China and Global Development: Towards a Global-Asian Era?

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DOI: 10.1080/13569770802519284
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Abstract
The rise of China as an economic and political ‘driver’ of the global economy may presage a new phase of globalization. This paper postulates the emergence of this new phase – a ‘Global-Asian Era’ (GAE) – as a ‘working hypothesis’. It suggests that such an era is likely to be distinct from any of the earlier phases of globalization, and China's global footprint, in terms of its business, economic and political actions and their geopolitical implications, is likely to be markedly different from what has gone before. The paper sketches the reasons for these differences before turning to a discussion of the nature and dynamics of a possible future GAE. Paying particular attention to the developing world, the paper then explores some of the evidence that could be marshalled in support of the hypothesis. It outlines a series of vectors (trade, aid and energy security) along which it is possible to discern some of the ways in which an emergent GAE could be seen as impacting on the developing world. The paper argues that, at least for these vectors, a China-driven GAE is likely to provide dangers as well as opportunities for national development projects.
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China and global development: towards a Global-Asian Era?
Jeffrey Henderson
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China and global development: towards a Global-Asian Era?
Jeffrey Henderson
University of Bristol, UK
The rise of China as an economic and political ‘driver’ of the global economy may presage a new
phase of globalization. This paper postulates the emergence of this new phase – a ‘Global-Asian
Era’ (GAE) as a ‘working hypothesis’. It suggests that such an era is likely to be distinct from
any of the earlier phases of globalization, and China’s global footprint, in terms of its business,
economic and political actions and their geopolitical implications, is likely to be markedly
different from what has gone before. The paper sketches the reasons for these differences
before turning to a discussion of the nature and dynamics of a possible future GAE. Paying
particular attention to the developing world, the paper then explores some of the evidence that
could be marshalled in support of the hypothesis. It outlines a series of vectors (trade, aid and
energy security) along which it is possible to discern some of the ways in which an emergent
GAE could be seen as impacting on the developing world. The paper argues that, at least for
these vectors, a China-driven GAE is likely to provide dangers as well as opportunities for
national development projects.
Keywords: China; globalization; Global-Asian Era; world order; developing countries; trade;
oil; aid; geopolitics
Introduction
We stand at a hinge of history, one of those moments in social evolution where the superimposi-
tion of multiple contradictions from the past is generating extraordinary economic and political
turbulence and uncertainty. That these are reverberating on the human condition, from the indi-
vidual psyche at one polarity to the geopolitical relations of nation states at the other, is no
surprise (cf. Appelbaum and Henderson 1995). The rise of China, and soon perhaps of India
also, is beginning to compound existing contradictions, and this is likely to further complicate
the problems of our contemporary epoch.
Hinges, by their nature, are turning points. They allow doors to swing open to reveal new vistas,
new possibilities, but they also allow them to swing back, at least partially closing down those pos-
sibilities. Until the trajectories for the future have been revealed and stabilized, the world is inevi-
tably cast into crisis. But the crisis of the human condition we now confront should be understood
not in the largely negative, medical sense, evident in European languages: a decisive moment in a
potentially terminal illness. Rather, it needs to be understood in the more optimistic sense evident in
Chinese: as a dialectic between ‘danger’ and ‘opportunity’ (Henderson 1998a, p. 356).
Employing this latter sense of ‘crisis’, this paper looks at some of the consequences of
China’s rise for global development. It does so, however, in a particular way; by postulating
the implications of China’s rise for the nature of globalization. The paper presents a ‘working
ISSN 1356-9775 print/ISSN 1469-3631 online
# 2008 Taylor & Francis
DOI: 10.1080/13569770802519284
http://www.informaworld.com
Jeffrey Henderson is Leverhulme Research Professor of International Development in the Centre for East
Asian Studies, University of Bristol. His current research is concerned with the emergence of China as a
global economic and political actor and the implications of this for the rest of the developing world.
Email: Jeffrey.henderson@bristol.ac.uk
Contemporary Politics
Vol. 14, No. 4, December 2008, 375392
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hypothesis’: that the rise of China and its international expansion may presage a new phase of
globalization: a ‘Global-Asian Era’ (GAE).
The paper begins by recognizing that part of the contemporary ‘crisis of the human condition’
stems from the fact that the structures and contours of globalization are in flux. Out of this flux a
number of alternative forms of globalization are possible, one of which, the paper suggests, may
be a GAE. The paper then turns to a brief sketch of the current phase of globalization out of which
a GAE may emerge, and, subsequently, to a discussion of why a move from the current phase of
globalization to a GAE would be highly contentious.
Recognizing that the external consequences of China’s development are likely to be at least
as significant for the developing world as they will be for the advanced industrial economies, this
paper attends to the former.
1
It suggests that it is in the nature and dynamics of a GAE that the
origins of the economic and political futures of many developing countries are likely to be found.
Given this proposition, the paper proceeds further by noting a number of vectors along which
an emergent GAE could be seen as beginning to impact on the developing world. It makes a pre-
liminary attempt to identify the trajectories of crisis the dangers and opportunities inherent
in movements along three of those vectors.
The paper concludes with a brief methodological comment on the analysis conducted here
and a reassertion that the possibility of a future GAE is an issue worthy of serious consideration.
Future globalizations
That the structures and contours of contemporary globalization are in flux is a proposition that
would be accepted by nearly all analysts of the global political economy.
2
The issue, then, is not
whether change is occurring, but rather the direction (or directions) of change and the nature of
its possible outcomes. With political-economic change, be it globally or nationally, we are
hardly ever in the realm of ‘transition’, for that signals a discourse where the change in question
is assumed to have a known end point. Rather, we are almost always in the realm of ‘transform-
ation’, a term that implies an unknown end point (cf. Henderson 1998b, pp. 49).
Consistent with a discourse of transformation, it is possible to envision changes in the global
economic-political order that could lead to a number of possible outcomes. Whatever they might
be, it seems unlikely that one of them will be the affirmation of the unipolar, US-dominated order
that I refer to below as ‘neoliberal globalization’. The Russian government’s reassertion in the
Caucasus (August 2008) of its geopolitical interests vis-a
`
-vis the United States and NATO is
likely to symbolize the end of that particular possibility (Milne 2008). If it does, the outcome
of the change process is unlikely to be a bipolar world geopolitically, either, and certainly not
economically. There has been ‘too much history’ since the historical rupture of 1989 91 (the
implosion of European state socialism) not least with the rise of China to allow for that.
