve out a regional security space in Eurasia in order to mitigate the threat coming from its east. China’s material power, premised on the fact that the country is a huge domestic market and flush with cash, has proved irresistible for Asian states, with the exception of Japan, to be enticed away from the USA. On the one hand, this article adds weight to the claim that although the USA remains the pre-eminent military power in the Asia-Pacific, it has fallen into a relative decline in regional economic governance; on the other, China’s soft balancing has its own limitations in forming like-minded partnerships with, and offering security guarantees to, AIIB members. A China-led regional order is yet to have arrived, even with the AIIB.     

Coordinated Credit Spaces: The Globalization of Chinese Development Finance

This article examines the emergence of Chinese development finance on the global stage and evaluates the extent to which it differs from, complements and/or competes with the Western‐backed development finance institutions. Whereas the new, China‐backed multilaterals are closer to the Western model, especially the Asian Infrastructure Investment Bank, this analysis finds that China's national development finance is significantly distinct along three parameters — the scale and business model of Chinese finance relative to its Western counterparts, the composition and approach of China's lending portfolio, and the governance of China's development finance institutions. These differences can be seen as complements to the Western‐backed system, given that much of Chinese development finance has flowed into countries and sectors in which Western development finance institutions have ventured to a lesser extent. However, the globalization of Chinese development finance, patterned on the international diffusion of what is coined in this article as the ‘coordinated credit space model’, contrasts with Western development finance, governance and business models, and has triggered a competitive stance from Western actors. Either contestation or convergence are possible trajectories for the future, and the outcome will be determined by whichever can produce conditions akin to the ‘politics of productivity’.     

Not-so-new silk roads: Japan's foreign policies on Asian connectivity infrastructure under the radar

Scholarly narratives concerning China's Belt and Road Initiative (BRI) tend to contextualise this project within China's rivalry with the United States and Japan. Such interpretations often reduce and misconstrue Japan's initiatives in Asian infrastructure finance as mere reactivity to China's advances. This paper will showcase Japan's own foreign and financial policies regarding infrastructure in Asia and the New Silk Road regions since the end of the Cold War. I argue that Japan's presence in that field is underappreciated and under-researched, as Japan's infrastructural footprint in the New Silk Road significantly pre-dates the BRI. Furthermore, I stress the fact that Japan's foreign policy in Asian infrastructure finance featured important cooperative postures toward China, especially within multilateral development banks. The paper makes a contribution to emerging scholarship on the BRI—often reliant on strategic communications and projections—by highlighting Japan's role in regional infrastructure to show how our understanding of international relations and international political economy in Asia can be better informed by economic history and area studies.     

伪满洲国的中央银行制度

本文从伪满中央银行的产生、性质、职能角度研究伪满洲国的中央银行制度。伪满中央银行是在日本操纵下继承四行号业务基础上设立的,所谓＂圆活金融、稳定币值、统治金融＂不过是日本扩大对伪满洲国侵略与掠夺的手段与工具,其本质是实现日本的利益最大化。基于上述原因,伪满中央银行作为发币行和政府的银行之职能畸形膨胀,却无法承担集中存款准备、充当最后贷款人以及组织商业银行清算等＂银行的银行＂职能。     

Assessing China's approach to regional multilateral security cooperation

This article analyses factors that cause China to have different approaches to different regional multilateral security institutions. Current research not only has little to say about China's motivation to participate, but also little regarding the level of its participation in or support for regional security institutions. To explain why China's post-cold war participation in regional multilateral security institutions varies, this article argues that threat levels help explain China's conditions for participating in multilateral security institutions, and security interests help explain China's behaviour as a member of such institutions. The author stresses that these are useful variables that can explain China's behaviour with respect to regional multilateral security institutions. In the foreseeable future, China's general posture toward regional multilateral security cooperation will be passive participation and strong support. Australia should not only consider strategies which emphasise strengthened bilateral relationships between Canberra and Beijing, but also continue to positively support regional multilateral security institutions.     

