This chapter presents the book’s third case study, exploring how state transformation shapes China’s international development financing (DF) policymaking and implementation. DF is often seen as an instrument of economic statecraft, strategically deployed to advance China’s geopolitical interests. Contrarily, we show that authority and policymaking is fragmented and contested among central agencies, producing weak oversight for implementing state-owned enterprises, which have primarily pecuniary motives and scant regard for official Chinese diplomatic goals. DF projects thus emerge not from a ‘top-down’ strategy but in a ‘bottom-up’ way, reflecting the agency of buccaneering SOEs and recipient-country elites. The outcomes of DF projects – and whether they benefit China’s international relations – depend on how the specific interests on both sides intersect, as we show through comparative case studies of hydropower development in Cambodia and Myanmar. In Cambodia, Chinese DF was managed by a dominant-party regime in ways that bolstered its domination, generating warmer ties with Beijing. In Myanmar, however, socio-political fragmentation meant that similar projects exacerbated social conflict and even sparked renewed civil war, prompting a crisis in bilateral relations.

This chapter introduces the book and its main arguments. It first discusses the International Relations debate over China’s rise, and its limitations. The debate is polarised between those depicting China as a revisionist actor, or as supporting the status quo. The debate is at an impasse because evidence exists on both sides. What is needed is a framework that can account for both sorts of behaviour. This requires rejecting the assumption that China is a monolithic actor pursuing a coherent grand strategy. In reality, since the late 1970s, the Chinese party-state has become fragmented, decentralised and internationalised, greatly expanding the range of actors involved in China’s foreign affairs. Because these actors are only loosely coordinated within a Chinese-style regulatory state, this produces a wide range of international outcomes that do not necessarily reflect top leaders’ intentions. The chapter also outlines the structure and contents of the rest of the book.