Does Anyone Else Think China's Foreign Investment Is Sus?
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This made me think of Eko Atlantic in Lagos, Nigeria. Tons of foreign investment is sent into Lagos, but the incentives are unclear. its one of the largest cities in the world, but its not necessarily a strategic hub for anything.
Well duh, same reason we invade every country and export freedom
its all about geopolitics and gaining as much power/influence as you can
I read somewhere that Australia of all places has taken a nose dive in corruption indices lately because of lax foreign investments rules. Every Chinese billionaire or African warlord seems to be parking money in there nowadays and there is little oversight.
https://thediplomat.com/2022/01/when-will-australia-confront-corruption/
Don't understand the MS on this one. It's an open secret that China is pumping tons of money into Aus to get their raw materials and trade influence.
Edit: I don't if true or not, but knowing how deep China is in Africa I wouldn't be surprised if that money coming from Africa into Aus is actually Chinese money just routed through another intermediary. Pretty easy to draw that inference considering who else we know has done it.
People just MS him because of who he is most of the time, regardless of if his comments are relevant or accurate.
Almost all of the new roads/infrastructure in Zambia is financed and built by the Chinese. Gives them access to the considerable mining in the country. There is absolutely nothing charitable about it.
Most of the loans provided by the IMF or WB have conditions attached requiring recipient countries to introduce privatization of certain industries (i.e. water supply), and as you might suspect, these contracts for vital services have often gone to firms from Western countries without a very competitive bidding process, with poor results. There is nothing charitable about anything, bro. If anything, what you described that China is doing isn't even as bad as what our own countries are doing - they're just more subtle about it.
What sus is OP's ignorance on the matter. It has never been about charity and there's no conspiracy, since this strategy literally has a name: the Belt and Road initiative. Welcome to the real world.
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Are you from Asia? I browse "Western" Internet a lot and I've literally never seen anyone claiming that China is doing that out of charity. Read about debt traps too, i.e. China lending money to (mostly African) countries and then seizing strategic assets when they default. Recently China tried to seize the port of Mombassa in Kenya. However these days Chinese activity is greater in the Middle East, notably in Irak since the USA left.
It's not that China is trying gain war allies (they're doing well alone), they're just trying to expand their influence into strategic locations the same way the USA have military bases all over the world.
Yeah welcome to the real world where China is doing this for "free" as part of the initiative. They are literally giving loans to African countries and then fulfilling the projects through a Chinese company for the same amount that they gave the government. Nothing wrong with that, but just imagine the interest rates they pay afterwards.
The initiative is actually taught within Geography A-Level. Not very well known considering it is thought that around $1 trillion of new transport links around Europe and Asia will be built because of it. And it should also be noted that these transport links aren't being built solely by the Chinese - HS2 in the UK is part of it because the steel used is of Chinese origin.
I'm not meaning to sound cocky, but it is a major issue that is being taught in schools at the moment.
No offense, this question is born out of ignorance and naivety rather than being any informed take. China never invested in Africa as charity. China's not some charity or piggy bank giving out free cash to the rest of the world. Rather, China's marketing message for its foreign investments, and the Belt and Road initiative, is that both sides benefit (or as China likes to call it "Win-Win"). Essentially, China is willing to provide an alternative source of financing (both directly and through the AIIB) with relatively fewer covenants and lower interest rates to countries that are very risky and may not be able to receive appealing terms or any money at all from the IMF, World Bank, or private investors. In return for providing financing and improving infrastructure, China also benefits from increased trade between them and the rest of the world.
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I mean, their take is one way to portray it, and while it's not incorrect it's obviously a one-sided take. China's infrastructure investments does help develop developing nations in a way. Nations need capital to grow, and for many risky developing nations, they don't have great access to capital. China is willing to provide capital with much looser terms than the World Bank, IMF, or other international organizations or private investors are, and in extremely risky countries, China is often willing to provide capital where there is no supply of capital. That's what the people who say that China is "helping" third-world countries mean; They see it as China is willing to stomach the risk where other investors aren't willing to, and the terms of Chinese loans are much less strict than other investors who seek greater financial gain.
Let me put it another way. You're a landlord, and some person with low income and no credit history wants to rent your property. Many landlords would likely refuse the person because they aren't willing to stomach the risk; Other landlords may place extremely harsh conditions on the lease and demand more money upfront. Essentially, China is the landlord that is willing to stomach the risk and offer lower rent than other landlords. China is still a landlord, not a shelter, and also wants to "win" from the transaction, but in a way, China is helping the poor person; They're providing a service for much less than the market, and considering that service is pretty important to the poor person, they can be perceived as helping the poor person.
