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No Strings Attached? Evaluating China’s Trade Relations Abroad

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China Power

No Strings Attached? Evaluating China’s Trade Relations Abroad

China’s trade clout with the developing world may be influencing foreign policy issues.

“The champion of the developing world” has become a common reference to describe China over the last decade. China is both a developing country itself but also one of the largest world economies, putting it in a unique position to represent the interests of its developing world brethren.  As the Asian country grows in economic strength, its ability to give voice to developing world issues grows commensurately, especially in international forums.  At least this is the common refrain among Chinese leaders.

In practice, this narrative mischaracterizes the relationship between China’s economic rise and international voice opportunities for developing countries.  A closer examination of trade relationships and foreign policy consequences shows, not that Beijing has come to endorse the interests of its partners, but that its trade partners converge with Beijing. 

In particular, we find that the more countries in Africa and Latin America trade with China, the more likely they are to align with the Asian country on one of its main foreign policy issues: non-intervention with respect to human rights. Every year, the United Nations General Assembly holds country-specific resolutions on human rights, and invariably Beijing votes against condemning violations, invoking the principle of self determination.

Increasingly, African and Latin American countries that have growing trade ties with China have begun to abstain or vote against resolutions they would have typically supported. This change in behavior can be quite remarkable for countries with a long-standing tradition of promoting human rights, such as Costa Rica.

That developing countries would be inclined to side with China rather than the other way around is surprising in some ways.  China has famously touted its “no strings attached” approach on commercial relations. This way of doing business comes in stark contrast to the conditions imposed by Western countries, the International Monetary Fund, or the World Bank. When dealing with them, developing countries have to worry about a number of conditions, including democracy, human rights, and labor provisions in trade agreements, governance oversight in foreign aid, and economic stringency in loans.

The obvious benefit would be that China’s engagement is not only risk free, but also devoid of any colonial impetus. Mutual economic benefit would be the main driver of the relationship.

To be sure, China may not have a purposeful plan to bring their trade partners into alignment on foreign policy questions.  Even if unintentional, however, this “gravitational effect” has a sound economic basis.  Developing countries in Africa and Latin America are comparatively much more dependent on China than China is on these countries.  In a ten year period, for example, Sudan’s trade with China rose from 1 to 10% of its Gross Domestic Product. That pattern is even starker in a country like Angola, for which trade with China represented 25% of its GDP in 2006.  While China certainly needs access to the resources in these countries, the individual countries are far less important to China than China is to these countries.  The asymmetry in needs gives China a bargaining advantage that translates into foreign policy outcomes even if not by explicit design.

Whether by design or not, the convergence with China’s foreign policy goals is important on at least two levels.  First, developing countries in Africa and Latin America may be lulled by the prospect of partnering with a country such as China that does not have an explicit political agenda, as did the United States and Soviet Union during the Cold War, but this appears to be an illusion.  Whether this reaches the level of “new colonialism” as former Secretary of State Hillary Clinton referred to it remains to be seen, but the economic asymmetries that undergird the relationship make that prospect more likely. 

A second set of implications deals with the United States. During the same period in which China’s trade with Africa and Latin America and foreign policy convergence have increased, the United States and China have actually diverged in their overall UNGA voting behavior.  This suggests something of a zero sum dynamic in which China’s growing trade relations make it easier to attract allies in international forums while US influence is diminishing.  

Taken together, these trends call for greater engagement on behalf of the United States in the developing world. Since the September 2001 attacks, Washington has dealt with Africa and Latin America through benign neglect and shifted its attention elsewhere. If foreign policy alignment does follow from tighter commercial relations, the US ought to reinvigorate its trade and diplomatic agenda as an important means of projecting influence abroad.

Sarah E. Kreps is Assistant Professor of Government at Cornell University and author of Coalitions of Convenience: United States Military Operations After the Cold War (Oxford University Press 2011). Gustavo A. Flores-Macías is Assistant Professor of Government at Cornell University and author of After Neoliberalism? The Left and Economic Reforms in Latin America (Oxford University Press 2012). They are the authors of "The Foreign Policy Consequences of Aid: China’s Commercial Relations with Africa and Latin America, 1992–2006," which appears in the most recent issue of the Journal of Politics