China's Chance to Lead: Acquiring Global Influence via Infrastructure Development and Digitalization

vii
Contents
List of Figures page x
List of Tables xi
Preface and Acknowledgements xiii
List of Abbreviations xvii
1 Introduction 1
1.1 Why It Matters 3
1.2 Existing Explanations 5
1.3 Summary of the Argument 11
1.4 Organization of the Book 14
2 Market Failures and China’s Chance to Lead 20
2.1 Infrastructure Financing and Development 22
2.2 China’s Motivation and Capacity to Address Infrastructure
Financing Needs 32
2.3 Transaction Costs and Coordination Failures 38
2.4 Which Technologies, Industries, and Markets Would Benefit
from Standardization? 40
2.5 Why Is the Time Ripe for Standardization? 44
2.6 Why Is China Well Positioned to Promote Standardization? 47
2.7 Why Is the BRI the Best Way to Promote Chinese Standards? 54
2.8 Conclusions 56
3 Measuring Infrastructure Needs and Foreign
Infrastructure Investment 57
3.1 Measuring Countries’ Infrastructure Financing Needs 58
3.2 Infrastructure Spending and Market Failures 60
3.3 Chinese Foreign Spending 63
3.4 Conclusions 71
4 Theory: Why Countries Vary in Their Participation
in the Belt and Road Initiative 73
4.1 The Demand Side: Recipient Country Characteristics 73
4.2 The Supply Side: Characteristics of Chinese Foreign
Infrastructure Spending 86
4.3 Compatibility of Chinese Infrastructure Spending by
Political Regime 94
viii Contents
4.4 Extensions 98
4.5 Adopting Chinese Standards 100
4.6 Conclusions 106
5 Measuring Clientelism and the Corporate Sector
across Political Regimes 108
5.1 The Distribution of Political Regimes 110
5.2 Political Regimes and Clientelism 113
5.3 Political Regimes and the Public-Private Orientation of the
Corporate Sector 115
5.4 Conclusions 136
6 Political Regimes and BRI Country-Level Patterns 138
6.1 Background on China’s Foreign Spending Activity 140
6.2 Trends and Patterns of the Belt and Road Initiative 142
6.3 Chinese Foreign Investment and Construction
Activity, 2005–2019 153
6.4 Trade Effects 160
6.5 Conclusions 164
Appendix 165
7 Political Regimes and BRI Project Characteristics 174
7.1 An Illustrative Example: The Kenya Standard Gauge
Railway Project 175
7.2 Extending the Political Regimes Theory to BRI
Project Characteristics 177
7.3 Patterns and Trends 181
7.4 Conclusions 203
Appendix 206
8 Case Studies of Political Regimes and the BRI 232
8.1 Background on BRI Projects, Political Opposition, and Clientelism 234
8.2 Background on China’s International Port Investments via the BRI 237
8.3 Closed Autocracy: The United Arab Emirates 240
8.4 Strongly Durable Electoral Autocracy: Djibouti 246
8.5 Weakly Durable Electoral Autocracy: Malaysia 254
8.6 Electoral Democracy: Indonesia 264
8.7 Liberal Democracy: Greece 273
8.8 Conclusions 283
Appendix 285
9 Chinese Exports of Digital Technologies and Standards 288
9.1 The Limits of Formal Standardization 289
9.2 The Promise of De Facto Standardization 293
9.3 The Digital Silk Road and Smart Cities Technologies 295
9.4 Chinese Foreign Aid to the Information and Communications
Technology Sector 301
9.5 Case Studies 304
9.6 Huawei’s Cloud Business 308
9.7 Conclusions 310
Appendix 312
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10 Conclusions and Implications 315
10.1 A Brief Summary of the Theory and Findings 317
10.2 Increasing Alignment between China and Electoral Autocracies:
Evidence from UN General Assembly Votes 320
10.3 Theoretical Implications 326
10.4 Policy Implications 327
10.5 Business Implications 331
10.6 Conclusion 334
References 336
Index 357