UNDP Report: Defining China's International Role

The United Nations Development Programme, in partnership with the CCIEE and the SIIS, published a report entitled, "Rebalancing Global Economic Governance – Opportunities for China and the G20 beyond 2015." The report highlights the importance of global governance and sustainable development to "add value to ongoing debates and inform the work of policy makers and practitioners in China as well as around the world."

What is China's Role in Global Development as a Developing Power that is Global in Nature? (Chapter 3)

3.3.1 Balance Between Expectations and Reality

China describes itself as "a developing power of global nature." This position has a pluralistic quality, signifying that China's role in global economic governance is likely to continue to be transitional and evolutionary.

In recent decades, Chinese representation in, as well as its contributions of capital and knowledge to, major global fora has markedly increased but is nevertheless limited compared to external expectations. The Chinese government has significantly increased its intergovernmental loans and other foreign aid, while also steadily offering knowledge and experience to international organizations.

It is also noteworthy that China's international financial contributions under the leadership of President Xi Jingping have changed. Besides the many bilateral agreements, China is in fact now creating and giving contributions to other regional and plurilateral funds.

Regional cooperation enhances financing and technology sharing among developing countries, and on the other it boosts China's outward FDI, especially in the manufacturing and infrastructure sectors, so that China's overcapacity problems are relieved and its industrial structure readjusts.

Contingent arrangements are also established to ensure regional financial safety as well as to improve the domestic financial market and development banks are being set up to boost infrastructure investment in surrounding developing countries.

However, China's economic restructuring is also having impact on geopolitics and international relations, particularly since the country is currently facing increasing competition from both the North and the South. Additionally, exporting labor-intensive products is still very competitive, which means that China is in direct competition with other developing countries.

One of the most significant problems that will face China as it moves towards a new stage of development will probably come from the delocalization or "going out" of Chinese industries in other countries, especially in Africa. How other developing countries absorb new comers, and how Chinese businesses respond, will define China's image abroad.

The Chinese government is simultaneously stressing the importance of North-South cooperation, while also advocating South-South cooperation. China often still regards itself as a developing country that supports the application of the CBDR, "Common but Differentiated Responsibilities", as the basic principle for global governance.

Moreover, the firm push on the quota reform of IFIs is not balanced by substantial new proposals on their modus operandi. Some LDCs remain concerned that a restructuring of global economic governance will be in favor of emerging economies at their costs. Therefore, together with more proactive, substantive engagement, China could increasingly show an inclusive approach and a consideration about different levels of participation.