If a bipolar world is not a serious prospect, then a multipolar one may be.
3
This is a prospect
that has received significant scientific attention (see, for instance, Ikenberry 2005, Buzan 2008).
While the geographic specification of multipolarity tends to vary, depending on the analyst in
question, a ‘maximalist’ version of the concept might emphasize the emergence of a number
of world-regional, political-economic orders of which the United States and North America,
the European Union (EU) and the Mediterranean basin, India and South Asia, Russia and
Central Asia, China and East Asia, and Brazil and Latin America (all of them contested intern-
ally and among themselves in their respective ‘peripheries’: Sub-Saharan Africa, Central Asia,
Latin America, etc.) would be obvious possibilities.
Among these visions of our global future, this paper raises the prospect of an alternative
one: a GAE. While there is beginning to be a literature that points to such a possibility (e.g.,
Frank 1998, Mahbubani 2008), including from affiliates of the US Central Intelligence Agency
376 Jeffrey Henderson
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(NIC 2004), this paper attempts to be less categorical than the former certainly tend to be. It pre-
sents the GAE merely as a possible global future, but a possibility worthy of consideration and
debate.
The GAE hypothesis sketched here recognizes China as the initial driving force while
holding out the possibility that it may come to be co-driven by other Asian political econom-
ies: Japan and India in particular. Additionally, it is necessary to acknowledge that there are
many factors that could delay or even derail the emergence of a GAE, or at least prevent it
from becoming the relatively stable formation that the notion of an ‘era’ implies. The differ-
ing histories, natures and interests of the Asian political economies themselves and hence
their geopolitical relations are cases in point, as are the deep, mutual suspicions associated
with Sino-US relations. The fact that the Chinese economy appears to be 40% smaller in GDP
terms than originally thought,
4
in itself may mean that the GAE’s gestation period may be
longer than otherwise might have been the case. If we append to such uncertainties the
growing evidence that the Chinese economy itself may be heading for a massive over-
accumulation crisis
5
(i.e., a crisis in the ‘Western’ sense of the term) with the prospect of
serious knock-on effects for social and political stability (Henderson 2008, p. 16, Hung
2008), then, clearly, it may be some time before we are in a position to judge the validity
of the GAE hypothesis. In the meantime, however, we are able to begin to evaluate its plausi-
bility. It is to that task that I now turn.
Globalization today
In order to assess the nature and dynamics of a potential GAE, we need first to characterize the
current phase of globalization, a phase that has been both a cornerstone of China’s economic
success and one from which any future GAE is likely to emerge.
The current phase of globalization is conventionally charted from the early 1970s, though as
the work of Hirst and Thompson (1999) and Held et al. (1999), among others, can be taken to
imply, this ‘starting date’ has been more a product of business school and media ‘hype’ than it
has of historical reality. Rather, the contemporary phase of globalization can be seen as being
characterized by a deepening and geographic dispersal of a number of dynamics that emerged
at various times in the post-World War II period. Four of these seem to have been particularly
important.
.
The electronics and information and computing technology (ICT) revolutions that fol-
lowed the invention of the modern computer and the emergence of semiconductor technol-
ogy in the late 1940s have subsequently transformed economic transactions, politics, work
and everyday life through the global expansion of cyber-networks (a dynamic captured
best in Castells’ trilogy: Castells 200003).
.
The grafting of a conservative ideological project onto neoclassical economic theory,
which began with the Mont Pelerin Society in the late 1940s, led to the rise and expansion
of neoliberalism as a relatively coherent set of economic, political and social practices
and as the principal ideological ‘glue’ of contemporary globalization (Harvey 2005,
Henderson in press).
.
From the early 1980s, as an adjunct of the neoliberal project, there has emerged a new
regime of accumulation ‘financialization’ associated with the progressive subjection
of all other forms of capital to the particular interests and rhythms of finance capital (Boyer
2000, Glyn 2006).
.
Consistent with the rise of neoliberalism and particularly since the historical rupture in
Eastern Europe of 1989 91, the United States has emerged not only as the dominant
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military power, but as a global power whose foreign policy has been progressively mili-
tarized (Harvey 2003, Johnson 2004).
As for much of the period since the end of World War I, the United States has been confirmed as
the dominant political economy during the current what we can now term ‘neoliberal’ phase
of globalization (mid-1970s onwards). While this dominance has always been contested by
other states, ideologies and by social movements it has been successfully reproduced over
time not merely because of the United States’ military power, but also because the United
States has been the principal source, and the principal commercial and political exploiter, of
many of the innovations associated with the first three of these dynamics. Underlying this
dominance, however, are deep structural weaknesses in the US economy (Brenner 2003,
2005), such that the consequence of these dynamics is that the world economy and its geopolitics
have become increasingly unstable.
Transitional dynamics
China’s rise from the mid-1980s would have been inconceivable without at least two historical
processes having become entrenched in the preceding period. The first of these was the 1949
revolution and the subsequent social project associated with Maoism. While acknowledging the
disasters of the Great Leap Forward and the Cultural Revolution, it is easy to forget that without
the Maoist version of state socialism, China would not have emerged by the 1980s with a
largely literate and healthy population and one whose considerable population size was under
control. The stark contrast with its closest comparator, India, in the same time frame as well as
today, underlines the substantially positive developmental legacies of the Maoist social project.
6
The second historical process central to China’s rise and the one to which I alluded in the
previous section was the significance of neoliberal globalization. The beginning of China’s
economic reform process coincided with the ‘first-wave’ international extension of the neolib-
eral economic project. This was not simply a matter of China benefiting from increased
foreign direct investment (FDI) flows, for that had been true for other parts of East Asia since
the mid-1960s, and, in any case, most of the initial flows into China came from ‘Overseas
Chinese’ territories such as Hong Kong and Taiwan (Henderson 1991, p. 175). Probably of
more importance was the progressive freeing of trade in manufactured commodities (under
the auspices of the GATT and, subsequently, the World Trade Organization (WTO)) from
which China was uniquely placed to benefit coupled with the abandonment, by the 1980s,
of state concerns in the neoliberal heartlands (particularly Britain and the United States) to main-
tain vibrant, internationally competitive manufacturing industries of their own. More recently,
with the financialization of the world economy and the reduction in national controls associ-
ated with that process state-owned Chinese ‘sovereign equity’ funds have been allowed to
make inroads into some of the core companies of global finance capital.
