Generational Dynamics World View

[John J. Xenakis]

*** 4-Sep-18 World View -- China courts African nations as charges of 'neo-colonialism' grow

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)

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 can't 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:

<QUOTE>"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."<END QUOTE>

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:

<QUOTE>"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."<END QUOTE>

According to one senior Chinese diplomat recently, China has been
upping the pressure on the country, and they expect the eSwaziland 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's forced to give up
valuable asset 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've 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 come 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% 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've 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:

<QUOTE>"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."<END QUOTE>

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 can't afford it, just as they can't 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's a small enough amount that one can be certain that it can be
repaid. One thing that's clear from China's policies is that they're
making loans without any guarantee that they will be repaid and, in
fact, where it's all but certain that they WON'T be repaid. It
appears to be China's policy to make loans that can't be repaid, and
then take control of infrastructure and land in the target country.
That's 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)

Related Articles

• China's railway contractor in Kenya accused of 'neo-colonialism, racism and blatant discrimination' (14-Jul-2018)
  
  
• China mocks America's 'Indo-Pacific' strategy at ASEAN meeting (05-Aug-2018)
  
  
• Australia passes foreign influence laws, targeting China (29-Jun-2018)
  
  
• China takes control of strategic Hambantota seaport in Sri Lanka, raising concerns in India (11-Dec-2017)
  
  
• China establishes its first foreign military base, in Djibouti (13-Jul-2017)
  

****
**** 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 weren't having a second
child, even when the one-child policy ended. It seems that there are
a lot of reasons why China's mothers don't 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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John J. Xenakis
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