China - Debt Trap Diplomacy

#1
What do you make of this?

Paradise in Debt - China and 'debt trap diplomacy'

The problem is that in five years time, once you’ve enjoyed the luxury the bill for all of it is higher than anything that you could ever afford so you’re stuck and you have two options: give in to the bank and find the money somehow to pay it all back in one hit or become a slave to the bank that put you there, doing their bidding when they whistle. Essentially this is debt trap diplomacy.

With the dispute in the South China Sea and the potential for China to establish military bases in the South Pacific many believe that this type of diplomacy could cause more long term problems for those that simply want to maintain the peace and put a hold on the arms race that is occurring.

Here in Fiji, especially in Suva, apartment blocks are being built and infrastructure erected as part of large Chinese projects that are being painted as modernising Fiji. However when you look closely there are no Fijians working on these projects with import workers being preferred. A tension is rising about how this will go down in the local community when the Fijian government can’t afford to repay the debt that they are racking up.

A recent visit from Australian Prime Minister Scott Morrison, the first prime minister to visit this country in two decades, was done as a good will trip to show that Australia valued Fiji, that the two countries have a long history together that can’t be changed but the fact remains, as the Fijian Attorney General Aiyaz Sayed-Khaiyum put it when asked by 60 Minutes Australia about this type of diplomacy ‘you left and the Chinese came’.

Debt trap diplomacy is here to stay and if Australia and New Zealand want to counter it in their region, the ensuing cash splash will have to be quite vast, meaning they may not be able to keep up with China.
 
#2
...However when you look closely there are no Fijians working on these projects with import workers being preferred...
Ops normal. They prefer to trade with other Chinese when it comes to spending money in order to keep the money in house, so to speak. Quite happy to take gwailo money though.

I've seen them import even the minor consumables such as paper bags and toilet paper from China rather than deal with local business.
 
#3
What do you make of this?

Paradise in Debt - China and 'debt trap diplomacy'

The problem is that in five years time, once you’ve enjoyed the luxury the bill for all of it is higher than anything that you could ever afford so you’re stuck and you have two options: give in to the bank and find the money somehow to pay it all back in one hit or become a slave to the bank that put you there, doing their bidding when they whistle. Essentially this is debt trap diplomacy.

With the dispute in the South China Sea and the potential for China to establish military bases in the South Pacific many believe that this type of diplomacy could cause more long term problems for those that simply want to maintain the peace and put a hold on the arms race that is occurring.

Here in Fiji, especially in Suva, apartment blocks are being built and infrastructure erected as part of large Chinese projects that are being painted as modernising Fiji. However when you look closely there are no Fijians working on these projects with import workers being preferred. A tension is rising about how this will go down in the local community when the Fijian government can’t afford to repay the debt that they are racking up.

A recent visit from Australian Prime Minister Scott Morrison, the first prime minister to visit this country in two decades, was done as a good will trip to show that Australia valued Fiji, that the two countries have a long history together that can’t be changed but the fact remains, as the Fijian Attorney General Aiyaz Sayed-Khaiyum put it when asked by 60 Minutes Australia about this type of diplomacy ‘you left and the Chinese came’.

Debt trap diplomacy is here to stay and if Australia and New Zealand want to counter it in their region, the ensuing cash splash will have to be quite vast, meaning they may not be able to keep up with China.

Just look at the history of Chinese activity in Africa e '60's, the TanZam railway being the precursor, they start off with a few specialists, engineers, surveyors and the like, realise local labour is useless/not available, go on to bring in their own, including farmers to produce food. You end up with a few locals as "placemen", normally people connected/related to the politicians, who do little except draw their pay with the Chinese running everything else.
 

Wordsmith

LE
Book Reviewer
#4
Just look at the history of Chinese activity in Africa e '60's, the TanZam railway being the precursor, they start off with a few specialists, engineers, surveyors and the like, realise local labour is useless/not available, go on to bring in their own, including farmers to produce food. You end up with a few locals as "placemen", normally people connected/related to the politicians, who do little except draw their pay with the Chinese running everything else.
The Chinese domestic economy is running out of steam. Requiring Chinese companies overseas to buy from domestic Chinese companies is a way of postponing when the 'communist' Chinese state experiences a good old capitalist recession.