China in Africa is one of the most bizarre things I’ve seen in my life. Northern Mali is a total war zone and there’s a random Chinese battalion “fighting for the UN”. In southern Mali (less war zone but still sketch) you see Chinese buildings and centers with signs in Chinese outside said buildings.
Part of China’s expansion in Africa has to do with space. Countries own the space above their country. These countries in Africa aren’t putting up satellites anytime soon, so China will buy their space from them. WILD.
No one wants to focus on China but it’s pretty apparent that these guys are bad news. Absolutely ruthless, and completely authoritarian.
Chinese investment in Africa has been decreasing though because those countries literally always default on their debt. China nowadays is getting more interested in the Middle East since the defeat of the USA in Afghanistan: https://www.ft.com/content/f2ef2f3f-c663-4ce8-82d8-8c95ba23de97
With all due respect it has nothing to do with space (lol). China's already been providing a huge chunk of funding and tech transfer for several African space agencies, they don't need the Belt and Road to do so. The Belt and Road in Africa is simply an infrastructure program designed to facilitate trade and economic development. Africa has a lot of untapped natural resources that would require significantly improved infrastructure to access, and China would very much like new natural resource markets. As Africa's population continues to explode and countries like Nigeria/Kenya/Egypt/Ethiopia especially continue to get wealthier, China sees a very large consumer market for Chinese exporters as well.
Also, interestingly China and Africa actually have a pretty connected political history. Several African nations were among the first to recognize the PRC post-Civil War, and China also provided military and political support to a lot of the independence/liberation movements during the de-colonization period. Along with Albania, a number of African countries also led the effort in the UN in 1971 to give the PRC a UN seat.
Yep. The Chinese are absolutely ruthless for doing business with other countries. I don't know why they need to be so ruthless by buying resources from other countries when they can just invade them based on forged documents, and then distribute control of their natural resources to their own companies like the US and UK do. Quite bizarre, really.
It is false to say China lends at low rates, in fact, they often lend at double the standard IMF rates.
It's quadruple, according to the BBC.
On aggregate, China lends at a higher rate to developing countries than the IMF. However, the explanation is in the details. China often provides lending to much riskier projects that the IMF and other lenders won't touch. LSE did a study a couple years back that showed that for similar projects, China provided lower interest rates.
Not really sus. Pretty much expected since Europeans don't have it in them to be imperials anymore and the US is the one imperial power that actually makes places worse and Russia doesn't care.
Second place to China in Africa are the Turks, Israelis, and the Gulf States. I can't imagine any of them would be nice colonial masters but hey what are you gonna do.
Not really, France is still very influential in its African colonies. France still manages their central banks and has a few thousand soldiers in Africa fighting terrorism, so in exchange these former colonies get a stable currency that can be exchanged for the euro.
Russia is trying to pry these colonies away, there were a few coups in Mali this year and now the French troops have been replaced with Russian PMC types.
It is their Marshall Plan
Not even a conspiracy theory. Anyone who has been paying attention know their Belt and Road Initiative is lending and building infrastructure for poor nations so those nations owe them. Building alliances, dependencies, trade partners, and IOU's around the world. It's just fact at this point.
*local man discovers geopolitics*
Right. I forgot Western countries are the saviours of third world countries.
If anything, China is helping these countries more than countries like the US or UK. China doesn't pretend to be doing charity - they're businessmen, and they stick to business. No false pretences. It's us here in the West who like to act like we're all altruistic while siphoning resources out of third world countries, helping support coup attempts to get access to lithium, and invading countries on the basis of forged documents to open up their oil fields to be controlled by companies like BP.
Where have you been for the last 15 years? Lol
The only reason China's (arguably predatory) loans to African countries gets discussed so much is because Americans are brainwashed into believing they are the Good Guys(TM). We literally did the exact same thing during and after WW2 with Lend/Lease (Destroyers for Bases was a literal scam/robbery), the Marshall Plan, and Structural Adjustment Plans through IMF/WB loans.
It definitely is hypocritical, and Americans are largely salty because China's providing an alternative solution to the World Bank and IMF where the US has much more influence. Just look at the AIIB. American diplomats made a huge scene when China co-launched the AIIB and the US then tried to block American allies from joining.
Yes, loans to fight the Nazis are definitely the same as debt traps. Lend/Lease was crucial to defeating the Wehrmacht in Russia, even Stalin admitted it.
Sure, Lend/Lease was a good policy that was crucial in the timely defeat of the Nazis. These infrastructure investments are also a net positive for these African countries. Both came with predatory/semi-predatory terms that would benefit the originator country.
