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World View: China Courts African Nations as Charges of ‘Neo-Colonialism’ Grow

China hosts African leaders amid aid criticism
JOHN J. XENAKIS

This morning’s key headlines from GenerationalDynamics.com

  • China courts African nations as charges of ‘neo-colonialism’ grow
  • Is Kenya the next Sri Lanka?
  • Why China’s mothers are refusing to have a second child

China courts African nations as charges of ‘neo-colonialism’ grow

Chinese President Xi Jinping makes a toast at the beginning of the welcoming banquet at the Great Hall of the People during the first day of the Belt and Road Forum in Beijing, China, May 14, 2017 (Reuters)
Chinese President Xi Jinping makes a toast at the beginning of the welcoming banquet at the Great Hall of the People during the first day of the Belt and Road Forum in Beijing, China, May 14, 2017 (Reuters)

China’s president Xi Jinping is hosting, on Monday and Tuesday, the Forum of China-Africa Cooperation (FOCAC), attended by leaders of more than 50 African countries. At the meeting, he announced that China will offer a huge $60 billion in aid for African nations, mostly to develop infrastructure projects for China’s Belt and Road Initiative (BRI).

Xi was eager to refute the growing concerns that China’s BRI investments are a form of “neo-colonialism,” using the aid money as a “debt trap” as leverage to exert control over the internal affairs of the countries involved and, when the debt money cannot be paid back, to gain control of valuable assets, as has already happened when Sri Lanka was unable to repay its debt for the building of the valuable strategic Hambantota seaport.

So Xi may a point of saying the following: “China’s investment in Africa comes with no political strings attached. China does not interfere in Africa’s internal affairs and does not impose its own will on Africa.”

The claim was laughable, as proven by this very conference. Every African nation but one was invited. The one that was excluded was Swaziland, which just happens to be the only African nation left that has diplomatic relations with Taiwan rather than China.

China refuses to have diplomatic relations with any country that has diplomatic relations with Taiwan. China has been using every tool available to it – including bribes, threats, and extortion – to force countries to end relations with Taiwan. The most recent success was Burkino Faso. But Swaziland, recently renamed eSwatini, is the last remaining holdout in Africa. According to government spokesman Percy Simelane:

The people of eSwatini have been benefiting from the cordial relations existing between Taiwan since independence 50 years ago. The nation is benefiting and by extension as expected the leader benefits.

Taiwanese doctors continue to be pillars of our health system. To say it is the king alone who benefits is a projection of political bankruptcy on the part of the accuser.

Everywhere in the world, culture is the soul of a nation, only a political imbecile would put a regional meeting above the soul of the nation.

According to one senior Chinese diplomat recently, China has been upping the pressure on the country, and they expect the eSwatini to change policies soon.

So Xi’s claim that aid comes “with no political strings attached,” and “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa” is really an insult to everyone’s intelligence. AP and AFP and Reuters

Is Kenya the next Sri Lanka?

Xi Jinping also sought to reassure African leaders that he is not leading them into a “debt trap,” where the objective of China’s policy is to put a country into a position where it is forced to give up valuable assets in lieu of paying off its debt to China.

Many Kenyans, in particular, are concerned that they are going to be forced to give up the Mombasa seaport, just as Sri Lanka was forced to give up the Hambantota seaport. And indeed, I doubt that few people would be surprised if that were China’s actual unstated policy. As I described last month in “14-Jul-18 World View — China’s railway contractor in Kenya accused of ‘neo-colonialism, racism and blatant discrimination'”, China’s infrastructure projects are set up contractually to make this kind of default as likely as possible.

Chinese officials have been bragging that China is charging low-interest rates on its latest loans, but interest rates are actually a small part of the problem.

Researcher Anne Stevenson-Yang describes the problem succinctly as follows: China’s loans are quoted in dollar terms, “but in reality they’re lending in terms of tractors, shipments of coal, engineering services and things like that, and they ask for repayment in hard currency.”

This one-sentence description is highly significant, as becomes apparent with the lengthier explanation I have given in the past:

  • China loans a country tens of billions of dollars for infrastructure development.
  • The country will have to repay that plus interest; failure to make payments means that China takes control of the infrastructure project, such as a seaport, and the entire surrounding area.
  • Local workers are given few jobs. Instead, a flood of Chinese workers comes to the region to do all the work. Their salaries are paid out of the loan money, which the workers often send back to China. So the loan money flows back to China, rather than flowing into local consumption and business. Since the loan money flows back to China, and benefits consumption and businesses there, and then the country has to repay the loan anyway, the country is really paying the loan twice, which is 100 percent interest.
  • In the same way, all parts, equipment, and services for the infrastructure project are purchased from China and paid for out of the loan money. Once again, the loan money flows back to China for parts, equipment, and services, and then the loan has to be repaid, so the country is paying the loan twice.
  • China establishes a large community of Chinese workers and families around the infrastructure project. As we have described in the past, these Chinese workers and families are controlled by Beijing’s international coercive propaganda agency, the “United Front Work Department” (UFWD). They will be around for decades because they have to do the maintenance after the project is completed. These workers are considered by the Chinese to be “magic weapons” that they can use to influence country policies, such as relations with Taiwan.