In addition, unless Chinese investments abroad have been guaranteed by the state they are being built in, a lot of Chinese banks are going to be in deep smeg when the investments in foreign projects go belly up in the next recession.

Wordsmith
 
#5
The Chinese domestic economy is running out of steam. Requiring Chinese companies overseas to buy from domestic Chinese companies is a way of postponing when the 'communist' Chinese state experiences a good old capitalist recession.

In addition, unless Chinese investments abroad have been guaranteed by the state they are being built in, a lot of Chinese banks are going to be in deep smeg when the investments in foreign projects go belly up in the next recession.

Wordsmith

This next recession has been talked about happening for the past 10 years, no sign of it yet

This commentator at the Daily Telegraph AMBROSE EVANS-PRITCHARD has announced an imminent recession every week for the past 5 years

In the UK employment is up at records levels, announced just yesterday

Playing devils advocate

Archie
 

Wordsmith

LE
Book Reviewer
#6
This next recession has been talked about happening for the past 10 years, no sign of it yet

This commentator at the Daily Telegraph AMBROSE EVANS-PRITCHARD has announced an imminent recession every week for the past 5 years

In the UK employment is up at records levels, announced just yesterday

Playing devils advocate

Archie
Seen German economic performance recently?

https://edition.cnn.com/2019/01/15/business/germany-economy-slowdown/index.html
Germany may have dodged a recession but its economic performance in 2018 was still the weakest in five years, adding to evidence that trade tensions and a sharp slowdown in China are hampering global growth.
The German economy grew 1.5% in 2018, according to preliminary government data published Tuesday. That's a sharp drop from the 2.2% expansion in 2017, and the slowest annual rate since the European debt crisis.
And as noted in the extract above, China is also slowing markedly.

Growth has been debt fueled and we're reaching the limit of growth that can be financed in that manner.

Wordsmith
 
#7
This next recession has been talked about happening for the past 10 years, no sign of it yet

This commentator at the Daily Telegraph AMBROSE EVANS-PRITCHARD has announced an imminent recession every week for the past 5 years

In the UK employment is up at records levels, announced just yesterday

Playing devils advocate

Archie
Silly Brit, you can’t beat history and you can only roll the dice so many times until you hit snake eyes.
 

Goatman

ADC
Book Reviewer
#8
I was going to post this in a new thread but this seems as good a place as any.

( From The Economist - by kind permission Ms Rita Chevrolet )

Amid trade tensions with America, China is showing old war films

The article illuminates the age-old art of re-writing history to serve current policy makers :

There is a lot for Americans to dislike in the Chinese propaganda film “Shangganling”. It is based on a real battle in late 1952, during which American and South Korean forces failed to take a mountain ridge from more lightly armed Chinese troops, who suffered terrible casualties. The weeks-long campaign came near the end of the Korean war of 1950-53, which began when the Stalinist regime of Kim Il Sung invaded the pro-American south and which eventually drew in millions of Chinese and unforces. Chinese schools teach that China joined the war in self-defence and was victorious. Pupils are told their countrymen showed solidarity with communist brethren in Korea while standing up to American imperialists who were bent on attacking China’s heartland. Official histories avoid the awkward question of who started the “War to Resist America and Aid Korea”, as it is known. China’s internal estimates put the Chinese death toll at 400,000. The public is told that only 152,000 Chinese were killed.

Newspapers have begun to cite the Korean war in editorials, as they brace the public for prolonged trade conflict with America. Filmed in 1956, “Shangganling” is one of several Korean war films shown on national television in recent days. Sporting crude, prosthetic hooked noses beneath their steel helmets, the “Americans” in that film cackle with laughter as they incinerate Chinese troops with a flame-thrower. In their foxholes they ogle photographs of pin-up girls. They fairly swagger as they advance with support from tanks and bomb-dropping us Air Force jets. But their bullies’ bravado vanishes in hand-to-hand combat, depicted in a close-up frenzy of wrestling and stabbing. Soon the Yanks are running away, hands raised in panic, only to meet a murderous American officer, who is shown coldly ordering the fatal machine-gunning of his own troops to frighten the rest back into action.