7
Notwithstanding the neoliberal resonances in China’s own development project (explored,
for instance, in Harvey 2005, Ch. 5), there are strong reasons to believe that any transition
from the current phase of globalization to a GAE is likely to be highly contentious. Among
the reasons for this are those discussed in the following sections.
China is a dramatically different socio-political formation from the United States and other
countries that dominate contemporary globalization
With few signs, as yet, that the Communist Party’s hold on power is weakening, China remains a
neo-Stalinist state. As a consequence, the party formally absorbs the state apparatuses, the state
is fundamentally authoritarian and repressive, and, though change is afoot, China lacks a vibrant
378 Jeffrey Henderson
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civil society that could act to moderate its authoritarianism (Nolan 2004a, Pei 2006). Although
Britain, the United States and other major global players were nowhere near as democratic as
early, or as deeply, as their national mythologies suggest (Chang 2002, Ch. 3), and from the
Peterloo massacre of 1819
8
through the ‘labour wars’ of the late nineteenth and early twentieth
centuries, to the McCarthyite ‘witch-hunts’ of the 1950s, their governments could certainly be
repressive, the repression there was never as systematic or as prolonged as it has been in China.
9
In a nutshell, as Hutton (2007) has argued, China does not subscribe to ‘Enlightenment’ values.
While, again, the extent to which Britain and the United States have themselves subscribed to
Enlightenment values has been uneven and patchy, depending on political expediency and pre-
vailing perceptions of the ‘national interest’,
10
the key difference relative to historic (since the
revolution of 1911) and contemporary China is again the dramatic differences in the develop-
ment of their respective civil societies and thus in their relative capacities for the mobilization
of political opposition in support of Enlightenment values.
To the peoples of the currently dominant countries (and the ‘Occident’ more generally),
China represents the ‘Great Other’
11
In 1511, when the first modern maritime colonial power, Portugal, made contact with Chinese mer-
chant ships (in Melaka, now part of Malaysia), China was at the zenith of its power as the regional
hegemon in East Asia. While it was to slide gradually into economic and geopolitical decline over
the following four centuries or so, China began to be perceived by Europeans and, subsequently,
Americans and other peoples of European origin, as the ‘Great Other’ (Jullien 1999, Zhao 2007).
While part of this perception was undoubtedly positive, in terms of an appreciation among
the middle and upper classes of the aesthetic representations of Chinese culture and of the early
Chinese advances in science and technology, elements of it were profoundly negative. China
came to be perceived as the polar opposite of European cultures. The size, wealth and cultural
sophistication of China, coupled with the fact that it had been controlled by a unified state since
the third century
BC, began to transmute, by the late nineteenth century, into a sense of China as
a potential ‘civilizational’ threat. With the triumph of the People’s Liberation Army (PLA) in the
civil war of the 1930s and 1940s and the founding of the ‘Communist’ state in 1949, China
began to be perceived particularly in the United States as not merely the cultural Great
Other, but, ideologically, as profoundly alien, a perception that was probably compounded when
US troops were confronted by the PLA during the Korean War (cf. Cumings 1997, Ch. 5). US
and European racism, of course, was a central component of this perception.
While Japan, at least since the mid-nineteenth century, was also viewed culturally in Euro-
pean societies and the United States in similar ways to China, with the exception of the 1930s
through to 1945, it was never perceived as an ideological and military threat. On the contrary,
with the exception of that period, from the Meiji Restoration (1867) through to the present,
the Japanese state has specifically linked its political fortunes (arguably in a subservient
form) to those of the prevailing dominant power: Britain through to World War I and
subsequently the United States (Murphy 2006).
With the size of the temporary and permanent migrations from China that have been associ-
ated with recent globalization and the ‘ideological/spiritual pollution’ that has been a result of
the absorption of China into the global economy and, particularly, its cyber-networks and cul-
tural forms, it is possible that the negative perceptions in the Occident of China and in China
of the Occident (on the latter, see Dikotter 1992) are being moderated. Whether that moderation
has penetrated the power centres of the global political economy, including those of China itself,
not to mention the vast majority of their respective populations, however, must remain a question
for history.
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The geopolitical context within which China is the principal ‘rising power’ is arguably
more fragile than at any time since World War II
If the leading analyst of the relation of war to the economic decline of the ‘great powers’, Paul
Kennedy (1989), and the world’s greatest living historian, Eric Hobsbawm (1994), are in pessi-
mistic agreement that we live in perilous times, then we all need to take note. In both their
cases, as in the work of many ‘global historians’, there is a sense that the contemporary period
is remarkably reminiscent, in terms of economic instability and interstate rivalry, of the decade
or two preceding World War I. As I have indicated above, there is a sense that the US
economy, in its structural fabric, is beginning to come apart. We must add to this the facts that
finance capital, with all its inherent instabilities, has been ‘unleashed’ internationally (Glyn
2006) contributing to potentially serious recessions in the United States, Britain and elsewhere
the United States and some of its allies are militarily overstretched, Russia and Japan seem to be
on the verge of remilitarization,
12
poverty in the developing world (with the significant exception
of China), continues to increase (Davis 2006), and global warming threatens to deliver devastating
climatic shifts. Into this maelstrom, China is now beginning to step. It thus seems axiomatic that
China is re-entering the global political economy at a moment when geopolitical relations are
more fragile than at any time since World War II, and thus probably in recorded history.
Globalization tomorrow?
We are now in a position to sketch some of the key elements that could influence the nature of a
future GAE. As with the current phase of globalization, the nature of a GAE will probably be
associated with the ‘peculiarities’ of China’s political economy and social formation, its
history, and its current condition. Arising from these, two elements could be decisive.
The sources of China’s competitive dynamic
There are at least two factors that are important here: that China has a ‘giant’ economy and that
its economy is constituted as an unusual form of capitalism.
The ‘big country’ effect
While its various indices of economic growth are not dissimilar to those of Japan, South Korea or
Taiwan in earlier periods (Winters and Yusuf 2007, Figure 1.1, p. 9), with a population of over
1.3 billion, a low-wage labour force matched historically in size only by contemporary India, and
increasing skill and innovative potential in abundance, the difference between China and the
other East Asian late industrializers (or, indeed, any other country that has industrialized) is
the sheer scale at which these economic and social dynamics are being brought into play. The
following data will serve to underline this comment.
