Chinese Aid to the Industrial Development of the South: Input into Post-Industrialization of China

Abstract

The article discusses the true goals and benefits of China’s assistance to the South. A hypothesis reveals the relationship between China’s transition to an innovative development model and its interest in the industrialization of the least developed countries. The tasks of modernizing the economy and the national interests of China in the context of the modern international labor division are analyzed. To ensure the growth of incomes of the population to the level of developed countries, the creation of a post-industrial structure of the economy is required. This means that a number of industrial functions must be transferred to such backward countries that, without Chinese capital and technology, are not able to industrialize. In addition, for China, the problem of equilibrium of the balance of payments is urgent, the solution to which is to increase imports of simple goods and make direct investments within the Chinese Global Value Chains. Analysis of directions and first results of Chinese development assistance confirmed its important contribution to solving these problems, as well as its systemic nature within the framework of the Belt and Road Initiative. The Initiative coordinates the construction of power plants, all types of infrastructure, and on their basis the development of industry and consumption under the control of Chinese companies. Therefore, all types of grants or concessional assistance to the South can be considered as investments into the development of the Chinese economy, which has gone beyond national borders. At the same time, participation in the Initiative brings benefits and growth prospects up to the level of the modern PRC for the most backward countries, but does not create growth opportunities for countries with already developed industry and an average standard of living, on the contrary, it reduces their space for post-industrialization.