Friday, July 6, 2018

China--A Rising Colonial Power

      Liberals decry the history of Western Colonialism, even though it was the best thing to happen to much of the world (and, in particular to Africa) since the invention of agriculture. Colonialism is evil, say the left, except when it comes to Chinese colonialism. Then it is crickets. But, then, you don't bite the hand that feeds you.

       In his paper, "The Case For Colonialism," Bruce Gilley concludes that colonialism "led to improvements in living conditions for most Third World peoples during most episodes of Western colonialism." Moreover, he writes, "[i]t is hard to overstate the pernicious effects of global anti-colonialism on domestic and international affairs since the end of World War II. Anti-colonialism ravaged countries as nationalist elites mobilized illiterate populations with appeals to destroy the market economies, pluralistic and constitutional polities, and rational policy processes of European colonizers." What followed the end of colonialism was loss of rule of law, rise of corrupt autocratic leaders, and loss of jobs and food production. Consequently, there are actually a fair number of Africans that yearn for colonialism to return, or something like it. Combined with China's desire to spread its mercantile system globally, African nations, and others, are about to engage in another round of colonialism. But I doubt that they are going to find China to be as benevolent as the British, Dutch, or French.

       Embedded below is a video from China Uncensored, wherein Chris Chapel interviews Jeff Smith of Vanguard Africa about China's colonial ambitions in Africa.

"How AFRICA is being COLONIZED AGAIN"--China Uncensored (19 min.)

One thing that in particular caught my attention was the discussion on China building "ghost cities" in Africa as well, presumably for future Chinese workers. But that is generally the Chinese strategy--provide "financing" and build infrastructure, and then man it with their own people. For instance, I am reminded of this article from last year published by NPR discussing the completion of a new railway in Kenya, and which reported:
The rail line was financed with more than $3 billion borrowed from the Chinese government. A Chinese company built it, and a Chinese company will operate it for the first five years. For China, this project is part of a grand plan to revive the old Silk Road. In Africa, China imagines a vast network of rails, from Kenya, through Uganda and Burundi and up to South Sudan that can help it move its goods in and out of the continent with expediency.
And when the 5 years are up? Well, I doubt we will see control being handed over to Kenya. Particularly if Kenya can't repay its loans.

        Of course, it is not just Africa. China has its eyes set on Latin America, and has been investing heavily in projects there. The most recent example of this is Venezuela, where the Chinese have offered to swoop in and save the country's oil industry. The referenced article observes:
The investment from China does not come from mere altruism. Venezuela has been sending China several hundred thousand barrels per day of oil for several years as repayment for past loans. But the catastrophic decline of Venezuela’s oil production threatened those shipments. China was in danger of never being paid back for the tens of billions of dollars that it loaned to Venezuela.
The article continues:
        But it isn’t at all clear that China’s investment will slow the decline. For one, the sum is too small to have a significant impact. But in a broader sense, Venezuela has been taking out loans from China for years and it hasn’t led to economic progress. A report earlier this year from the Center for Strategic & international Studies argued that far from being an economic boon to Venezuela, China’s financial assistance has kept Venezuela hopelessly dependent on oil, while other sectors of the economy have been entirely hollowed out. 
       Moreover, as Venezuela racks up debt defaults, as seems unavoidable, China will be there to pick up the shattered pieces. The state-owned oil companies from China and Russia “will probably market a significant share of PDVSA’s exports and operate an increasing share of its production, guaranteeing the repayment of their loans,” Francisco Monaldi wrote in a report from the Atlantic Council in March. While China may offer some financial assistance, but it probably won’t lead to a rebound. The most likely outcome will be Venezuela continues to decline and is forced to hand over slices of the country’s assets to China.
Which was probably the plan all along--and it seems to be China's modus operandi in other situations. 

         Mexico also seems to be turning to China. In "The Sino-Mexican Influence in America's Backyard," by Kaya Forest and Sierra Rayne report the Mexico will be allowing a second Chinese owned and operated bank to open in Mexico, which will primarily exist to service the needs of Chinese companies operating in the country. The article also points out that "[b]y 2016, trade had exploded to almost $75 billion with Mexico being China’s second largest Latin American trading partner behind Brazil, and China being the second most important export market for the Mexican economy," and "[b]etween 2014 and 2016, Mexico signed more than 40 investment deals with Chinese firms valued at more than $4 billion."

       The concern is that China's investment in Mexico (or Canada, for that matter) is not limited merely to resource extraction.
Increasingly, however, they are engaging in foreign direct investment targeting the transportation, finance, electricity, information and communications technology (IT), and alternative energy sectors. This shift has coincided with the opening of Mexico’s energy, electric power, telecom, and related infrastructure markets to foreign investment, which has attracted Chinese enterprises to invest heavily in the automotive, IT, and alternative energy industries in the country. And while Mexico continues to run a significant trade deficit with China, the extent of the deficit has been declining in recent years.
The article continues:
Due in no small measure to the North America Free Trade Agreement (NAFTA), Mexico’s strong manufacturing base provides efficiencies for factories and businesses located in the country while also ensuring a ready supply of intermediate goods for the manufacturing process and a well integrated production supply chain. Chinese companies are increasingly recognizing the value this environment provides to investments in the country, taking advantage of the build-up in the Mexican industrial base under NAFTA that came at American and Canadian expense.
Thus, China views Mexico as a valuable global partner, not just because of the infrastructure existing there (at the expense of American jobs), but as a means to influence the United States, and bypass trade restrictions against China by going through a NAFTA partner.

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