In terms of shares in the growth of world exports, for instance, whereas China was second to
the United States between 1995 and 2004, with 8.9% relative to the latter’s 10.7% of the total, its
share in the growth of world exports between 2005 and 2020 is projected to be 15.4% compared
with the United States’ 9.9% (and Japan’s 6.3% and Germany’s 3.8%) of the total (Winter and
Yusuf 2007, Table 1.3, p. 15). With regard to the structure of exports, China is now the world’s
largest producer of electronic and ICT products (Winter and Yusuf 2007, p. 42), and in terms
of higher skill- and technology-intensive products, China’s performance is beginning to approxi-
mate that of South Korea (extrapolated from Winter and Yusuf 2007, Figure 2.1, p. 40). This
capacity to move into higher valued-added, more technology-intensive products at a far
earlier stage in the industrialization process than other late industrializers is underpinned
380 Jeffrey Henderson
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by a dramatic expansion in the graduate labour force, with 600,000 people now graduating
in engineering annually (McGregor 2006). Add to this a competitive position in innovative
technologies that one would not expect to find in a developing country at this stage in its
development such as nanotechnology, where around 1,200 scientists at the Chinese Academy
of Sciences alone, are acting as principal researchers (Appelbaum et al. 2006; see also Appelbaum
and Parker 2007) – and we can see the reasons for the World Bank’s conclusion in its recent report
on China and India that ‘even though China is not the dominant force in the world economy, the
shock it is administering to the world is unprecedented’ (Winter and Yusuf 2007, p. 11).
Form of capitalism
Far from being a monadic economic system, capitalism is extraordinarily diverse in its organiz-
ational composition, statebusiness relations, managerial priorities, etc. (from a vast literature,
see, for instance, Lazonick 1991, Henderson 1998b, Whitley 1999, Coates 2000, Hall and
Soskice 2001, Lane and Myant 2006). One of the implications of this reality, as Chang (2007)
has stressed for the developing world, is that far from there being one ‘royal road’ to development,
as neoliberalism in its various guises would have us believe, there is a multiplicity of potentially
successful routes to high-performing economies capable of delivering generalized prosperity.
China’s form of capitalism may well be one of these. If it is, and if China becomes a dominant
economy, then it will be a very odd form of capitalism to have constituted the core of a new
phase of globalization.
While Chinese capitalism is a complex, hybrid, phenomenon (see, for instance, Nolan 2004b,
Nee and Opper 2007), sharing some similarities with the ‘state-orchestrated’ capitalisms of
Japan, Taiwan and, particularly, South Korea, it is unique in two ways. Firstly, it is the only sig-
nificant globalizing form of capitalism to have at its core a neo-Stalinist state that continues to
pay lip service to, if not respect, some of the principles of socialism.
Relatedly, it is the only political economy where state-owned companies are at the cutting
edge of globalization. As a consequence, it is reasonable to assume that the managerial priorities,
time horizons for returns on investment, etc., of such enterprises are not only very different from
US, European, Japanese or South Korean firms, as Nolan’s (2001, 2004b, Ch. 2) work implies, but
also that their primary concerns are not merely about profits (though they are about that), but also
with China’s national development strategy. If the considerations behind particular investments in
particular places are not just commercial, but are driven by the Chinese state’s strategic interests,
then almost by definition, the logic of globalization during a GAE, and its consequences for
countries absorbed into it, could be dramatically different from earlier phases of globalization.
China’s unusual nationalism
China is the first potentially dominant economic-political power, other than the United States, to
have been subject to colonization and, relatedly and importantly, the first to be populated by non-
white peoples. The legacies of colonialism, and perhaps issues of race, are consequently likely to
influence China’s bilateral and multilateral relations, certainly with the United States, the Euro-
pean powers and Japan, and in different ways with the developing world. Central to the issue
(and unlike many other nationalisms) seems to be a sense of historical grievance associated with
a perceived ‘100 years of humiliation’. From 1842 (the end of the first ‘opium war’ with Britain)
to 1949 (the socialist revolution), China was subject to imperialist incursions by the United
States; by Britain, France, Germany, Italy and other European powers; and, particularly, by
Japan (‘particularly’, because it involved military invasion and extreme brutality) that seem
to have left deep scars on the national psyche (Chang 2001, Gries 2005).
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With the decline of Maoism as the ideological ‘glue’ of Chinese society, the key legitimation
for the continued rule by the Communist Party has become its ability to deliver sustained econ-
omic growth, coupled, as the occasion arises, with its determination to right the perceived his-
toric wrongs perpetrated against China by foreign powers. In that the latter seems to be
increasingly associated with a concern to reassert its supposed ‘rightful’ place in the global econ-
omic and political order, Chang’s (2001, p. 175) assessment, that one of Deng Xiaoping’s key
contributions to China’s development was to transform Maoism into a developmental nationalist
ideology, seems valid.
Chinese nationalism has often been seen as a ‘top-down’ affair, essentially a propaganda strat-
egy designed to legitimate Party rule in the face of the deepening contradictions and rising conflicts
associated with capitalism and increasing corruption (see Shirk 2007, pp. 69). Recent events,
however, such as the US bombing of the Chinese embassy in Belgrade in 1999, the mobilizations
against Japan’s refusal to apologize for its suppression of China in the 1930s and 1940s, and the
‘anti-Western’ response to international protests (focused on the Olympic torch) about the 2008
crackdown in Tibet, arguably point to the emergence of a grass-roots, ‘popular nationalism
(Gries 2005, Ch. 7, Anderlini 2008). Domestic responses to the success of Chinese athletes in the
2008 Olympic Games, where the celebration of individual endeavour seems to have been subordi-
nated to the greater glory of the state, may be further evidence of the rise of popular nationalism.
Whatever the sources of China’s ‘new’ nationalism, however, it seems to be infused with a
deep sense of victimization, and if Chang (2001) and Gries (2005) are correct, this has contributed
to a mass psychology of insecurity. Given that China has territorial ambitions in East Asia
(Taiwan most obviously, but also control over the potentially oil- and gas-rich Paracel and
Spratley islands in the South China Sea, islands also claimed by Vietnam, Malaysia and The
Philippines) and that its self-perception seems to be as much a product of ‘cultural ethnocentrism’
(Taylor 2006 and more directly mobilizing discourses on race Dikotter 1992) as that of the
United States and its allies, it seems likely that a GAE could be marked by less than pragmatic
responses, both on China’s part and on the parts of its potential adversaries, to some of the
geopolitical tensions that will inevitably arise.
