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China, the World Bank, and Hegemonic Weakening

Gregory Chin

There was a time when it made a lot of sense to envision China's interaction with the global financial institutions as"socialization,"or a process in which China internalized global norms through its participation in international institutions.1 The scholarship on Chinese learning and socialization provided important insight on how China, specifically Chinese officials, were socialized into or came to internalize the group norms of behavior that characterize the International Monetary Fund (IMF), the World Bank, and the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) during the 1980s and the 1990s. This article suggests, however, that China's relation-ship with the World Bank is undergoing a gradual but marked shift, a process that has been in motion since the early 2000s. China is no longer only learning the established process and rules of the global institution and adapting itself to them, but is also actively working to move the Bank beyond some of its established endogenous norms and practices. This study suggests that we are seeing the beginnings of two-way socialization in the relationship between China and the World Bank. This article examines how China is starting to socialize the World Bank under the auspices of implementing the"Memorandum of Understanding (MOU) on Cooperation between the Export-Import Bank of China and the International Bank for Reconstruction and Development," signed in April 2007. Here, China succeeded in overcoming the reluctance of the Bank to agree to new procedures that mean working with China as a co-donor as opposed to its established rule of having bilateral (national) donors line up behind the Bank. Other bilateral donors had long become accustomed to following the lead of the Bank when developing a multidonor lending package involving the World Bank. China was unwilling to subordinate itself to the Bank on cofinancing arrangements to Africa, for example. China is also pushing the Bank to accept new operational norms by building new consensus with the Bank on"appropriate levels of concessionality" in the loan packages that are to be cofinanced by China and the Bank, under the terms of the MOU.