Also Destroyers-For-Bases was literally a scam. We sent them a bunch of essentially worthless ships that were never used in combat in return for securing future American hegemony in the post-war order. Pure realpolitik / preying on a nation in national crisis.
To all the people saying iTS tHE sAME aS wHAT wE dO, it's not.
Chinese loans have
They are correct when they say that in some cases countries have failed to pay back Western loans. This happened in Latin America in the '80s and in the Asian Financial Crisis in the 90's. So given the fact that Chinese loans are harder to pay back, there is a high chance they make not work out. Chinese interest in the Belt and Road program seems to be sinking and leaders are taking a more defensive tone.
https://www.bbc.com/news/59585507
https://www.atlanticcouncil.org/blogs/new-atlanticist/chinas-real-debt-…
Except the Belt and Road debt trap initiative has been academically disproven so many times I can't even count. Even RAND, arguably one of the most anti-China and hawkish major think tanks, disproved the debt trap myth. I've linked some studies and articles that you may be interested in reading about.
Also, another thing, Chinese loans are at a higher interest rate because the BBC article only looks at rates to developing countries aggregated, not what the loans are actually used for. China often provides financing to the riskiest of projects with the loosest covenants and DD, that other large players won't even think about touching. That's why so many developing countries even go to China for lending. Think about it, from the perspective of a government official in a developing country, why would you go to China for lending when other countries are offering better terms and rates? You wouldn't. China lends as a higher rate on aggregate because China often lends to the riskiest projects where there's very few or no alternative financing options.
https://www.rand.org/content/dam/rand/pubs/working_papers/WR1300/WR1338…
https://www.chathamhouse.org/sites/default/files/2020-08-25-debunking-m…
https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-de…
I simply stated that the loans are risky and difficult to pay back, something you agreed with, not that they were deliberately engineered by China so that countries would become indebted and they would gain influence. The Chinese government seems to acknowledge the first point (not the second) as they are cutting down on the size and the risk of many of the BRI deals.
Could you please stop logging onto alt accounts to MS me and SB yourself? I got a bunch minutes after you made that comment.
LOL.
https://www.theatlantic.com/international/archive/2021/02/china-debt-tr…
Once again, I just said that Chinese loans are much riskier and harder to pay off, which could lead to disaster. It is much harder to prove that China does this on purpose in order to take over those countries as a debt trap.
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LOL too much to unpack from your little comment but MBS of Saudi would be offended if you don't call him a dictator.
Nobody is doubting China is making these investments for their own geopolitical reasons. It's just hypocritical to constantly call it out when the US and other western nations are literally no better.
Also LOL @ the idea that Western nations will not invest in dictators and warlords. Buddy, a significant portion of the world's dictators are in power literally because of US-backed coups and revolutions.
LOL you are incredibly naive if you think Western countries won't invest where corrupt dictators and warlords rule.
They just don't invest where anti-Western dictators and warlords rule. They'll invest where the corrupt dictators are pro-Western.
It's the same as what we do
Stop pretending the U.S. is some big savior and China is some big bad evil. They're the same at the core
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I am 1000% pro USA, but China's ability to think decades in advance will present a nearly unbeatable challenge to the US who can only think 1-2 election cycles in advance. I'd rather be able to live in a country where I can shit on my government when they do something I don't like, but at the end of the day, China still has the long-term outlook advantage.
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As an expat in HK I'd love to work in Shanghai instead (would pass on Beijing though). Don't just read the news without any critical thinking and curiosity to find out for yourself. Taiwan and Macau aren't even on the radar of bankers. Taiwan pay is even worse and Macau has nothing besides casinos.
While they no doubt have the advantage in long term strategic thinking and can just steamroll whole cities to get the infrastructure and outcomes they need, I'm hesitant to say they will have a strategic advantage over the US in the long run, almost primarily because of their demographic issues. Their population is already pretty much at 0% growth and starting to fall, as their population ages significantly they'll have to shift more resources to their elderly and I think we'll see advancements stagnate. America has a natural birthrate below replacement, but we are also more liberal with legal immigration than most countries, and that has kept our population growth up.
I think it will be very interesting to see how countries deal with aging populations, and especially to see how middle income countries are affected differently from wealthy countries (aka what's it going to look like in China vs Japan/France/US).
What is doing is no different from what the U.S. does ultimately
It's about extending influence & gaining more resources. West has this view that it's the righteous power (just like China has the same over there). It's no bad or worse
It's difficult to view geopolitics with a moral lens. Other than the obvious things like the Holocaust and such, some things are just fucking evil.
Intentions are more often than not about extending influence, projecting power and locking up resources.
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