12 months ago in Sihanouk(ville) in Cambodia I was astounded by the amount of Chinese development. Rent had increased 10 fold, with something like 30 Chinese Casino's being built as well as heaps of accomodation. Unfortunately this doesn't help the local economy much, forcing the locals out due to price increases, and Chinese development companies bringing over their own Chinese workers.
>Chinese development companies bringing over their own Chinese workers
The same pattern in Africa, development projects staffed by Chinese workers in segregated company run communities.
They built a train line in Africa, had a big opening day ceremony with a local running the train. After that day... the local guy never ran the train again.
Like the one built with Chinese money in Kenya? It's so under-utilized that the government passed a law that certain types of cargo has to be transported by rail, even though trucks are cheaper. In some cases that means merchants in Mombassa have to load goods arriving in the port on rail cars, send it to Nairobi, then bring it back again.
Belt and road is costing the Chinese a fortune and it seems they're beginning to realise a lot of it is being wasted. They recently refused to fund a planned extension of the railway in Kenya. There has been a lot of fuss about the port in Sri Lanka that was repossessed by China, and theories that this is a deliberate strategy. That doesn't look like it's actually the case, so far it's the only example of that happening.
I'm not an economist, but, I can imagine that it's under-utilized because the local economy isn't yet at the level it was designed for?
China doesn't seem to have any qualms with that kind of development though. I recall a tour through a city and an international airport, huge 20 lane superhighway with... just nobody using it. Ghost towns. Empty supermalls with maybe one or two shops open.
It's all investments, it's putting investor money in real estate, gambling on economy and population growth to necessitate use of the real estate and infrastructure, thus increasing the price / value of the real estate.
China has been growing so fast for so long that the people from there may have unrealistically high expectations and risk tolerance for the results of their infrastructure projects at home and abroad. I'd imagine a lot of people there have FOMO over not investing in Shenzhen or other cities that popped up over night that they've gone crazy to build out the next successful city.
No. The Chinese government and its state owned enterprises are lending piles of money to fund infrastructure projects no one else will touch. In some cases that’s because they don’t care about environmental impact statements, involving local communities or dealing with dictatorial governments but mostly it’s because they’re offering more money than the World Bank and other international financial institutions or large institutional investors. Those investors and the IFIs have decades of experience doing these kinds of development projects. They don’t do the ones China is doing because mostly because they can’t see a return. So China’s lending money to people who won’t be able to hold up their end of the deal. China might think that they’ll come out ahead on taking over as the projects’ owners but they don’t see how politically toxic this will be. China may not care if they’re viewed as a threat, a bully and a new colonial power but that’s likely to be the end result of many of these loans. The money would have been far better spent on investments within China, where there are still plenty of desperately poor people.
The Belt and Road Initiative is going to go down in history as a colossal white elephant, an extension of the domestic Chinese model of
“Let's borrow a ton of money to spend on infrastructure and keep doing it forever to pump up the economy.”
to other countries.
Thing is, even governments need to pay off loans eventually, whether in hard currency or in wrenching economic adjustment when the bubble finally pops. China hasn’t had a real economic downturn since Deng opened China up in the 80s. When it happens it’s going to be bad.
You summed it up really well. I haven't seen China referenced as a colonizer yet, but it does fits the bill with it's accidentally/specially designed debt traps.
There is not much political leverage to be gained by building a port named after the current president [1], if he then loses the next elections and his successor decides to pay the debt by handing them the port.
Gaining that real estate might look like a win for China, except of course now they're stuck operating it for very little profit. (Certainly less profit than the interest on the loan was planned to be, since otherwise the Sri Lankan government would've just repaid it.)
Many Chinese infrastructure projects in other countries appear irrational if you consider the Chinese government as a single actor. However, they become rational if you consider that they are a way to turn money from the coffers of the Chinese state into foreign currency in the hands of a Chinese construction company. Some of that money will certainly find its way back into the pockets of the decision makers approving the project.
My impression of what China is doing with the whole BRI is to colonize Africa and bring it under their sphere of influence.
It appears to me that in another decade everyone will be shocked that the Great Firewall encompasses large portions of Africa and Asia. Additionally everyone will be surprised that a lot of manufacturing has become too expensive domestically in China and is now outsourced to Africa.
I think "colonize" is way too crude, but "bring it under their sphere of influence" is probably correct.