China and the crisis of global development
As a consequence of the dynamics sketched above, China’s global economic and political foot-
prints are likely to be markedly different from those associated with previous global powers.
With the emergence of a GAE, therefore, we could expect an economic and political world
order markedly different from that established under US/British/European dominance. For
instance, with a GAE, we might expect less emphasis on the ideal of democratic governance
systems, or on human rights and humanitarian issues (even rhetorically). Also and this
could be positive for the developing world the ‘demonstration effect’ of China’s development
may encourage others to further question neoliberal policy agendas. In order to explore some of
these questions in a little more detail, I turn to a discussion of some of the vectors of development
that could be associated with a future GAE. Following the logic of the Chinese meaning of crisis
as a dialectic of danger and opportunity the next section proceeds with an examination of the
crisis tendencies that seem to be emerging along a number of those vectors.
Vectors and their crises
There are a number vectors that warrant attention, but given space constraints, I can deal only
with three of these here, and in a schematic way at that. While this section does not tackle
the potentially vital questions of the environmental impacts of a GAE, the nature of its financial
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regime, issues of global governance, or the geopolitical implications of a GAE’s emergence, it
does attend to questions of trade, aid and human rights, and energy security. Even in themselves,
however, these three vectors, taken both separately and collectively, are clearly ones on
which much of the future of the developing world will depend, and with regard to energy
security, in particular, they are vectors around which geopolitical tensions are already
reverberating.
Trade
Imports. The sheer scale of the dramatic and sustained growth of the Chinese economy has mas-
sively expanded China’s dependence on the import of primary commodities from elsewhere in
the developing world. Thus, with the continuing reduction in agricultural land (consequent on
urbanization) and the flow of peasants into the cities (as result of the rising demand for industrial
workers on the one hand and rural poverty on the other), agricultural productivity in China has
stagnated. As a result, the country has become increasingly dependent on the import of food and
other agricultural commodities. Thus, by 2004, China’s trade deficit in foodstuffs amounted to
US$3.7bn (Kaplinsky 2005, p. 206). While much of this in grain, for instance was composed
of imports from the developed world (and the United States in particular), some of the shortfall
has been sourced from the developing world. Well-known examples include the import of soya
and oilseed from Brazil and Argentina. Thus, for instance, China’s share of Brazil’s total oilseed
exports rose from 20% in 2001 to 30% in 2004 (Gottschalk and Prates 2005).
Similarly, China’s increasing demand for metals to feed its industrial revolution has impacted on
developing world exports. Thus, increasing proportions of Zambia’s copper exports are heading for
China, as are the Congo’s exports of cobalt and copper, Zimbabwe’s exports of cobalt, and Ghana’s
exports of aluminium (bauxite). China’s share of Chile and Peru’s exports of copper, for instance,
had increased, respectively, from 9% and 8% of the total in 2001 to 17% and 19% by 2004
(Gottschalk and Prates 2005). Although most of these metal exports continue to be in the form of
ores rather than the higher-value-added processed metals, the rising prices that they have helped
induce are still, in principle, beneficial to the economic welfare of the countries concerned. The
fact that many of these benefits may not be reaching the workers in these industries, nor the bulk
of the populations of the countries concerned, is not directly a product of an emerging GAE, but
rather of the inequalities of wealth and power evident in those countries themselves.
There is, however, at least one primary commodity where China’s import demands is having a
detrimental effect. With its burgeoning furniture and pulp industries, China is now one of the
world’s largest importers of timber. Unfortunately, in the process, it has become the world’s
largest importer of illegally logged timber, particularly from the rain forests of Burma, Malaysia,
Thailand, Indonesia and Papua New Guinea (Rapa 2007). As a consequence, some of China’s
demand for timber is having adverse environmental implications and at the same time is
having few positive welfare implications for the countries concerned (in terms of poverty
reduction, for instance).
With regard to China’s rising demand for manufactured commodities, the picture, for the
moment, is more clearly positive than mixed. Given the nature of China’s industrial economy
with its predominant emphasis on textiles and garments, electronics, and engineered metal pro-
ducts (such as cars) the principal regional source of manufactured imports from the developing
world is the industrializing (and recently industrialized) countries elsewhere in East Asia. Thus,
with regard to textiles – though definitely not garments (see below) – there is evidence that China
has been increasing its imports from other parts of East Asia and from South Asia (e.g., Lau 2007).
With regard to electronic products, most of China’s component imports have come from South
Korea, Taiwan, Singapore, Malaysia and Thailand (and, of course, from Japan, which, by
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definition, does not figure in the current analysis). So far, this dynamic has had a positive impact in
terms of employment, wages and other economic benefits for the countries concerned. What is
unclear, however, is how long such import demands will continue. With the reconfiguration of
electronics production networks in East Asia, consequent on rising skills but lower production
costs in China, investment strategies of transnational corporations, and rising costs elsewhere
in the region, it seems likely that some component production (at least for those that embody
medium-level technologies, such as hard drives and other computer peripherals) is likely to
shift to China itself. Evidence of this is beginning to emerge, for instance, from Malaysia and
Thailand (see Henderson and Phillips 2007, Phillips and Henderson 2008, Yusuf 2008).
Exports. If the implications for the developing world of China’s demand for imports is mixed
(with both dangers and opportunities involved), the consequences of the fact that it is a manu-
facturing and exporting powerhouse seem more clear-cut.
China’s capacity in labour-intensive manufactured exports seems to be helping to drive a
‘race to the bottom’ in parts of the developing world. With regard to textiles, a recent World
Bank study (Winters and Yusuf 2007, pp. 89 92) reports that while exports to China have
thus far benefited East Asian producers, the situation is likely to have reversed by 2020, with
Indonesia and Vietnam, for instance, suffering contractions in their respective industries of
around 9%. The study’s projections suggest that garment industries will be hit more heavily
with declines of around 19% in Vietnam and North Africa (principally Egypt), for instance.