Wiki piece about the film here Battle on Shangganling Mountain (film) - Wikipedia
1559809241955.png


The Economist goes on :

Perhaps sensing that this Mao-era grotesquery could be misinterpreted, state media have offered guidance. In a tweet, Hu Xijin, editor of Global Times, a nationalist tabloid, argued that victory on Shangganling (Triangle Hill, as Americans called it) had enhanced China’s status in its talks with America during the war. “There is no equal negotiation without fighting” is the film’s message to Chinese viewers, Mr Hu wrote. A blog, Taoran Notes, which appears to have official backing for its musings on the trade feud, said references to Korea were a way of saying that China is a master of “talking while fighting”, including in today’s contest with America.

To the Chinese public, the Korean war is an easily grasped symbol, signifying that “even if we go head-to-head with the Americans we should not be afraid. We can take them,” says the best-known Chinese historian of that conflict, Shen Zhihua. He hopes that China’s negotiators are signalling toughness to the public in order to leave themselves wriggle room in talks with America.

Mr Shen is an unusually outspoken scholar, whose long research in Chinese, Soviet and Western archives emboldens him to challenge official accounts of the Korean war. He has angered Maoist hardliners by arguing that Stalin cornered Mao into entering the hostilities. The professor says that what the Chinese leader actually wanted was Soviet help to invade Taiwan, the redoubt of the Nationalist regime which was driven to the island at the end of the Chinese civil war in 1949. In 2017 Mr Shen gave lectures calling today’s North Korea, and its nuclear weapons, a liability for China.

Propaganda should not be confused with history, the professor says, drawing deeply on a cigarette in his office at East China Normal University in a suburb of Shanghai. Chinese academics know about the “huge price” that China paid for a war that ended where it started, with Korea divided along the 38th parallel. Early Communist leaders “knew in their hearts” what happened, too. He is less sure that today’s still do. As for the general public, they do not know how many died and remember the war simply as a “great success”, he sighs. Mr Shen would like to explore hard questions about why talks to halt the Korean war lasted a year-and-a-half, and who benefited from that drawn-out process. Alas, he suspects, such research probably could not be published in China.

Misreading past and present
Foreign historians do not face such constraints. They argue that Mao deliberately prolonged the war by dragging out talks on an armistice that other combatants were ready to declare, notably by stubbornly demanding the return to China of 14,000 Chinese prisoners-of-war who were desperate to be sent to Taiwan. His aim was, in effect, to talk in order to continue fighting (and receiving modern weapons and aid from Stalin), despite warnings from his own military chief about “massive, unnecessary casualties”. Mao, unmoved by human suffering, predicted early in the war that 400,000 Chinese would die, and told Stalin that his plan was to spend “several years consuming several hundred thousand American lives”. Told about his own son’s demise in Korea, Mao murmured only: “In a war, how can there be no deaths?”


China’s noisiest patriots, vowing on social media to ditch iPhones for Chinese smartphones, have no idea of the true price their country paid in Korea. They know nothing, for that matter, about why America sought peace talks almost 70 years ago. True, America was daunted by China’s willingness to sacrifice lives. In the end, though, America and its allies wanted an armistice because a unified Korea was not an interest worth all-out war, let alone a nuclear one as some hothead generals proposed.

Today, America is debating something unrelated: whether openness to a rising China is sensible and even necessary, or an act of self-harm. War talk and broadcasting xenophobic films is a gift to American hawks who argue that China is an ideological foe that cannot be trusted. In their desperation to assure their own people that they are not a pushover, China’s rulers are forgetting the first lesson of propaganda. Real history can be a valuable guide. Falsified history leads countries astray.

-----------ends-----------

China's economy is colossal, but as we cast about for expanding our trade opportunities ( as is right and proper) we need to be coldly objective about the the nature of the regime.

The way in which Chinese schools tell the story of the Korean War is on a par with Japan's state curriculum on the Pacific War - Japan as victim rather than perpetrator.
 
Last edited:
#9
Growth has been debt fueled and we're reaching the limit of growth that can be financed in that manner.
State owned companies using money from state owned banks provided by the government?

If you take a fiver from your left trouser pocket, move it to your shirt pocket and then to your right hip pocket, how much debt are you in?
 
#10
State owned companies using money from state owned banks provided by the government?

If you take a fiver from your left trouser pocket, move it to your shirt pocket and then to your right hip pocket, how much debt are you in?
No debt but then that not exactly the same thing, If the money has been spent, someone is in debt unless whatever they have spent it on hasnt lost its value.
 

