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How China's “debt traps” work

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Re: How China's “debt traps” work

#41

Post by jhp123 »

sickofparadox wrote: post #15
hackandthink wrote: post #10

"David Graeber: Oh, absolutely. After all, the alter-globalization movement grew out of a broad global reaction to the Washington consensus, which was never any sort of consensus, but rather, a vision of the world forcibly imposed on the global South through the third world debt crisis. I was involved in “drop the debt” campaigns of various sorts since at least 2000. What got me interested in some of the philosophica…

Of course, the US is widely known for repossessing airports[1], seaports[2], and railways[3], then displacing local workers by flying in your own people. That totally happens all the time - its just that US biased media hiding it from you. The era of this kind of lazy anti-Westernism is over, China is only out for itself, and it will drag countries into its sphere of influence any way it can. "But what about this ame…

US Imperialism is even more brazen than that. Here's a video of the US President commenting on how US troops are in Syria "only for the oil": https://www.youtube.com/watch?v=U10p3Tn9V5Y

Re: How China's “debt traps” work

#42

Post by paxys »

nradov wrote: post #35
neilwilson wrote: post #32

The problem with listening to economists is that if your only tool is interest rates everything looks like a loan. No sovereign nation should be borrowing from anywhere other than itself. Instead firms should be selling equity denominated in the local currency for foreign currency - where they need foreign imported capital equipment. If nobody wants to invest on those terms then you have to build the equipment yourse…

Small, poor countries have no practical way to bootstrap and build equipment themselves. That might have worked in the 18th century but not today. Loans are patient money. As long as the borrower pays as agreed then they can do as they please. Whether the original lender holds the asset to maturity or sells it on to another investor makes no difference. Most of the high profile failures with foreign investment stem f…

It didn't work in the 18th century either. Poor nations mostly entered the industrial age through colonialism rather than indigenous enterprise. The moment powerful nations could build ships and cross oceans, it was game over for the rest of the world.

Re: How China's “debt traps” work

#43

Post by stale2002 »

pphysch wrote: post #25

For those who are curious about a serious analysis of China's foreign development policies, rather than a misinformational blog post: https://www.chathamhouse.org/2020/08/debunking-myth-debt-tra... That one is from 2020 but there are a lot of serious people looking at these complex issues.

> That one is from 2020

Then it is outdated.

The new information related to the belt and road project's failures has only started to come up in the last couple years.

I can understand why someone who doesn't have the updated information, based on recent economic data, would have a more nuanced view.

But we have the new information now.

Re: How China's “debt traps” work

#44

Post by bparsons »

bpolverini wrote: post #33
hackandthink wrote: post #10

"David Graeber: Oh, absolutely. After all, the alter-globalization movement grew out of a broad global reaction to the Washington consensus, which was never any sort of consensus, but rather, a vision of the world forcibly imposed on the global South through the third world debt crisis. I was involved in “drop the debt” campaigns of various sorts since at least 2000. What got me interested in some of the philosophica…

The Government already has a monopoly on force and steals our money under the threat of imprisonment in the form of taxation: Now that money is supposed to be allocated into risky investments for abstract, unmeasureable benefits like "soft power," for the benefit of people somewhere else? That creates resentment here. It also infantilizes the Global South. How much better would it be if we eliminated the IMF, shrank…

Nature abhors a vacuum. If western countries are not setting up credit facilities, someone else will.

It might be predatory private entities looking to get their hands on state assets, or it might be the Saudis or Chinese looking to exert more political power.

If we want to seal ourselves off from most of the world and stop trading or participating in regional security arrangements, then this is a reasonable approach.

I think people underestimate how much of our material wealth in the west is reliant on these trade and security arrangements.

Countries like the United States can pursue a North Korean model and try to produce everything domestically, but the standard of living is going to plummet.

Re: How China's “debt traps” work

#45

Post by username332211 »

teachrdan wrote: post #20
sickofparadox wrote: post #15

Earlier quoted context omitted.

Of course, the US is widely known for repossessing airports[1], seaports[2], and railways[3], then displacing local workers by flying in your own people. That totally happens all the time - its just that US biased media hiding it from you. The era of this kind of lazy anti-Westernism is over, China is only out for itself, and it will drag countries into its sphere of influence any way it can. "But what about this ame…

This is a very humorous comment for you to have made. OP posted a quote from David Graeber that precedes China's Belt-and-Road plans by years. Graeber was instead writing about the West's use of debt to further exploit the global south, and how debt has long had a supposed moral dimension that makes renegotiating it (in the literal and metaphorical sense) exceedingly difficult. As someone who sporadically did politic…

I don't see how you can drag someone's credentials to prove he isn't a useful idiot. Malcolm Caldwell, famous for being the very embodiment of a useful idiot was a research fellow at UCL.

Other defenders of the Red Khmers had even more impressive credentials. Need I remind you who was the writer of "Distortions at Fourth Hand" and "Manufacturing Consent"?

By definition, all useful idiots have impressive credentials. Without credentials, they are not useful.

