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International Capacity Cooperation—Financing China's Export of Industrial Overcapacity

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  • Tristan Kenderdine
  • Han Ling

Abstract

International capacity cooperation (国际产能合作) exports China's Keynesian project system, offshoring its excess industrial capacity as fixed‐capital investment. Leveraged against foreign exchange reserves, the central policy banks and sovereign wealth funds push credit through a variety of purpose‐built infrastructure investment funds to provincial governments, state‐owned enterprises and ultimately to offshore projects. This paper explores the historical institutional development of funds used to channel central government funds through China's financial bureaucracy into target countries. We explore the export of the policy bank model, provincial implementation and recipient regional industrial policy, and examine the role of international capacity cooperation in China's international trade and investment strategy and its implications for China's domestic industrial policy. We conclude with post‐Keynesian analyses of China's export of industrial overcapacity while maintaining a closed financial model which is likely to introduce excessive risk to the global capital pool.

Suggested Citation

  • Tristan Kenderdine & Han Ling, 2018. "International Capacity Cooperation—Financing China's Export of Industrial Overcapacity," Global Policy, London School of Economics and Political Science, vol. 9(1), pages 41-52, February.
    • Handle: RePEc:bla:glopol:v:9:y:2018:i:1:p:41-52
    DOI: 10.1111/1758-5899.12509
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    Cited by:

    1. Nicholas Jepson & Oyuna Baldakova, 2024. "Chinese State Capital as a Partner for Resource-Based Structural Transformation? The Belt and Road Initiative and Downstream Linkages in Bolivia and Kazakhstan [¿El capital estatal chino como socio," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 718-745, June.
    2. Lu, Juan & Li, He, 2022. "Can high-speed rail improve enterprise capacity utilization? A perspective of supply side and demand side," Transport Policy, Elsevier, vol. 115(C), pages 152-163.
    3. Xiaoguang Wang, 2020. "Leadership-building dilemmas in emerging powers’ economic diplomacy: Russia’s energy diplomacy and China’s OBOR," Asia Europe Journal, Springer, vol. 18(1), pages 117-138, March.
    4. Zhang, Weike & Meng, Jia & Tian, Xiaoli, 2020. "Does de-capacity policy enhance the total factor productivity of China's coal companies? A Regression Discontinuity design," Resources Policy, Elsevier, vol. 68(C).

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