Wordsmith

LE
Book Reviewer
#11
State owned companies using money from state owned banks provided by the government?

If you take a fiver from your left trouser pocket, move it to your shirt pocket and then to your right hip pocket, how much debt are you in?
If you spend the fiver on something worthless, how much debt are you in?

Wordsmith
 
#12
If you spend the fiver on something worthless, how much debt are you in?

Wordsmith
Depends on if you're sticking to your own definition of worth or that of someone else whose ideas of value aren't the same as yours.
 

Wordsmith

LE
Book Reviewer
#13
Depends on if you're sticking to your own definition of worth or that of someone else whose ideas of value aren't the same as yours.
I suspect the Chinese government's biggest nightmare is a sharp rise in unemployment leading to social instability. The trade off for having a single party Communist state has been steadily rising prosperity. Were that prosperity to be threatened, I suspect the grip of the state on power would loosen.

Wordsmith
 
#14
I suspect the Chinese government's biggest nightmare is a sharp rise in unemployment leading to social instability. The trade off for having a single party Communist state has been steadily rising prosperity. Were that prosperity to be threatened, I suspect the grip of the state on power would loosen.

Wordsmith
It's certainly a worry for them - look what happened when they tried liberalising the economy in the late 80s.

They've still got a massive slack for growth through internal development yet and then there's growth in domestic consumption. I'd give them better than evens for the next two decades or so.
 
#15
I was going to post this in a new thread but this seems as good a place as any.

( From The Economist - by kind permission Ms Rita Chevrolet )

Amid trade tensions with America, China is showing old war films

The article illuminates the age-old art of re-writing history to serve current policy makers :

There is a lot for Americans to dislike in the Chinese propaganda film “Shangganling”. It is based on a real battle in late 1952, during which American and South Korean forces failed to take a mountain ridge from more lightly armed Chinese troops, who suffered terrible casualties. The weeks-long campaign came near the end of the Korean war of 1950-53, which began when the Stalinist regime of Kim Il Sung invaded the pro-American south and which eventually drew in millions of Chinese and unforces. Chinese schools teach that China joined the war in self-defence and was victorious. Pupils are told their countrymen showed solidarity with communist brethren in Korea while standing up to American imperialists who were bent on attacking China’s heartland. Official histories avoid the awkward question of who started the “War to Resist America and Aid Korea”, as it is known. China’s internal estimates put the Chinese death toll at 400,000. The public is told that only 152,000 Chinese were killed.

Newspapers have begun to cite the Korean war in editorials, as they brace the public for prolonged trade conflict with America. Filmed in 1956, “Shangganling” is one of several Korean war films shown on national television in recent days. Sporting crude, prosthetic hooked noses beneath their steel helmets, the “Americans” in that film cackle with laughter as they incinerate Chinese troops with a flame-thrower. In their foxholes they ogle photographs of pin-up girls. They fairly swagger as they advance with support from tanks and bomb-dropping us Air Force jets. But their bullies’ bravado vanishes in hand-to-hand combat, depicted in a close-up frenzy of wrestling and stabbing. Soon the Yanks are running away, hands raised in panic, only to meet a murderous American officer, who is shown coldly ordering the fatal machine-gunning of his own troops to frighten the rest back into action.



Wiki piece about the film here Battle on Shangganling Mountain (film) - Wikipedia
View attachment 397158

The Economist goes on :

Perhaps sensing that this Mao-era grotesquery could be misinterpreted, state media have offered guidance. In a tweet, Hu Xijin, editor of Global Times, a nationalist tabloid, argued that victory on Shangganling (Triangle Hill, as Americans called it) had enhanced China’s status in its talks with America during the war. “There is no equal negotiation without fighting” is the film’s message to Chinese viewers, Mr Hu wrote. A blog, Taoran Notes, which appears to have official backing for its musings on the trade feud, said references to Korea were a way of saying that China is a master of “talking while fighting”, including in today’s contest with America.

To the Chinese public, the Korean war is an easily grasped symbol, signifying that “even if we go head-to-head with the Americans we should not be afraid. We can take them,” says the best-known Chinese historian of that conflict, Shen Zhihua. He hopes that China’s negotiators are signalling toughness to the public in order to leave themselves wriggle room in talks with America.