Re: How China's “debt traps” work

#46

Post by oceanplexian »

andrepd wrote: post #37
bpolverini wrote: post #33

Earlier quoted context omitted.

The Government already has a monopoly on force and steals our money under the threat of imprisonment in the form of taxation: Now that money is supposed to be allocated into risky investments for abstract, unmeasureable benefits like "soft power," for the benefit of people somewhere else? That creates resentment here. It also infantilizes the Global South. How much better would it be if we eliminated the IMF, shrank…

The view that "you have _your_ money and then the government takes it away from you" ignores that without the society that you are inserted in, the very concept of money would be meaningless. More accurate to say is that part of the social contract for participating in a society that enables you to """make""" that money is that you have a pay a "fee", i.e. taxes (among other things, e.g. abiding by laws which are dem…

Sure, there are some beneficial things that the government does. Like roads, police, fire, regulatory agencies; all the usual things that are cited as "We live in a society" line items. But those things are a tiny minority of government spending.

The VAST majority of the federal budget goes to entitlements. Another massive chunk goes to paying interest on debt because we spent money we didn't have on entitlements. An similarly large chunk goes to defense (Which you could make an argument for, except the VAST majority of which is not actually used for defense, but intervening in far away conflicts)

So going back to all the "society" items, well, the roads, infrastructure electricity, basic services, police, clean water, airports; all the stuff you really need for a society: They're a tiny, minute sliver of the money the government takes from us on a regular basis. You could reduce taxes by 90% and still provide everything you need from a functional society without the parasitic drain on the economy.

Re: How China's “debt traps” work

#47

Post by UncleSlacky »

preciousoo wrote: post #27
pphysch wrote: post #25

For those who are curious about a serious analysis of China's foreign development policies, rather than a misinformational blog post: https://www.chathamhouse.org/2020/08/debunking-myth-debt-tra... That one is from 2020 but there are a lot of serious people looking at these complex issues.

“As a Kenyan official put it: Every time China visits we get a hospital, every time Britain visits we get a lecture.”

Which led to this classic exchange: https://twitter.com/stillreezy/status/1507445282778206209

Re: How China's “debt traps” work

#48

Post by csomar »

I've recently rode through a Belt&Road project: The Lao high-speed train. In my opinion, it shows the complete failure of the Chinese government. The high-speed train is a reasonably great train that goes through dozens (hundreds?) of mountains and rivers (through tunnels and bridges). It does that while enabling you to work from the comfort of your chair. And while it's not high-speed (as in 300Km/h), it is reasonably fast.

The train station locations, however, are just non-sense. This is because they are too far, and for many stations, there is no "road" to connect to the city. Couple that with the retarded system they have to check-in which requires you to be in the station one hour before your train departs and suddenly a 40 minutes ride becomes a 2.5 hours ride. Might as well just use a regular bus?

In my opinion, the Chinese government is still living in the 80s (along with 80s technology). The Chinese economy (or parts of China) is living in a parallel reality with companies that are quite developed if not world-class. This means the Chinese government can "execute" quite advanced projects while being a peasant itself.

It's not clear what's sustaining the central government in China, or what's the level of discontent in the productive provinces.

Re: How China's “debt traps” work

#49

Post by dash2 »

neilwilson wrote: post #32

The problem with listening to economists is that if your only tool is interest rates everything looks like a loan. No sovereign nation should be borrowing from anywhere other than itself. Instead firms should be selling equity denominated in the local currency for foreign currency - where they need foreign imported capital equipment. If nobody wants to invest on those terms then you have to build the equipment yourse…

The problem with not listening to economists is that you then suggest policies which economic history reveals are seriously flawed. Why are foreign investors likely to accept shares in your business denominated in, say, Rupiyah? Especially if it can't be "hot money", which implies they won't be able to resell it. As for building the equipment yourself: are you kidding? This kind of import-substitution failed spectacularly all over the developing world in the 1950s.

I find it weird. Nobody would listen to me pontificating about how to design a microkernel and talking about "the problem with programmers".

Re: How China's “debt traps” work

#50

Post by vkou »

teachrdan wrote: post #20
sickofparadox wrote: post #15

Earlier quoted context omitted.

Of course, the US is widely known for repossessing airports[1], seaports[2], and railways[3], then displacing local workers by flying in your own people. That totally happens all the time - its just that US biased media hiding it from you. The era of this kind of lazy anti-Westernism is over, China is only out for itself, and it will drag countries into its sphere of influence any way it can. "But what about this ame…

This is a very humorous comment for you to have made. OP posted a quote from David Graeber that precedes China's Belt-and-Road plans by years. Graeber was instead writing about the West's use of debt to further exploit the global south, and how debt has long had a supposed moral dimension that makes renegotiating it (in the literal and metaphorical sense) exceedingly difficult. As someone who sporadically did politic…

> How you have determined he was a "foreign agent or useful idiot" is curious.

That's easy. Generally speaking, anyone who is critical of empire-building is seen by that empire's apparatchiks as a "foreign agent or useful idiot."

The criticism doesn't come from any position of principle, it's just us-versus-them tribalism.

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