‘Minilateral’ Development Banks: What the Rise of Africa's Trade and Development Bank says about Multilateral Governance

Multilateral development banks (MDBs) are one of the most popular forms of international organization, with at least 27 operating in the world today. Although most academics and policy makers focus on the World Bank and major regional MDBs, the majority of MDBs are in fact relatively small, and controlled by developing as opposed to industrialized countries. How do the differing governance arrangements of these ‘minilateral’ development banks (MnDBs) impact their operations? This article takes the Trade and Development Bank (TDB), an MDB in Africa with 22 regional member countries, as a case study to consider this question. Based on an analysis of TDB's track record since 2005 and interviews with management and shareholders, the author finds that borrower‐led governance leads to substantial disadvantages in terms of access to finance. Borrower‐led governance permits TDB and other MnDBs greater operational flexibility, which partially compensates for this financial disadvantage, but these operational strategies come with trade‐offs in terms of developmental effectiveness. The findings suggest that MnDBs have substantial latent potential and, in an increasingly multipolar world, they are likely to grow in coming years. However, MnDBs need to ensure that their developmental value added is strengthened in step with their financial power.     

The (Ineffective) Financial Statecraft of China's Bilateral Swap Agreements

Since 2008, the People's Bank of China has signed bilateral swap agreements (BSAs) with 35 foreign central banks. Collectively, these deals amount to nearly US$ 500 billion in Chinese renminbi (RMB) available to Beijing's foreign partners. What has led China to be so aggressive in its efforts to sign so many swap agreements? What are the political economic implications of the swap programme for the US‐centric global economic order? China's BSAs can be understood as a form of financial statecraft: the use of national financial and monetary capabilities to achieve foreign policy ends. China has deployed BSAs for both defensive and offensive reasons. Defensively, Beijing has sought to use BSAs to promote trade settlement in RMB thereby reducing China's vulnerability to the dollar's structural dominance in trade. Yet, as explained in this article, they have been ineffective in this regard. Offensively, Beijing has used BSAs as a short‐term liquidity backstop outside of the Bretton Woods institutions for partner countries in need. Here, there is greater potential for BSAs to impact the status quo economic order by enhancing Chinese economic influence. However, their potential is dependent on Beijing's willingness to act as a unilateral crisis lender and its ability to further internationalize the RMB.     

Can South–South Cooperation Compete? The Development Bank of Latin America and the Islamic Development Bank

Southern‐led multilateral development banks (MDBs) play a key role in harnessing global capital to finance the sectors most important to borrowers, especially infrastructure. Two prominent Southern MDBs, the Development Bank of Latin America (CAF) and the Islamic Development Bank (IsDB), have become crucial drivers of regional infrastructure growth. This article explores whether their performance has lived up to their goals of establishing borrower control over bank governance without sacrificing financial dynamism. Using power‐weighted voting indices for member representation on bank boards, the authors determine that these banks offer borrowers much more representation on their boards than do their Northern‐based counterparts, the Inter‐American Development Bank (IDB) and the World Bank International Bank for Reconstruction and Development (IBRD). The article also analyses bank operations to determine whether their governance structure impacts their internal performance, as reflected on balance sheets, and external performance — gaining relevance in development finance and particularly in infrastructure lending, including the burgeoning sector of sustainable (climate‐resilient) infrastructure. The authors find that the CAF and IsDB have become major players in development finance, including in sustainable infrastructure. However, important issues remain in relation to their continued internal capacity development, especially with regard to the environmental and social safeguards necessary to oversee lending.     

Limits to the Washington Consensus: Boundary struggles and China's transition economy

This paper explores the interconnected normative and geopolitical-economic tensions between the Washington Consensus and the Chinese state through an analysis of reform discourses and practices at the World Bank. Frequently framed as opposing visions and templates of development, the World Bank and the Chinese state have engaged in a protracted relationship of mutually-informing exchanges of economic expertise, technical assistance, and policy formulation, evolving significantly since China's ‘opening up’ in 1978. I trace these shifting relations through an interpretive strategy inspired by Nancy Fraser's concept of boundary struggles, focusing on how the World Bank has challenged, affirmed, and affected China's institutionalized division between polity and economy. Through a new periodization of the World Bank/China nexus, this paper shows how transformations in geopolitical-economic relations condition the normative construction, representation, and reception of ‘economic models’. It also challenges antipodean conceptions of the ‘free-market’ Washington Consensus and ‘state-capitalist’ China through demonstrating the qualitative character of their state/market articulations.     

World Bank Influence and Institutional Reform in Argentina

During the 1990s, reforms concerned with ‘good governance’ became popular with multilateral and bilateral lenders. This trend was led by the World Bank, which claimed that in order to achieve economic development, institutions mattered. This article looks at governance reforms in Argentina, specifically in the judicial sector, and contends that World Bank involvement affected the nature, reach and depth of these initiatives. The influence of the Bank can be traced through three dimensions that have characterized its approach to institutional reform: donor‐driven designs for project reform; reliance on technical approaches; and restricted forms of decision making in project initiatives. Such an approach to institutional change conditioned domestic reform in Argentina and contributed to piecemeal and inadequate initiatives. The author also argues that the Bank's approach in Argentina can be traced to wider strategies that derive from embedded institutional practices and ideological foundations within the institution that throw into question the Bank's capacities to promote such reforms.     

