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 relationship 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.
This article offers two related empirical findings. First, that a different institutional actor on the Chinese side, specifically, the Export-Import Bank of China (China Eximbank) has been assigned to partner with the World Bank for the donor cooperation efforts. China Eximbank is one of China's powerful state policy banks. Its representatives are leveraging the Chinese state's growing economic clout and national financial capacities to reestablish the country's relationship with the World Bank on new footing. This change in the mix of Chinese partners has altered the nature of China's engagement with the World Bank. Relations are evolving from traditional donor-recipient arrangements to a hybrid scenario where China and the Bank work together as co-donors, even while the Bank continues to lend to China.
Second, the endogenous changes in the norms and rules of the World Bank are linked and even preconditioned by important changes in exogenous conditions- external pressures related to the development of Chinese options "outside" of the World Bank. First, China has emerged dramatically as a creditor over the past decade and a rising (net) donor, especially in Africa, the Americas, and other areas of the Global South. The Chinese approach to development finance is not only different from that of the Organization for Economic Cooperation and Development's Development Assistance Committee (OECD-DAC) regime, but it also undercuts the influence of the World Bank in some cases of potential lending. Second, China's leaders have supported the enhancement of the role of multilateral development finance mechanisms at the regional level, in Asia, Africa, and the Inter-American region. These institutions, at a minimum, offer complimentary alternative options for development financing and could turn into default options if conditions necessitate. …