Mr Shen is an unusually outspoken scholar, whose long research in Chinese, Soviet and Western archives emboldens him to challenge official accounts of the Korean war. He has angered Maoist hardliners by arguing that Stalin cornered Mao into entering the hostilities. The professor says that what the Chinese leader actually wanted was Soviet help to invade Taiwan, the redoubt of the Nationalist regime which was driven to the island at the end of the Chinese civil war in 1949. In 2017 Mr Shen gave lectures calling today’s North Korea, and its nuclear weapons, a liability for China.

Propaganda should not be confused with history, the professor says, drawing deeply on a cigarette in his office at East China Normal University in a suburb of Shanghai. Chinese academics know about the “huge price” that China paid for a war that ended where it started, with Korea divided along the 38th parallel. Early Communist leaders “knew in their hearts” what happened, too. He is less sure that today’s still do. As for the general public, they do not know how many died and remember the war simply as a “great success”, he sighs. Mr Shen would like to explore hard questions about why talks to halt the Korean war lasted a year-and-a-half, and who benefited from that drawn-out process. Alas, he suspects, such research probably could not be published in China.

Misreading past and present
Foreign historians do not face such constraints. They argue that Mao deliberately prolonged the war by dragging out talks on an armistice that other combatants were ready to declare, notably by stubbornly demanding the return to China of 14,000 Chinese prisoners-of-war who were desperate to be sent to Taiwan. His aim was, in effect, to talk in order to continue fighting (and receiving modern weapons and aid from Stalin), despite warnings from his own military chief about “massive, unnecessary casualties”. Mao, unmoved by human suffering, predicted early in the war that 400,000 Chinese would die, and told Stalin that his plan was to spend “several years consuming several hundred thousand American lives”. Told about his own son’s demise in Korea, Mao murmured only: “In a war, how can there be no deaths?”


China’s noisiest patriots, vowing on social media to ditch iPhones for Chinese smartphones, have no idea of the true price their country paid in Korea. They know nothing, for that matter, about why America sought peace talks almost 70 years ago. True, America was daunted by China’s willingness to sacrifice lives. In the end, though, America and its allies wanted an armistice because a unified Korea was not an interest worth all-out war, let alone a nuclear one as some hothead generals proposed.

Today, America is debating something unrelated: whether openness to a rising China is sensible and even necessary, or an act of self-harm. War talk and broadcasting xenophobic films is a gift to American hawks who argue that China is an ideological foe that cannot be trusted. In their desperation to assure their own people that they are not a pushover, China’s rulers are forgetting the first lesson of propaganda. Real history can be a valuable guide. Falsified history leads countries astray.

-----------ends-----------

China's economy is colossal, but as we cast about for expanding our trade opportunities ( as is right and proper) we need to be coldly objective about the the nature of the regime.

The way in which Chinese schools tell the story of the Korean War is on a par with Japan's state curriculum on the Pacific War - Japan as victim rather than perpetrator.
The Chinese are continuing to shoot themselves in the foot. The Hawks over here are winning the message about China.
 
#17
Bloomberg - Are you a robot?

Another thumb in the Chinese Eye...
The Abrams isn't particularly well suited to Taiwanese terrain or the logistics environment they'd likely be fighting in. Upgrading the gunnery control systems on the M60s would be a far better choice, IMO.

Still, when you've got them over a barrel they'll buy what you want to sell.
 
#18
The Abrams isn't particularly well suited to Taiwanese terrain or the logistics environment they'd likely be fighting in. Upgrading the gunnery control systems on the M60s would be a far better choice, IMO.

Still, when you've got them over a barrel they'll buy what you want to sell.
It would be however more survivable, and the Abrams will be around for a long, long, time. I suspect more deals to the ROC in the future at this rate.
 
#19
The Chinese are continuing to shoot themselves in the foot. The Hawks over here are winning the message about China.
Maybe with the U.S. - but they are prospering elsewhere - and stripping resources - and maybe be BFFs of the UK because of Brexit. They just became the fastest growing economy again.
 
#20
Maybe with the U.S. - but they are prospering elsewhere - and stripping resources - and maybe be BFFs of the UK because of Brexit. They just became the fastest growing economy again.
I am highly suspect of the Chinese numbers for economic growth. I also think many countries are rather leery about their economic intentions.
 

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