救济与控制：中国通商、四明和中国实业三行的改组

白银风潮前夕,中国通商、四明和中国实业三行因长期经营不善而资金周转不灵.在白银风潮中,三行同时陷入挤兑的困境,而在法币改革后,三行因难以缴足发行准备金而再度陷入困境.在这两个过程中,国民政府以救济之名,实施控制,并最终对其增资改组,将其纳入政府金融体系.     

China and the emerging regional order in the South Pacific

As China rises, it has become increasingly aggressive in applying its soft power in the Pacific. What does China's arrival mean for the emerging regional order in the Pacific? What is it up to in the strategic backwater of the Pacific, which has traditionally been regarded as an ‘American lake’ and Australia's ‘special patch’? Setting my analysis in the broad context of China's new global diplomacy, I argue that the pattern of China's assertive behaviour in the Pacific is no different from its approach to other regions in the global South. I further argue that with only limited strategic, diplomatic and economic investment in the Pacific, China has become a regional power by default. The arrival of China, therefore, is unlikely to provoke any new round of great power competition. Rather, it offers opportunities for the world's second most formidable development challenge.     

Multilateral Development Finance in Non‐Western Thought: From Before Bretton Woods to Beyond

Recent initiatives of China and other emerging powers to create new multilateral development lending institutions (MDLIs) are often portrayed as efforts to build upon and/or reform an idea pioneered by Western officials during the Bretton Woods negotiations. However, recent literature has shown that support for MDLIs also had deeper non‐Western roots in the pre‐Bretton Woods era. What led thinkers outside the West to propose MDLIs in that earlier period? How might their ideas be relevant to current non‐Western initiatives to create new MDLIs? This article addresses these questions with a special focus on the ideas of China's Sun Yat‐sen (1866–1925) and Peru's Víctor Raúl Haya de la Torre (1895–1979). Although their intellectual journeys were quite distinct and their specific proposals differed, these two thinkers advocated the creation of MDLIs for similar reasons that stemmed from their anti‐imperialist sentiments. Their ideas find some echoes in current non‐Western initiatives.     

“They will not automatically benefit”: The politics of infrastructure development in Laos's Northern Economic Corridor

At a time when the shortcomings of neoliberal development are well known, China's Belt and Road Initiative offers both an opportunity and a requirement to revisit the question of a more inclusive, equitable approach to infrastructure development. This article examines the case of the Northern Economic Corridor, a highway-centered regional trade corridor constructed through northwestern Laos in the early-mid 2000s that was co-financed by the Asian Development Bank and the governments of China and Thailand, and that has been subsequently included in the BRI as one of a group of regional corridors following the historical trajectories of the Silk Road. By examining the discursive politics of infrastructure's formal geography – and focusing on the practices that manage how publicly funded projects address predictable, negative impacts – this paper engages with emerging research on the BRI, wider scholarship on infrastructure, and the political geography of transnational development cooperation and financing at multiple scales. Specifically, I show how vulnerable populations were excluded from the protections of infrastructure mitigation along an early BRI project, and use this to argue that scholars, community advocates, infrastructure planners, financiers, regulators and others engaged with the BRI and other new infrastructure initiatives should rethink established conventions that demote the attention paid to “indirect” impacts. I highlight the arena of formal-geographic mitigation planning as a key field of engagement in the struggle to make new infrastructure live up to expectations about inclusive and equitable development.     

Japan's response to China's rise: regional engagement, global containment, dangers of collision

Japan and China's ability to manage their bilateral relationship is crucial for the stability of the East Asian region. It also has a global impact on the security and economic development of other regions. For just as China's rise has inevitably involved an expansion of its global reach, so Japan's responses to the challenges posed by China have increasingly taken a global form, seeking to incorporate new partners and frameworks outside East Asia. Japan's preferred response to China's regional and global rise in the post‐Cold War period has remained one of default engagement. Japan is intent on promoting China's external engagement with the East Asia region and its internal domestic reform, through upgrading extant bilateral and Japan–China–US trilateral frameworks for dialogue and cooperation, and by emphasizing the importance of economic power to influence China. Japan is deliberately seeking to proliferate regional frameworks for cooperation in East Asia in order to dilute, constrain and ultimately engage China's rising power. However, Japan's engagement strategy also contains the potential to tilt towards default containment. Japan's domestic political basis for engagement is becoming increasingly precarious as China's rise stimulates Japanese revisionism and nationalism. Japan also appears increasingly to be looking to contain China on a global scale by forging new strategic links in Russia and Central Asia, with a ‘concert of democracies’ involving India, Australia and the US, by competing for resources with China in Africa and the Middle East, and by attempting to articulate a values‐based diplomacy to check the so‐called ‘Beijing consensus’. Nevertheless, Japan's perceived inability to channel China's rise either through regional engagement or through global containment carries a further risk of pushing Japan to resort to the strengthening of its military power in an attempt to guarantee its essential national interests. It is in this instance that Japan and China run the danger of a military collision.     