Other research reports the consequences of China’s exports to the United States, EU, etc., for
garment industries elsewhere in the developing world. Subsequent to the end of the Multi-
Fibre Agreement, Lesoto’s garment industry has all but been wiped out, while South Africa’s
supply of garments to its domestic market has declined from 80% to about 25% (Kaplinsky
and Morris 2008). Furthermore, recent estimates suggest that, in 200305, 130,000 workers
were laid off in Sri Lanka’s garment industry as a direct result of Chinese competition in
third markets (Perera 2006).
With further regard to Chinese competition in exports to third markets (e.g., the United States)
including in higher-technology products such as electronics and car components much recent
research on Latin America has been equivocal about the extent to which China poses a threat to its
indigenous or foreign-owned manufacturing industries, in spite of evidence in the media that
Mexican-based producers, for instance, have been badly damaged, with growing unemployment
in the maquiladoras bordering the United States. The work of Jenkins and his colleagues (2008),
however, is more consistent with media concerns. They show that with regard to Latin American
manufactured exports to the United States, Chinese competition is likely to have more serious
consequences than has been recognized in the scholarly literature. With regard to East Asian
manufacturing industries, work by Lall and Albaladejo (2004) suggests that low- and medium-
technology industries there are seriously at risk from Chinese competition. This includes not
only recently industrialized countries, such as Malaysia (Henderson and Phillips 2007, Yusuf
2008), but also more mature industrial economies such as South Korea.
Aid and human rights
China’s foreign aid derives largely from four central government and a variety of provincial gov-
ernment agencies. The former consist of the Ministry of Commerce, the China Export-Import
Bank (Exim), the China Development Bank, and a variety of less significant actors (which
can be grouped as the fourth agent), such as the ministries of health, education, etc. Of
these the Ministry of Commerce (which contains the Department of Foreign Aid) and the
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Export-Import Bank are currently the most important, though the Development Bank is reputed
to have substantial reserves. In 2005, Exim alone had a larger investment portfolio in Africa
US$15bn than any of its equivalents from the United States, Japan or Britain (Alden 2007,
p. 24). The latter have also become significant actors in their own right, with the governments
of Anhui and Sichuan, for instance via their state-owned construction firms having direct
links with particular provincial governments in Angola, and Sichuan is currently cooperating
with the government of Ogun State, Nigeria, to build a US$50m pharmaceutical plant (Alden
2007, p. 29).
With this multiplicity of funding sources and the diverse (indeed, given provincial involve-
ment, competing) interests associated with them, it is probably a misreading of the situation to
assume that there is a unified ‘strategy’ when it comes to China’s aid programme. That question
notwithstanding, there seem to be at least two issues worthy of comment here: the consequences
of China’s aid regime and the potential human rights issues as Chinese firms begin to expand
their investment in other parts of the developing world.
Given its historic (official) commitment to non-interference in the internal affairs of other
countries (Taylor 2006), it is, perhaps, unsurprising that China’s overseas aid programme is effec-
tively circumventing the political conditionalities now associated with ‘Western’ aid, whether the
latter comes from international or national agencies. Judged against the dubious lending standards
of the World Bank or particularly USAID in earlier periods, for instance, China’s current aid
programme (which, among others, includes grants and loans to countries with dubious human
rights records such as Burma, Turkmenistan, Uzbekistan and Sudan) seems relatively unproble-
matic. If there is a problem, however, it is that international lending standards (at least formally, if
not informally) have moved on. Thus, while Chinese loans and other forms of assistance provide a
politically easy route to development finance for cash-strapped regimes, they release those
regimes (some of them highly corrupt and, indeed, predatory on their populations) from the press-
ures they might otherwise be under to drive through political reform. Unlike their international
counterparts, it is a matter of course, for instance, for Chinese aid agencies to refuse to engage
with non-governmental organizations (NGOs) concerned with the human rights and governance
implications of their policies and to take one Chinese example the China Export-Import
Bank consistently fails to conduct environmental and social impact analyses (now routine for
international aid agencies) prior to investing in given projects (Alden 2007, Ch. 1). One
example of recent Chinese loan activity will suffice to underline the general problem.
China, as with USAID, and many other national aid programmes, lends money predominantly
in accord with its commercial and strategic interests. For instance, given its involvement in
Angola’s oil industry (referred to below), it is not a surprise that the Angolan regime has been a
recipient of China’s largesse. Angola, however, is a country where around 25% of state revenues
‘disappear’ year on year, and one that has a president who is believed to be implicated in these
‘disappearances’. In 2005, China’s Exim Bank delivered US$2bn in aid to the Angolan regime.
Whereas much of this has been invested in much-needed transport and infrastructure, the govern-
ment partner in receipt of aid was the president’s office, not the relevant ministries, as is usually the
case, raising questions as to what proportion of the loan in fact ended-up in productive investment.
While China’s foreign aid programme seems to herald both dangers and opportunities for
recipient countries, a recent series of agreements with the Congo may be destined to put
Chinese aid to the developing world on a different plane. In September 2007, the China Exim
Bank agreed to provide US$8.5bn to support infrastructure development in the Congo, a
country that is home to 10% of the world’s copper reserves and over 30% of the world’s
cobalt. In early 2008, China provided a further US$5bn in development loans to the Congo.
These latter funds are destined to support the provision of hospitals, schools and two universities.
Additionally, Socomin, the Chinese-Congolese joint venture company that will mine the metals,
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will be required to commit 0.5% of all investment on training the workforce and on technology
transfer, while 3% will be spent on social provision for the local community. Furthermore,
Socomin is specifically required to subcontract 12% of its work to Congolese companies and
limit its Chinese workforce (an increasing bone of contention in Africa; see below) to 20% of
the total (Komesaroff 2008).
While China is set to make US$14 40bn (the estimates vary) from its copper and cobalt
mines, confirming that this is far from an arrangement driven by altruism, these agreements
between the Chinese partners and the Congo government are unprecedented in the history of
foreign aid to the developing world. Already the Congo government has begun to renegotiate
its agreements with European and US mining companies, using the Chinese arrangement as a
benchmark. Consequently this development seems potentially to be highly positive for the
Congo. Should it become a model for aid and investment activity elsewhere in Africa, it
could help to revolutionize the principles on which international aid, in general, is provided.
Set alongside such positive developments, there is beginning to be concern about the types of
labour processes and working conditions that are likely to result from Chinese FDI or, indeed,
Chinese outsourcing in the developing world. It is in some African countries that these problems
are likely to be experienced initially, as Chinese firms are now the leading foreign players in the
development of transport infrastructure there and are increasingly prominent in telecommunica-
tions, mining, logging and, of course, energy extraction. Alden (2007, p. 14), for instance,
reports that more than 800 Chinese companies are now operating in 49 African countries, with
480 of these involved in joint ventures with African firms. While these investments are undoubtedly
positive in terms of economic development, their implications for social development are less clear.
