Global China reading memo3

Builders from China: From Third-World
Solidarity to Globalised State Capitalism
Written On 1 December 2021. Posted In Article, Focus.
Author: Hong Zhang
Made In China: Archaeologies Of The Belt And Road Initiative May—August 2021
When thinking about China’s integration with the global economy, the usual landmarks
referred to are the ‘Going Global’ (走出去) strategy launched in the late 1990s and
China’s accession to the World Trade Organization (WTO) in 2001. China’s overseas
economic activities before these events tend to be overlooked, as though they did not
exist. But as this essay will show, the actual ‘going global’ of Chinese economic actors
took place long before these watershed moments. If these important activities have
escaped analytical attention, it is because they are not captured by the statistical
categories conventionally used to measure international economic activities, such as
outward foreign direct investment (OFDI), despite the fact the Chinese authorities
routinely document these activities and publish statistics about them.
International contracting (对外承包) is the main activity that has been largely
overlooked by external observers. Since the late 1970s, Chinese companies have been
hired for overseas projects to provide construction and engineering services, or
sometimes as designers, consultants, or operators. In terms of economic accounting,
international contracting is a form of trade in services. But in China, it is given the
term ‘international economic cooperation’ (对外经济合作) and has been reported
alongside OFDI (MofCOM n.d.). The framing as ‘cooperation’ reflects a specific outlook
of China’s, which has been shaped by its domestic political and economic context, as
will be explained later.
Measured by its volume, international contracting as an overseas economic activity is
arguably more important than OFDI. As Figures 1 and 2 show, while both international
contracting and OFDI grew dramatically in the past four decades, international
contracting enjoyed a substantial lead over OFDI, especially in the pre-2000 period
while OFDI started to decline since 2016, international contracting has held steady