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This Is How China Rolls

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A very interesting series of reads about how China is cleverly colonizing Africa (to be fair, they're doing the same thing the Western powers did before them).

In the first article, a report that China took over a power plant in Zambia to settle a debt:

https://www.reuters.com/article/us-zambia-economy-idUSKBN1OE0LD

Next, a human-interest angle about the protests over corruption in Zambia. China thoughtfully stepped in when Zambia was in a financial crisis last year (in part due to owing a $38M loan payment to the EU)...

https://www.theguardian.com/global-development/2019/dec/11/china-steps-in-as-zambia-runs-out-of-loan-options

..next: https://www.businesslive.co.za/bd/world/africa/2020-10-28-zambia-wins-deferral-on-china-development-bank-debt/

...more about the missed interest payment (note: they defaulted on the debt on Friday 13 November).

...and now: https://www.theafricareport.com/50798/zambias-default-shows-new-approach-needed-for-chinese-debt/

This is known as "debt-trap diplomacy". It's a lot like the British Empire in the 18th and 19th Centuries. The Zambians don't exactly know how much is even owed (estimates range between 12 and 15 billion). Zambia is the second-biggest copper producer in Africa and China is a major buyer.

None of this is new - it's been going on for years in several African countries and many of the people who live there are unhappy with it.

See also: https://www.theafricareport.com/29991/seeking-debt-relief-angola-opens-door-of-oilfield-holdings-to-china/

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14 minutes ago, wmw999 said:

See the new boss; just like the old boss. They all want to buy countries.

Wendy P.

China can absorb the losses for a while, but it won't be long before it blows up in their faces.

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2 minutes ago, markharju said:

China can absorb the losses for a while, but it won't be long before it blows up in their faces.

Yes, taking the long view instead of just being concerned with the next quarter's profits has turned out so poorly for China over the past 40 or so years.

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trump has been one of the greatest gifts to China possible. Under trump the trade deficit exploded

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trump's much touted Phase One trade deal allowed China $200 billion in unfulfilled purchases of US products.

Biden has promised to get US western allies together and use trade alliances, trade agreements:

"In concrete terms, this could mean forging more agreements on restricting the use of Chinese technology, like Huawei. It could mean creating economic alliances that invest in developing countries only if they agree to respect intellectual property and human rights — and trying to isolate China in the process.

The larger goal will be making other countries believe that the U.S. is no longer going it alone. “The narrative in Asia,” Michael Green of the Center for Strategic and International Studies, told me, “is that America is out of the game.”

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The long term still needs to include buying more (yes, more expensive) US-made stuff as well. If nothing else, it increases our national resilience. If we'd had more US-made PPE available, we would have been better set up for the pandemic.

It's more expensive sometimes, but the third world doesn't need your cheaply-made last season's clothes (they have plenty of their own). The fact that we measure our national growth based on on the amount of crap we purchase is a good indication of the short-sightedness of trying to measure everything with simple, "effective" measures. (spoken like a former LSS Black Belt, trained specifically to find those simple, "effective" measures ;P)

Wendy P.

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1 hour ago, wmw999 said:

The long term still needs to include buying more (yes, more expensive) US-made stuff as well. If nothing else, it increases our national resilience. If we'd had more US-made PPE available, we would have been better set up for the pandemic.

 

Wendy P.

Always assuming that US made stuff is available at any price.  Just about everything manufactured has been outsourced to  increase shareholder profits and CEO stock option value.

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1 hour ago, wmw999 said:

The fact that we measure our national growth based on on the amount of crap we purchase is a good indication of the short-sightedness of trying to measure everything with simple, "effective" measures.

I would also add that an even more fundamental problem is that, to us, "success"="growth."  It assumes that everything, from resources to energy to places to put our waste, will expand exponentially forever.  There are obvious problems with this.

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1 minute ago, billvon said:

I would also add that an even more fundamental problem is that, to us, "success"="growth."  It assumes that everything, from resources to energy to places to put our waste, will expand exponentially forever.  There are obvious problems with this.

Not a problem for the mathematically challenged.

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1 hour ago, wmw999 said:

The long term still needs to include buying more (yes, more expensive) US-made stuff as well. If nothing else, it increases our national resilience. If we'd had more US-made PPE available, we would have been better set up for the pandemic.

It's hard to see how it could be practical to have small amounts of capacity of all the things that come from the outside "just in case". That is the nature of the world we live in with all the things that make life easier. Not even "Fortress America" could maintain the lifestyles you are used to. Not that you could not become self sufficient, but there are few who would choose the level of sacrifice needed.

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52 minutes ago, billvon said:

I would also add that an even more fundamental problem is that, to us, "success"="growth."  It assumes that everything, from resources to energy to places to put our waste, will expand exponentially forever.  There are obvious problems with this.

Hi Bill,

Re:  "success"="growth." 

I do believe that is what Keynesian Economics is based on.  Continual expansion is not sustainable on a finite planet.

Jerry Baumchen

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4 hours ago, kallend said:

Yes, taking the long view instead of just being concerned with the next quarter's profits has turned out so poorly for China over the past 40 or so years.

Smell the coffee, John. By making deals with failing states, run by corrupt and incompetent kleptocrats, China is now the de facto owner of much of Africa's mineral resources. Normally I couldn't care less except that many of those resources (like Zambian copper) are needed by countries other than China. The Chinese already have a bad habit (among many) of keeping the chips for themselves. Critical resources with enormous strategic value are at stake. Cornering markets, then creating artificial shortages to drive up prices? China Inc. is its own cartel, and the rest of the industrialized world stands to be jerked around.