And there is nothing wrong with a powerful country winning influence by helping out poorer nations around the world. The US did it with the Marshall Plan, and it was a good thing for everyone involved.
I'd argue "location, location, location" particularly as a long-play aspect.
In 30 years, when your economy finally catches fire and is growing 20% year-over-year, the best possible port/airport/railway locations were long ago sold to China.
Colonialism is ultimately self defeating, as European powers found out with time.
The elites of a nation push for it because it gives them a chance to make a lot of money off exploiting both the colony and the government funding infrastructure.
However in the end it becomes a bottomless pit for money in sum for a nation, and in the end you cant hold onto what you tried to control anyways, because the harder you try, the more and more resentment builds up until you are forced out.
And it dosen't sound like the Chinese are too interested in making friends, more in making underhanded deals that hand them control over critical resources.
> Colonialism is ultimately self defeating, as European powers found out with time.
They found out it was untenable to continue being that cruel in the face of a populace that now wanted very slightly less obvious cruelty. I have never seen a compelling argument being made that it was about money, as domestic slavery and other forms of exploitation of people you basically own is always going to be nice and profitable.
Germany for instance had no colonies of any real consequence, and neither did Russia or Italy, yet all were majorly powerful nations, on par with a colonial empire that owned 25% of the planet, and another that owned almost as much (Britain and France).
If colonies were capable of providing wealth and economic power at scale, the UK alone would have been vastly more powerful than all 3 aforementioned nations combined. In fact you can make a reasonably persuasive argument that the UK's laser focus on colonialism rather than native industry was directly responsible for Germany's rise to begin with. The UK was far more interested in pouring economic resources into colonial ventures (especially in India), which in the end didn't yield net gains, while Germany went from a patchwork network of independent, mostly underdeveloped state, to a world superpower in less than 50 years through obsessive focus on industrial development. Plenty of British industrialists and inventors found a far more receptive audience in Germany after their attempts to raise funding at home were ignored. The German chemical industry largely owed its origins to this for instance.
There is also plenty of argument to be made that slavery as a purely economic concern is far less efficient and profitable in the long run than free men doing the same jobs.[2]
Again, its something that's very profitable for elites, but it is a handicap for a nation as a whole.
The source that you quote here has a lot of "may be" and "some analyses indicate that", which tells us both that in fact the source is not certain about it's impact. It does start out with a couple of hard facts about how profitable it was for the slave owners themselves, which is then the only hard fact in the whole piece. If anything, it proves my point about profitability.
Germany's industrial power is a separate issue that is directly attributable to one or two major historical events that have absolutely nothing to do with colonialism. Suffice it to say that it doesn't compare, because few other countries have gone through a similar process.
It's hard to tell now, but Belt and Road seems mostly like a gigantic waste.
Still, if China squanders its wealth by giving away infrastructure to the world, while the US squanders its wealth by bombing the world, I think China is winning.
No, that is Africa, where the train line is. Have you ever visited Africa and have seen how they live now? To be honest I don't understand why the west is not building roads and rails in Africa. It's only natural that someone would want to catch that opportunity, and in our world it's the Chinese - the Africans are thankful to whoever does it, because for many of them it is literally matter of life and death.
> To be honest I don't understand why the west is not building roads and rails in Africa
They are. That's called "International Development". What's unusual is how much China is paying out as a proportion of their national income[0], how much they're willing to turn a blind eye to giving unpleasant people and regimes money, and how willing they are to ignore problems that their development will cause in terms of debt traps. In essence, most rich country International Development programs to date have tried to have at least a semblance of doing the right thing rather than just being completely naked influence and power grabs. As noted elsewhere in this thread, it seems there's great potential for this to blow up in the faces of the Chinese, but we'll see!
It reminds me of banana republics. United fruit wanted to grow bananas, there was no infrastructure so they built rail lines and improved ports. But people always think of United Fruit as parasitic rather than symbiotic.
So on the whole it is a benefit to locals, but depending on how things were financed and who is responsible for what, it could end up being a negative.
I haven't lived in those times but in British colonies, virtually all positions of power and money were reserved for the people from Britain. You could be Mr. Nobody in Worcester, go to India and suddenly turn in to upper class tax officer with bungalow and half dozen servants taking care of your property. On the other hand, a person of Indian origin could have spent large sums of family wealth to get educated in Oxford and have to settle for some lowly clerk when they come back regardless of how well they did. Many freedom movements were actually started by these England-educated Indian people who realized there was no place for meritocracy in British colonies when they came back.