Notwithstanding the fact that many of these companies generally prefer to bring (indentured)
Chinese workers with them thus leaving local Africans unemployed it is likely that working
for such companies leaves much to be desired. While the working conditions in the subcontracted
plants of the US and European companies that drive, for instance, many of the garment and footwear
production networks in the developing world remain highly problematic (among a vast academic
and popular literature underlining the problems, see McVeigh 2007), this should not absolve the
activities of Chinese firms. While there is little evidence available from the developing world on
which to base robust conclusions about working conditions in Chinese-invested operations, the
treatment of rural migrants in Chinese industrial cities, such as Dongguan and Guangzhou (who
suffer working and living conditions that would have been familiar to Engels in 1840s Manche-
ster),
13
and across the country’s urban-industrial landscape, does not augur well for the treatment
of workers in, say, Pakistan or Nigeria, Indonesia or South Africa, where China’s ‘cultural ethno-
centrism’ is likely to further influence management attitudes to the workforce.
Energy security
Of all of the vectors discussed in this paper, it is China’s search for energy security that is probably
attracting the most attention, if not from researchers, then certainly from those concerned with
international security policy. Among the countries where China already has exploration and/or
supply contacts are, for oil, Kazakhstan, Iran, Saudi Arabia, Qatar, Sudan, Nigeria, Angola and
Venezuela; and, for gas, Turkmenistan, Burma, Bolivia and Algeria (Boekestein and Henderson
2005). While, in principle, Chinese demand is likely to bring economic benefits and thus
considerable opportunities to such resource-rich countries, in practice, that is only true
where the revenues are redistributed and/or invested in productive projects (only in Venezuela
are revenues currently redistributed). Beyond the question of the economic and broader
welfare benefits that may be derived from China’s search for secure supplies of oil and gas,
at least two other issues arise that are politicizing developments along this vector.
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The first of these concerns China’s bilateral relations with some very dubious regimes. In
2003, for instance, 41% of Sudan’s exports and 23% of Angola’s went to China (Jenkins and
Edwards 2006, Table 1, p. 25). In both cases, these exports were almost totally made up of
oil shipments. Like the Sudan, Angola is also an example of a country with an authoritarian,
corrupt, predatory regime. Unfortunately the majority of oil-rich countries have regimes that
are variations on this theme, so China cannot be faulted with allowing its (state-owned) oil com-
panies to do business with them, just as there has been no attempt, by US and European govern-
ments, for instance, to constrain the activities of many of ‘their’ oil companies in countries where
the respect for human rights verges on the non-existent.
In spite of the ether of hypocrisy surrounding pronouncements by politicians and the media
in the United States and the EU on China’s role in some oil-rich countries, the charge that does
seem to stick against the Chinese government is the nature of its relations with Sudan. Given the
Sudanese government’s complicity in the genocide taking place in the Dafur region and its
export dependence on China, as indicated above, China, in principle, must have significant lever-
age over the regime in Khartoum, particularly given the inability of the regime to sell its oil (at
least legally) to other major consumers.
14
That this leverage has just begun to be exercised seems
to be indicative of two things.
15
While the lack of respect for human rights in China is now a
matter of (a very long) record, given the fact that since 1949 this has rarely involved the suppres-
sion of its own minorities (though there remains the issue of Tibet), reluctance to lever the Sudan
regime is unlikely to be a product of the fact that the Chinese government is oblivious to human
rights issues. For the moment, it is more likely to be a consequence of China’s traditional bilat-
eral relations with African countries, which, going back to the 1950s, have emphasized (at least
officially) non-interference in the internal operations of other states (Taylor 2006). Secondly, the
relative absence of popular concern in China with the human rights implications of China’s
external operations (the significant exception to this general rule is Hong Kong) is, once
again, a reflection of a tightly controlled media (with the absence of a tradition of investigative
journalism
16
) and the underdevelopment of an autonomous civil society.
The second question concerns the interface between China’s search for oil and gas security
and the geopolitical ramifications of this. Among an array of issues that could be picked up here,
only two will be touched upon: the Shanghai Cooperation Organization (SCO) and the ‘string of
pearls’.
Founded in 2001, on the basis of a Chinese initiative, the SCO now includes in addition to
China Russia, Kazakhstan, Tajikistan, Uzbekistan and Kyrgyzstan as full members, while
India, Pakistan, Iran and Mongolia have observer status. Pakistan and Iran are currently
seeking to become full members. While Chinese motives in the SCO are many and diverse, it
is likely that the principal reason for the Chinese initiative was its concern to wean the
central Asian states from their economic and political reliance on Russia. Beyond that, the devel-
opment of stable political relations with the potentially major oil and gas suppliers in the region
has been high on the list (Boekestein and Henderson 2005). Although the physical logistics of
supply from the various former Soviet republics is potentially problematic (though, for instance,
China is currently constructing a pipeline to supply gas from a non-SCO member, Turkmeni-
stan), inter-governmental relations via SCO should help to secure supplies should problems
arise in the ‘bottlenecks’ of China’s oil supply lines from the Persian Gulf: the Straits of
Hormuz and Melaka. More recently, SCO members have begun to conduct joint military exer-
cises, and this has prompted speculation that SCO could develop into a military alliance similar
to NATO (Alexandroni 2007).
Consistent with my earlier point about physical ‘bottlenecks’ turning into geopolitical ones,
China seems to be engaged on a number of initiatives in the Indian Ocean, which, at least in part,
could constitute the early stages of a strategy to protect its oil supply lines from the Middle East
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and Africa. Currently composed of various initiatives to construct port and other logistical facili-
ties in Burma and Pakistan, this ‘string of pearls’ is beginning to prompt speculation that these
could, should security circumstances in the region require it, form the basis of Chinese naval
bases in South-East and South Asia. Of these, the Chinese construction of port facilities at
Gwadar in Pakistan close to the Iranian border and an oil terminal at Kyauk Phyu in
Burma, is, for obvious reasons, becoming a source of particular interest, not least for the US mili-
tary (see Niazi 2005, Pehrson 2006). With oil and gas pipelines under construction from Kyauk
Phyu to the Chinese city of Kunming and a pipeline mooted from Iran to Gwadar, the infrastruc-
ture necessary for avoiding military blockages of Chinese oil shipments through the Straits of
Hormuz and Melaka seems to be well advanced.
