"Despite CDB’s central role in developing China’s economy and bankrolling the international expansion of Chinese companies, China’s biggest policy lender rarely makes an appearance in most English-language chronicles of the country’s economic rise. All the more reason then to praise a superbly researched new book, written by two Beijing-based reporters for Bloomberg, in which CDB finally makes a star turn."
"Lifting the veil on one of global finance’s least understood institutions, the book is essential reading for anyone seeking insight into the workings of Chinese state capitalism." -- China Economic Quarterly, March 2013 Reviewer: Erica Downs of the Brookings Institution
"China's economy sometimes seems the work of miracles: three decades of economic growth, with GDP compounding at an annual rate of around 10%; the world's highest levels of savings and investment; vast trade surpluses, which feed the largest foreign-exchange reserves in history. The financial system has played a key role in delivering these economic feats, and no single institution within it has been more important than China Development Bank. "Understand CDB," Henry Sanderson and Michael Forsythe write in "China's Superbank," "and you understand the core of China's state capitalism."
-- Wall Street Journal review, Feb 27, 2013
"The book is another useful insight into the workings of the Chinese state apparatus to come out of the Bloomberg bureau in Beijing – in July it printed an exposé about the family finances of Xi Jinping, and its website has been blocked since. One of the most striking aspects of the CDB story is how the bank managed to balance being a state-owned company with maintaining sufficient independence to function as a commercial business." -- Irish Times
"Calls for reform in China tend to come in two kinds – one, the most common in Chinese social media and popular discussion, calls for a crackdown on endemic forms of local tyranny, such as land seizures, black prisons, and bribery. The other, found among liberals within the Party and expatriate businessmen, talks about rolling back the growing dominance of the state and state-owned companies over the Chinese economy, opening more markets to competition and ending the practices that allow state-owned (or state-blessed) companies to command cheap access to capital, natural resources, and land. So far, Xi Jinping's term looks promising for advocates of the first but the book [China's Superbank: Debt, Oil and Influence – How China Development Bank is Rewriting the Rules of Finance] makes a case that land seizures are at the very foundations of China's model of state capitalism." -- The Diplomat
China's Superbank by Henry Sanderson and Mike Forsythe is, simply put, a superb introduction to the arrival of China Development Bank on the world stage. The book traces the evolution of the CDB from funding development at home to securing oil and influence for China in Africa and Latin America.
Before I continue my review of China's Superbank, I must make two disclosures. First, I work with both of the co-authors in the Beijing office of Bloomberg News, so they are friends. I like these guys. Secondly, while I had no hand in the writing or editing of this book, the authors did draw on some of my reporting for passages on Huawei and ZTE. My work is cited in two footnotes to the text. These two factors preclude me from claiming to be an entirely objective reviewer.
That being said, the authors did not request that I write this review, and I paid for my own electronic Kindle copy at $30.69 through Amazon.com. Perhaps that's my first criticism, the price. For a slender volume some 203 pages in length, it would have been nice to see at least the Kindle version priced a bit more affordably. There is practically no discount from the $31.65 price on the hardcover, which is not yet available for shipment.
With my initial disclosures in mind, I believe I can still fairly say that even if I didn't know the authors, and despite the price, I would still give this book a strong recommendation. China's Superbank is a highly insightful and readable account of the role of China Development Bank both in its home market and abroad.
I have been following developments in China since my first trip to Beijing in 1991 and I've lived in the country three times for a combined total of about 12 years. While I know firsthand a fair bit about China and its development in the past two decades, there is plenty in this book that I did not know. I'd imagine the same is true for just about anyone who hasn't been pouring over Chinese-language bond prospectuses as Sanderson and Forsythe have.
The book traces the China Development Bank from its founding, and shows how in its home market it pioneered a model whereby local governments financed development loans by the expropriation and transfer of land rights. They explain how this became the central mechanism for paying back loans to the CDB and, as a result, people must be removed from their land at below market prices, feeding into rural unrest.
``Without suppressing land compensation, local governments can't make the margins to pay back the banks,'' the authors quote U.S. scholar Victor Shih as saying.
The book chronicles CDB's role in development of the country's bond market, and shows how CDB is unique among Chinese lenders in being financed almost completely by bond sales rather than deposits. The commercial banks that buy those bonds then assign them a zero-risk rating, and so set no capital against them even as CDB ramps up lending to new commercial sectors, and begins to spread its wings abroad in countries with long histories of default, including Venezuela. Thus the bank gives new meaning to ``too big to fail'' the authors say.
China is now lending more to developing countries than the World Bank. In the case of Venezuela the lending is a staggering $40 billion. The authors show how the CDB's oil-for-loans programs help China secure large deliveries of oil for its growing economy, and that's not all. Since much of the proceeds of those loans are then used to buy Chinese goods and services, ``China wins twice,'' the authors say.
I highly recommend this book for anyone looking for an introduction to how the CDB moved from funding development at home, to the frontlines of both China's global quest for energy and natural resources as well as the expansion of Chinese enterprise abroad.
One wishes the authors had been able to drill into these subjects in even greater detail. Also, more context and comparison of CDB with other development banks globally would have been useful. While more would be better, there is plenty here to get you started on the global role of the little understood and increasingly influential China Development Bank.
As another reviewer mentioned, the Kindle version is just a draft! There are editorial markings throughout and I wonder if I am reading the final copy! For example, I found "insert sentence" at least a dozen times. Does that mean sentences are missing?? I would hope for 30 bucks that I'm paying for a final edited version!
Product Details :
Hardcover: 250 pages
Publisher: Bloomberg Press; 1 edition (January 22, 2013)
Language: English
ISBN-10: 1118176367
ISBN-13: 978-1118176368
Product Dimensions: 9.3 x 6.3 x 0.9 inches
More Details about China's Superbank: Debt, Oil and Influence - How China Development Bank is Rewriting the Rules of Finance 1st edition
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