According to one analyst:

This debt acquired from China comes with huge business for Chinese companies, particularly construction companies that have turned the whole of Africa into a construction site for rails, roads, electricity dams, stadia, commercial buildings and so on.

So China provides aid for its own companies and workers to build infrastructure projects, but since the countries have to pay for the loans twice, the countries pay substantially more for the infrastructure projects themselves. So why don’t they do that? Because they cannot afford it, just as they cannot afford to pay back China’s loans.

According to the International Monetary Fund (IMF), Chad, Eritrea, Mozambique, Congo Republic, South Sudan, and Zimbabwe were considered to be in debt distress at the end of 2017 while Zambia and Ethiopia were downgraded to “high risk of debt distress.”

When America loans money to a country, either directly or through the IMF, it is a small enough amount that one can be certain that it can be repaid. One thing that is clear from China’s policies is that they are making loans without any guarantee that they will be repaid and, in fact, where it is all but certain that they will not be repaid. It appears to be China’s policy to make loans that cannot be repaid and then take control of infrastructure and land in the target country. That is why China has control, or will soon have control, of seaports across the Indian Ocean, in Sri Lanka, Pakistan, Djibouti, and Kenya. BBC and The Nation (Kenya) and Standard Media (Kenya) and Sputnik News (Moscow)

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Why China’s mothers are refusing to have a second child

Last week, I wrote “29-Aug-18 World View — China ends two-child policy, but considers a ‘wacky’ three-child policy”, about why mothers were not having a second child, even when the one-child policy ended. It seems that there are a lot of reasons why China’s mothers do not want more than one child, according to a web site reader who sent me the following:

My Chinese wife was an elementary school teacher in Xi’an, China. She says that the biggest reasons why the two-child policy would fail were mostly economic. Consider the following:

  • Children have to be taken care of when they are born. If the couple does not have relatives nearby when the child is born, then one must leave the workforce. While that is on the face of things the same as in the States, it can be far deeper in China, since the “baby-sitter” is responsible for the academic success or failure of the children. (My Chinese relatives have both positive and negative examples in their families.)
  • Contrary to “official belief” by most everybody outside of China, Chinese education is *not* free. (By law, it is *supposed to be free.*) The biggest reasons are that all the schools in a city are ranked in quality. Every parent wants their kids to get into the best quality schools, so as to improve their educational chances later on. It has not been uncommon within Xi’an for parents to pay a bribe to get their kids into a better school in excess of $8,000. That starts first with kindergarten, then for first grade, then again for junior high, and again for senior high.
  • Many teachers would teach sub-standard classes in the school, and then tell the parents that if they wanted their children to get better chances later on, they would have to attend the teachers’ own private lessons after school, which were never free.
  • Most of the kids in the cities will attend private classes after school in other schools to get an edge over the competition for the limited seats in the best schools.
  • Students who don’t pass the zhongkao don’t get into senior high school. They get only one more chance to try the exam a year later if they fail the first time. At this point, schools are very reluctant to allow students into senior high schools through bribes because of Xi’s anti-corruption drive.
  • Then the students have to pass the gaokao or else they don’t get into college. More private school expenses. Students may have one or two more chances to pass the gaokao, but most do not; they have been socially placed for life.
  • Once students graduate from a university, they then have to pass school-specific entrance exams to get into graduate school. And even more bribes and private school expenses.
  • The parents are responsible for getting their kids their first jobs, based on guanxi. Obtaining that guanxi can be quite expensive and take many years. My wife spent a LOT of time and money to get her son his first job after he graduated from the university with a degree in civil engineering.
  • Many college-graduate girls will not marry young guys if they don’t already have a house and a car. Since both of those are horribly expensive in the city, they have to depend upon their parents to provide the funds and/or credit.

In short, even one child is too expensive for a couple in China.

Then comes the fact that now, a married couple also has to support *two* sets of parents. My wife has four sisters and a brother, so they have no problems taking care of her parents. But her son, and her nieces and nephews, will have to support *two* sets of parents because of the one-child policy in place for their generation. Add to that the costs of bribing their children through the education system, and you have a completely broken economic system at the family level.

That is why an increasingly large number of Chinese children are delaying marriage, and often forsaking the entire concept.

KEYS: Generational Dynamics, China, Xi Jinping, Belt and Road Initiative, BRI, Forum of China-Africa Cooperation, FOCAC, Swaziland, eSwatini, Percy Simelane, Burkino Faso, Taiwan, Sri Lanka, Hambantota seaport, Kenya, Mombasa seaport, Anne Stevenson-Yang, International Monetary Fund, IMF, Chad, Eritrea, Mozambique, Congo Republic, South Sudan, Zimbabwe, Djibouti, Pakistan
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