The good part is that they'll only be able to get away with it for so long before there are revolts and lots of dead Chinese, like Congo in the 1960s. And you're right. They're definitely taking the long view. Fortunately, it's blinding them to the short view.

Edited by Guest

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55 minutes ago, markharju said:

Smell the coffee, John. By making deals with failing states, run by corrupt and incompetent kleptocrats, China is now the de facto owner of much of Africa's mineral resources. Normally I couldn't care less except that many of those resources (like Zambian copper) are needed by countries other than China. The Chinese already have a bad habit (among many) of keeping the chips for themselves. Critical resources with enormous strategic value are at stake. Cornering markets, then creating artificial shortages to drive up prices? China Inc. is its own cartel, and the rest of the industrialized world stands to be jerked around.

The good part is that they'll only be able to get away with it for so long before there are revolts and lots of dead Chinese, like Congo in the 1960s. And you're right. They're definitely taking the long view. Fortunately, it's blinding them to the short view.

Sooner or later you should tire of yelling fire without facts.

"Chinese companies are far from taking control over African or global mining. In 2018, they control less than 7% of the value of total African mine production. Chinese investments in African mining of non-fuel minerals between 1995 and 2018 have contributed to production growth but it has also increased Chinese control over African mineral and metal production. There is evidence pointing to a continued Chinese expansion in African minerals and metals but at a slower pace than in the past decade. Through a detailed analysis of every mine, fully or partially controlled by Chinese interest in Africa and all other parts of the world the paper also measures total Chinese control over global mine production to be around 3% of the total value."

Above from Mineral Economics 22 July 2020

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11 minutes ago, Phil1111 said:

Sooner or later you should tire of yelling fire without facts.

The Chinese threaten America and the west. Yelling fire now may scare them off before the Yuan takes over as the world's dominant currency. You should also be aware that Canadian companies account for nearly half of the world's mining companies. We are working hard to keep China from owning all the copper.

Edited by gowlerk

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12 minutes ago, gowlerk said:

The Chinese threaten America and the west. Yelling fire now may scare them off before the Yuan takes over as the world's dominant currency. You should also be aware that Canadian companies account for nearly half of the world's mining companies. We are working hard to keep China from owning all the copper.

China has 37% of the world's reserves of lanthanide metals (aka "rare earths").

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11 minutes ago, kallend said:

China has 37% of the world's reserves of lanthanide metals (aka "rare earths").

And between 80 and 90% of the output of them. But there is plenty enough to go around in the world if China decides they don't want that income any longer. 

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1 hour ago, markharju said:

Smell the coffee, John. By making deals with failing states, run by corrupt and incompetent kleptocrats, China is now the de facto owner of much of Africa's mineral resources. Normally I couldn't care less except that many of those resources (like Zambian copper) are needed by countries other than China. The Chinese already have a bad habit (among many) of keeping the chips for themselves. Critical resources with enormous strategic value are at stake. Cornering markets, then creating artificial shortages to drive up prices? China Inc. is its own cartel, and the rest of the industrialized world stands to be jerked around.

The good part is that they'll only be able to get away with it for so long before there are revolts and lots of dead Chinese, like Congo in the 1960s. And you're right. They're definitely taking the long view. Fortunately, it's blinding them to the short view.

So you’re basically arguing they are the 21st century version of the 19th century British Empire, effectively.  
 

OK.  Yep.   Most likely.  Given the ways we have over-exerted ourselves abroad and have a crippling and absurd military budget, we can’t - and shouldn’t - do anything about it unilaterally.  
 

So that leaves collective and collaborative action.  Not America First, but taking a smart eye to building alliances.  Alliances require collaboration and mutual interest.  Von Clausewitz’s  Real Politik.  Subtle, nuanced, planned thought.  
 

So in this respect, I’m glad that we won’t have the current Administration much longer. 

Edited by Skwrl

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30 minutes ago, gowlerk said:

The Chinese threaten America and the west. Yelling fire now may scare them off before the Yuan takes over as the world's dominant currency. You should also be aware that Canadian companies account for nearly half of the world's mining companies. We are working hard to keep China from owning all the copper.

Nationalization of mines, export taxes, unionization of labor have all be used before to deal with colonial or foreign ownership issues. They can be used again.

List of largest mining companies by revenue

China Shenhua, is a coal company along with #7,#9,#10 are all coal companies.

Lists of countries by mineral production

Leading mining countries worldwide in 2016, based on mineral production value (in billion U.S. dollars)*

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2 hours ago, markharju said:

The good part is that they'll only be able to get away with it for so long before there are revolts and lots of dead Chinese, like Congo in the 1960s. 

You sure do predict a lot of violent revolutions in our near future........

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15 hours ago, gowlerk said:

And between 80 and 90% of the output of them. But there is plenty enough to go around in the world if China decides they don't want that income any longer. 

It has been my understanding up until now that rare earths are everywhere but that only China has thus far been willing to take the huge environmental hits which are required in order to extract them. An article I read years ago about this topic was accompanied by a photo of an immense lake of toxic waste somewhere in the Chinese interior. Do you remember seeing anything about that?

Edited by Guest

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