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Italy Joins China's New Silk Road Project

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Re: Italy Joins China's New Silk Road Project

#101

Post by philwelch »

adventured wrote: post #95
seppin wrote: post #89

Earlier quoted context omitted.

Also, infrastructure does not lead to economic growth. Quite the other way around, really.

It's a sliding scale of return. If your infrastructure is already decent, you will see a terrible return on your investment, as in the case of Japan's debacle of decades of infrastructure investment that produced negative real growth (due to the debt vs growth generated). If you're China in 1980 or 1990 (ie third world infrastructure), vast infrastructure spend will faciliate your decades-long growth explosion. Witho…

China's mistake is actually a shining example of the failures of a centrally planned economy. Any reasonably competent person would know that China had to build infrastructure in 1980 and would have probably made similar economic planning decisions that the Chinese did. But even they are stuck in an infrastructure construction bubble in 2020 to the point that it's easier to waste resources building unnecessary infrastructure than to try to reallocate labor and capital and natural resources.

(See also: Stalinist industrialization. It was easier for central planners to focus on the hypothetical exponential impacts of "building machine tools to build machine tools", or to focus on building as many T-34 tanks as possible, than to actually design a self-sufficient war economy, which they never really had--there was a very strong reliance on imports of Allied food, radios, and other small goods.)

Re: Italy Joins China's New Silk Road Project

#102

Post by HillaryBriss »

cl42 wrote: post #7

> The European Union is also worried about unfair competition from Chinese companies, which are controlled by the Chinese government and benefit from the state’s financial backing. EU leaders in Brussels are preparing a strategy to counter the growing influence of China, which they describe as a “systemic rival.” Most of the Western articles I've read express concern over Italy's involvement in the BRI. However, I am…

one model for how it's going to work out is the US experience of stronger economic integration with China over the last 30 years. the EU should simply study in great detail the pros/cons of that history.

the analogy seems useful:

* China has the more united and disciplined central government, while the US had a more federalized, decentralized government, approximately like the EU.

* China has based its economic growth on exports, which is far less true of the US (and EU excluding Germany)

* China does not guarantee many (or any) economic rights to outsiders within its boundaries, whereas the US does. similarly the EU grants relatively strong rights, including government financial assistance and medical care, to outsiders within its boundaries

the simplest prediction is that it will turn out roughly the same way as it has for the US, and Germany, the EU zone's current main exporter, has the most to lose.

Re: Italy Joins China's New Silk Road Project

#103

Post by justicezyx »

screye wrote: post #76

The biggest problem with the BRI initiative as sold by China, is it puts money in the hand of the least trusted entity with developing economies. The Government. China for certain, knows that the optimistic promise of the BRI initiative will be met, and that they are trading long term debt with strong political influence. What happened in Srilanka should be a warning to any other country intending to enter BRI. There…

Was the oligarchy in those nations any better than their government?

Government at least is a more observable entity than oligarchy.

And let's not pretend uneducated citizens know any better to manage investment...

Re: Italy Joins China's New Silk Road Project

#104

Post by SamReidHughes »

bilbo0s wrote: post #73
eastendguy wrote: post #48

Earlier quoted context omitted.

Yes. That is my major concern. In fact, it has already happened! We have already Greece (with its China owned ports) blocking an EU statement: https://www.reuters.com/article/us-eu-un-rights/greece-block...

In fairness, from the perspective of the average Greek citizen, the EU thing hasn't worked out terribly well for their homeland. In the West what we need is to restructure our facilities such that if you participate you will prosper. We need for everyone to prosper. Not necessarily equally, but what happened to Greece went beyond simply not prospering as much as other nations. It was legitimately negatively impacted.…

We? Greece's prosperity is Greece's responsibility. That's where the buck stops.

Re: Italy Joins China's New Silk Road Project

#105

Post by Emma_Goldman »

Leary wrote: post #26

If the US wants to counter China's Belt and Road Project, it should offer a suitable alternative instead of merely talking about how it's debt trap diplomacy.

It is worth pointing out that there have been several responses. China dominates the US' defence strategy.

One of the centrepieces of Obama's foreign policy was a comprehensive 'pivot to Asia', and the trans-pacific partnership free trade agreement. In fact, many argue that the Belt and Road Initiative is a response to the efforts of the US to contain China.

More recently, the Trump administration has assigned $60bn to the 'Overseas Private Investment Corporation', a US government agency that will use to the funds to underwrite far larger sums of private capital, and invest it around the world.