Conclusion
I have briefly identified a series of ‘crisis’ dynamics that could well arise along three vectors
associated with a possible future GAE. Consistent with the Chinese ‘reading’ of crisis employed
here, it seems clear that should a GAE emerge, it is likely to carry both dangers and opportunities
for economic, social and political development in various developing countries. This is con-
firmed by other work, for instance, on the role of China in the WTO and other institutions of
global governance (e.g., Bergsten 2008, Gu et al. 2008). A key methodological (also political
and policy) point arising from this part of the paper is that rather than ‘read off’ the likely con-
sequences of a future GAE on the basis of our assumptions, hunches or prejudices, we need to be
guided, on a case-by-case basis, by the empirical realities that an emergent GAE may be gener-
ating. These realities are diverse and this needs to be appreciated. Only subsequently will we be
able to develop the sort of aggregated picture that will be necessary to confirm whether or not the
trajectories of transformation are pointing towards a new, China-Asia-dominated phase of
globalization, and only then in relation to its longer-term consequences will some sort of
theoretical closure begin to be possible.
Whatever view is taken of the possible global implications of the rise of China, it seems clear
that we are on the verge of a new episode in global history one that indeed may see, as Frank
(1998) and others suggest, the return of China to an historically central role in the global political
economy. If so, then it may simply hasten the emergence of a multipolar global order, as many
argue. It may release, however, another scenario one where the global political economy is
gradually absorbed into, and reconstructed by a new, China-Asian-driven, phase of globaliza-
tion. Whatever else this may mean, if this new phase does emerge, it seems clear that it will
be dramatically different from what has gone before and will have dramatically different
consequences for the developing and developed worlds alike.
Acknowledgements
This paper draws on work undertaken in collaboration with Khalid Nadvi and Nicola Phillips
(University of Manchester). It has also benefited from involvement with John Humphrey (Insti-
tute of Development Studies) and Raphael Kaplinsky (Open University) on the programme of
work on China, India and global development on which we are all engaged. I am most grateful
to these colleagues and friends for the direct and indirect contributions they have made to the
paper. None of them, however, is responsible for the interpretations and arguments developed
here. Outlines of the ideas embodied in this paper were delivered as lectures at the Universities
of Hong Kong, Bristol and Warsaw, while an earlier draft was presented to the 2nd World Inter-
national Studies Conference (Ljubljana, Slovenia, July 2008). I am grateful to the participants
at those various events for their comments, as I am to the journal’s anonymous referees.
388 Jeffrey Henderson
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Finally, I wish to thank the Leverhulme Trust for supporting the research (Grant F/00120/AZ) on
which this paper draws.
Notes
1. The consequences for the advanced industrial economies are currently the focus of most attention and
political-policy debate (see, for instance, Hutton 2007, Shirk 2007), but for the developing world, see
the special issues of the IDS Bulletin (37/1, 2006) and World Development (36/2, 2008).
2. As this paper focuses predominantly on some of the economic and political aspects of globalization and
the structures of power associated with them, I use the terms ‘globalization’ and ‘global economic-pol-
itical order’ interchangeably.
3. Richard Hass (2008) has even predicted a world order characterized by ‘nonpolarity’.
4. Calculations in 2007 by the Asian Development Bank (ADB), recently given the World Bank’s seal of
approval (Keidel 2007). The ADB calculations also reveal that the extent of grinding poverty in China
(those existing on less than US$1 a day) is, at 300 million people, three times higher than was thought.
5. And one in which real estate speculation could be central to the internal dynamics of the crisis, as it was
in some of the East Asian economies in the late 1990s (Henderson 1999).
6. For the record of China’s superior performance in health, vis-a
`
-vis India and most other developing
countries, see Reddy (2007). Since the marketization of China’s health-care system, this performance
has declined, but remains significantly better than that of India.
7. Taking equity stakes, for instance, in Barclays Bank (UK) and Merrill Lynch (US). Such developments
complement the Chinese government’s long-rumoured equity stake in the Hong Kong and Shanghai
Banking Corporation (HSBC).
8. Caused by a military attack on an unarmed crowd attending a pro-democracy rally in Manchester.
9. Political authoritarianism and repression in China predates the revolution of 1949, having been a
feature of ‘modern’ China since the republican revolution of 1911 (repression in Imperial China is
not relevant to this discussion). Taiwan is the only Chinese society ever to have evolved a democratic
polity based on liberal-representative principles.
10. In over a century replete with instances where Enlightenment values have been sidelined, witness, for
instance, the US overthrow of the nascent nationalist government in The Philippines in 1898 (Miller
1984), the bombing and gassing of civilians by the British in Mesopotamia (now Iraq) in the 1920s
(Glancey 2003), or the overthrow of democratically elected governments in Iran in 1953 by the
British and Americans (Halliday 1979) Guatemala in 1954 or Chile in 1973, the last two both
with the active assistance of the US government (Globalsecurity NDa, NDb).
11. I use the term ‘Occident’ in preference to the ideologically loaded, Cold War term, ‘the West’, with its
geographical and cultural confusions (are Japan and South Korea, for instance, part of ‘the West’?).
12. In May 2007, the Japanese government approved a referendum on whether the constitution should
be rewritten to remove the clause that currently limits military expenditure and participation to defen-
sive purposes only (Onishi 2007). Though participation in the various multilateral forces that are a
significant feature of contemporary global politics has been the immediate context for this develop-
ment, the principal reason seems undoubtedly to have been security concerns occasioned by the rise
of China.
13. Fieldwork notes, April 2005 and April 2006. For rich ethnographic detail of the problems confronting
female migrant workers, see Pun (2005).
14. Chinese oil companies are not the only ones dealing with Sudan. The state-owned Malaysian company,
Petronas, for instance, operates in the country.
15. That the Chinese government agreed in 2007 to send military personnel to Dafur, as part of a UN force,
was widely assumed, in the US and European media, to have been a decision driven by their desire to
avoid a boycott of the 2008 Olympic Games in Beijing.
16. This is not unique to China, but is a general problem with the media throughout East Asia. The prin-
cipal exception is The Philippines.
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