Wednesday, September 12, 2018

Vox Popoli: Financial colonialism - How China is playing the usury card in the national interest

The difference is that China is playing the usury card in the national interest, whereas in the West, it is customarily played against the national interest:

Chinese President Xi Jinping on Monday pledged $60 billion in financing for projects in Africa in the form of assistance, investment and loans, as China furthers efforts to link the continent's economic prospects to its own.

Speaking to a gathering of African leaders in Beijing, Mr Xi said the figure includes $15 billion in grants, interest-free loans and concessional loans, $20 billion in credit lines, $10 billion for "development financing" and $5 billion to buy imports from Africa. In addition, he said China will encourage companies to invest at least $10 billion in Africa over the next three years.

China's outreach to Africa aims to build trade, investment and political ties with a continent often seen as overlooked by the US and other Western nations. That has provided lucrative opportunities for Chinese businesses, while African nations are often happy to accept China's offers that come without demands for safeguards against corruption, waste and environmental damage.

President Xi told African leaders that China's investments on the continent have "no political strings attached".

They don't. What's going to happen is that when the loans first default, they'll be extended. When the African nations default the second time, China will take the collateral. It's a subtle and inexpensive way to acquire material resources while posing as a benefactor instead of a predator.

James Burnham's 1965 concerns about the retreat of the West are proving to be prophetic.