It's worth bearing in mind that the definition of "people from Britain" was probably rather different from the one we'd use today - at least for the lower-end jobs. For example, some of my own ancestors had rather well-paid jobs working on the Indian railways prior to independence that were probably the result of their British status. They'd also lived there for generations and were, by Western racial standards, Indian.
(No-one from that branch of the family lives in India anymore. Things got rather ugly when independence happened.)
I couldn't tell you what the British did in detail although their companies certainly were paid to build railroads for other nations.... but that's just a matter of the engineering / railroad expertise not being there. That aspect I think is unavoidable.
> their companies certainly were paid to build railroads for other nations
To be precise, the first railways in India were paid for by local British magnates / companies, e.g. to transport materials for other construction projects. From 1849 British companies still paid to build the railways themselves but they were given the land for free and guaranteed a 5% rate of return [0].
I have worked in many overseas development projects run by Chinese companies. It's not that the Chinese companies only want to hire their own workers, but the fact that the local workforce do not have the skill/equipment/capital to handle large scale development projects.
Some countries require by law that the Chinese developers have a minimum number of local workers. This mitigates the problem somewhat and hopefully over time the locals will develop the skills to run their own projects.
In the long run, infrastructure investment benefits local communities and opens up more opportunities for the local workforce. It's almost always better to have the infrastructure built than not, earlier than later, and foreign money is a good source of capital for it.
> It's not that the Chinese companies only want to hire their own workers, but the fact that the local workforce do not have the skill/equipment/capital to handle large scale development projects.
I've often thought that but caught myself thinking I was just buying into the narrative - refreshing to hear it might be slightly less cynical than my brain would have me believe (though still undoubtedly to some degree). My assumption being the skillset to build a transnational highway and scalable mining infrastrcuture is different than doing those things at localised levels.
It really depends on what is being called "infrastructure" and how much the local government is extracting from the foreign governments that will benefit (and if those funds are redistributed to the benefit of the people obviously too).
> In the long run, infrastructure investment benefits local communities and opens up more opportunities for the local workforce. It's almost always better to have the infrastructure built than not, earlier than later, and foreign money is a good source of capital for it.
That's only true if the economy develops to a high enough level, fast enough, to afford to maintain the infrastructure being built that isn't actually natural to the present scale of the economy. That's a large assumption and the consequence of being wrong is disastrous for a poor country. Any time you try to force-leap a country forward, there are immense risks if the underlying economy doesn't keep up, and it won't be China that pays for it later on.
Since I live in Cambodia I'm not sure, but how much awareness is there elsewhere about the recent building collapse in Sihanoukville? I saw the BBC wrote some articles:
There are some shoddy-looking construction sites in Phnom Penh too, and precarious conditions for construction workers even on the more modern construction projects.
I was not aware of this at all but I am not surprised. It definitely seems like a race to finish, without much focus on anything else.
To get from Sihanoukville to where we were staying we had to take a main road that was constantly used by trucks getting to and from construction sites. It was a dirt road that had been torn to pieces, including major major potholes, diversions into oncoming traffic to avoid these, huge traffic jams due to this, and at one point the powerlines had collapsed across the road, and had been left there, running live with cars literally driving over them all day long. Definitely a huge accident waiting to happen.
The local infrastructure is just not able to sustain this level of development. And the unfortunate thing was, the development companies were not giving back enough to actually fix up the roads and other chaos they caused, so the locals end up worse off.
The roads are bad everywhere. There's really nothing resembling a highway in the entire country despite the massive development happening in Phnom Penh too. Tons of people die in road accidents because semi trucks, construction vehicles, buses, cars, motos, bicycles, pedestrians and animals all share the two lane "national roads". I have personally seen a lot of dead or dying people on the road here unfortunately.
I was there 10 years ago and 2 years ago. I describe it 2 years ago as if a tidal wave of chinese money hit the place. I am really quite glad I visited 10 years ago, it certainly wasn't a perfect place but it had a charm to it that's currently being annihilated, such is progress.
Manila is many things, but "charming" is not a common choice of adjective. Some bits of Intramuros aside, in my experience there's not a whole lot there between "shiny and new" and "slum".
So far this is a Manila-only phenomenon, isn't it? Manila is populous, but "annihilating" it would no more annihilate Philippines than annihilating NYC or LA would annihilate USA.