Projections of China's normative soft power

Fuelled by unparalleled recent development, China has by necessity been reaching outward in search of foreign resources and international recognition. The three books reviewed in this essay all speak to China's spectacular global ascendency of the past two decades—and to the political consequences and international reactions that have followed. What unites these three volumes—Tongdong Bai's China: The Political Philosophy of the Middle Kingdom (2012), Peter Nolan's Is China Buying the World? (2012) and William Callahan and Elena Barabantseva's edited volume, China Orders the World: Normative Soft Power and Foreign Policy (2011)—is their focus on the uniquely Chinese norms that now underpin China's soft power in the twenty-first century. How will China go about ordering the world and will it succeed? The answers to these questions, as these authors demonstrate, may have less to do with China's present than with its ancient past.     

Beijing’s institutional-balancing strategies: rationales,implementation and efficacy

China has in recent years been actively engaged in multilateral diplomacy. From the Shanghai Cooperation Organisation and the Conference on Interaction and Confidence Building Measures in Asia to the Asian Infrastructure Investment Bank and the One Belt, One Road initiative, Beijing is pursuing strategies and promoting norms that are viewed as concerted efforts by China to challenge some of the key institutional arrangements of the existing international order. This article seeks to discuss these contentious issues and assess the rationales, approaches and implications of Chinese diplomacy in initiating and promoting what can be considered as institutional-balancing strategies. The author suggests that the rationales behind these Chinese strategies have as much to do with Beijing’s shifting priorities and the need to address them as with reflecting a degree of dissatisfaction with existing multilateral institutions. And there are more marked differences in Chinese motivations and modalities in security arenas than in economic areas. However, it would be overstating Beijing’s intentions and capabilities if these China-sponsored initiatives are viewed as direct challenges to the existing international and regional orders.     

Big Pharma's Internationalization of R&D to China

China's increasing integration into the global pharmaceutical value chain is occurring at a time when big pharma's traditional R&D model has entered a period of crisis, and when China faces significant challenges in providing healthcare for its huge and rapidly ageing population. Despite China's ambitions of promoting its own pharmaceutical sector, it is likely to continue to depend for some time on significant contributions from foreign companies. While this situation provides considerable opportunities for big pharma companies to expand their markets in China, they are also hoping that offshoring aspects of their R&D to China may contribute to reconfiguring their current R&D model with its weak record of producing new drugs. Drawing on interviews with a small number of pharma R&D centres in Shanghai, patent analyses and industry reports, we provide insights into both the challenges and the opportunities associated with the early stages of establishing such centres in an emerging region with a rapidly growing market. This paper contributes towards a more nuanced view of the internationalization of R&D in emerging regions.     

The Sino-centric Capital Export Regime: State-backed and Flexible Capital in the Philippines

There is an ongoing debate as to whether Chinese capital can be described as developmental. While some argue that Chinese capital is simply a tool of the Chinese state to exploit the global South, others claim that Chinese capital opens new development opportunities. Rather than advancing a framework based upon either an exploitative or an egalitarian mode of development, this article argues that China's current crisis of overaccumulation has led to a so-called Sino-centric capital export regime, which sends out two types of capital to the global South. First, state-backed capital imposes a development model by modifying ‘local orders’, attempting to make host states legible by creating maps of peoples and terrains that surround China. These maps aim to improve China's ability to manage inter-state disputes. Second, flexible capital is interested in extricating itself from the conditions imposed on it in China. By moving into the global South, flexible capital breaks through the barriers placed by the Chinese state. As a by-product of this quest for extrication, flexible capital can generate new venues of accumulation and novel ways of organizing production. This article demonstrates these two types of capital using examples from Rodrigo Duterte's Philippines — the Kaliwa Dam project and online gambling — drawing on original field research and a newly generated dataset.