It is a long-standing part of US grand strategy to use India to balance against China, which lines up with the fact that the biggest investments of the new Silk Road have been to Pakistan.

India, Japan and various African countries set up the 'Asia-Africa Growth Corridor' a couple of years ago, a direct rival to the Belt and Road Initiative.

Re: Italy Joins China's New Silk Road Project

#106

Post by zachguo »

throwawawua4234 wrote: post #16

Is there any knowledge on why East Asian Tiger economies do so well with state backing ? The major takeaway from the 'Princes of Yen' by Richard Werner is about how Japan soared from a destroyed country to an economic powerhouse, before being brought down by the bankers at the BOJ, ostensibly to change the system from a 'state backed economy' to a US-styled one. Ditto with the Asian tigers in Thailand, S Korea etc. S…

China has been doing central planning for more than two thousands of years. Japan and Korea copied the system.

Re: Italy Joins China's New Silk Road Project

#107

Post by eastendguy »

makomk wrote: post #98
bilbo0s wrote: post #73

Earlier quoted context omitted.

In fairness, from the perspective of the average Greek citizen, the EU thing hasn't worked out terribly well for their homeland. In the West what we need is to restructure our facilities such that if you participate you will prosper. We need for everyone to prosper. Not necessarily equally, but what happened to Greece went beyond simply not prospering as much as other nations. It was legitimately negatively impacted.…

Also, the whole reason Greek ports are owned by China in the first place is that Germany forced the Greek government to sell them off to the highest bidder as part of their great economic fucking-over of Greece. So it's hard to have a huge amount of sympathy if this causes headaches for the core EU states.

...or maybe the reason Greece does not have enough money is because rich Greek don't pay their taxes?

https://en.wikipedia.org/wiki/Corruption_in_Greece#Lagarde_l...

Re: Italy Joins China's New Silk Road Project

#108

Post by Emma_Goldman »

dmix wrote: post #62
coliveira wrote: post #57

China is doing what is a great advancement for the world: integrating east and west, and in the process bringing the long forgotten areas in the middle east into the world trading order. The more investment in the Silk road, the more we will have a robust economic system integrating countries that until now were forgotten by the previous world order.

They weren't 'forgotten' they were made irrelevant through technology (airplanes, shipping containers, etc) and geo-political trends (the fall of the ottoman empire). As great as it sounds on paper there are quite a few economists who are skeptical about the ROI from all of these investments. But I do like how bold it is, which you rarely find in western countries (large scale infrastructure projects). They can barel…

'There are quite a few economists who are skeptical about the ROI from all of these investments'.

Yes but the BRI is not designed solely for economic gain, but to lay the basis of a new Sino-centric order.

The closest comparison is with the Marshall plan. The US spent huge sums to rebuild Western Europe, countries that by the 1970s began to undercut the US economy. But it was essential to the post-war US order, the defeat of Soviet Union, and other long-range strategic goals.

Re: Italy Joins China's New Silk Road Project

#109

Post by buboard »

ardy42 wrote: post #32

> "The seemingly innocuous move comes at a sensitive time for Europe and the European Union, where there is suddenly a great deal of trepidation not only about China, but about working out how Europe or the EU should adapt and react to a changing world," Prof Frankopan told the BBC. Forgive my ignorance, but aren't many EU decisions required to be unanimous? So if China has close ties to Italy, could it use it's infl…

Sounds fitting, since a lot of the blame here goes to germany who, despite big surpluses, did not invest in the south the way the chinese do

Re: Italy Joins China's New Silk Road Project

#110

Post by BurningFrog »

makomk wrote: post #98
bilbo0s wrote: post #73

Earlier quoted context omitted.

In fairness, from the perspective of the average Greek citizen, the EU thing hasn't worked out terribly well for their homeland. In the West what we need is to restructure our facilities such that if you participate you will prosper. We need for everyone to prosper. Not necessarily equally, but what happened to Greece went beyond simply not prospering as much as other nations. It was legitimately negatively impacted.…

Also, the whole reason Greek ports are owned by China in the first place is that Germany forced the Greek government to sell them off to the highest bidder as part of their great economic fucking-over of Greece. So it's hard to have a huge amount of sympathy if this causes headaches for the core EU states.

Germany only "forced" Greece in the sense that they didn't pay Greece's debts for them.
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