Reexamining China and South-South Relations: Chinese State-Backed and Flexible Private Capitals in the Philippines

• In Event: 3442 - South-South Flows in Global Context

Abstract

China’s emergence initiates one of the most crucial debates in political economy and development studies in decades: is China pursuing a new form of neocolonialism, or strengthening South-South economic development? On one hand, numerous scholars have argued that China is simply supplanting Western states in the exploitation of the developing world and engaging in debt-for-equity swaps, and facilitating land grabs. On the other, some posit that China is engendering a newer and more egalitarian mode of development, providing financing for infrastructure and technology transfers for skills-upgrading.
Rather than put forward an exploitative or an egalitarian mode of development, I argue that China’s development trajectory led to a capital export regime, which is sending two types of capitals—state-backed and flexible private capital—to the Global South. First, state-backed capital enables the Global South to move away from the Western development model towards Chinese-funded infrastructure, allowing for the expedient construction of critical infrastructures, such as forward-backward linkages, mass transportation, and interconnective roads. In turn, state-backed infrastructure capital strengthens the host state so that they can make their own provinces and localities more legible for governance. State-backed capital simultaneously makes the host state legible for the Chinese state. Second, Chinese FDI as flexible private capital is moving into sectors that are unoccupied by FDI from other states. While flexible private capital may or may not benefit from state-directed subsidies, the accumulation-driven strategies of these companies differ and are autonomous from the party-state’s decisions and strategies. This capital generates economic growth for the country and increases the profit-margins of the group, but weakens state protection to the citizen, generating new venues to accumulate capital and ways of organizing production. This capital can Put another way, state-backed capital is strengthens while flexible capital weakens the host state.

Author

• Alvin Camba, Johns Hopkins University