[HN Gopher] Thriving on China's Belt and Road, Laos border town ...
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Thriving on China's Belt and Road, Laos border town ditches kip for
yuan
Author : zinekeller
Score : 45 points
Date : 2022-11-27 17:49 UTC (5 hours ago)
(HTM) web link (asia.nikkei.com)
(TXT) w3m dump (asia.nikkei.com)
| rayiner wrote:
| The Belt and Road initiative is China's Marshall Plan for Asia
| and Africa. I don't think Americans realize the scale of Chinese
| money and engineering investment in these countries. It's a
| trillion dollar endeavor, six times as large as the Marshall Plan
| (in today's money). Like the Marshall Plan, it will help local
| economies develop. But I suspect it will lead to the same long
| term dependency and alignment with China that Europe has with
| America. I don't think that's necessarily a bad thing but it's
| something to be cognizant of.
| cactusplant7374 wrote:
| But how much corruption and how many failed projects? It has
| been particularly disastrous for Ecuador.
|
| https://www.nytimes.com/2018/12/24/world/americas/ecuador-ch...
| eliseumds wrote:
| Has it? Ecuador is doing relatively well overall. Decent
| infrastructure, growing exports, one of the most stable
| economies in Latin America. Their GDP grew ~6x since 2000.
| They took the risk and seem to be on a good development path.
| Would any other country have offered them loans on better
| terms? Doubt it.
| jitl wrote:
| I traveled from Kunming to Vientiane overland over a decade ago.
| At the time, the best way from Kunming to Laos was to take a
| sleeper bus to Luang Prabang. The roads were adequate on the
| China side of the border but unsafe in any kind of rain on the
| Laos side. On one Kunming--Luang Prabang trip to refresh my visa
| stay in China, I had to remain in LP for 3-4 extra days because
| the road washed out. This sort of thing was fairly regular so I
| was prepared, but still.
|
| In that context, the China-Laos railway is mind blowing. It
| sounds like it comes at a very steep cost to Laos. Never the
| less, it's an exciting development and I look forward to riding
| it north to Kunming once travel into China is less restricted by
| the zero COVID policy.
| bArray wrote:
| So the success story here is:
|
| > [..] the yuan is now its main currency of trade.
|
| 1. They lost their own currency.
|
| > [..] it is also increasingly populated by many from across the
| border hoping to benefit [..]
|
| 2. The 'investment' into the local area is actually being used to
| employ imported Chinese workers.
|
| > Jua, a 24-year-old truck driver, feels he has been "kept alive"
| by China. He is paid in yuan every month by a Chinese cargo
| owner.
|
| 3. Local businesses are being purchased or replaced with Chinese
| owners.
|
| When they fail to pay back some loans [0], they will be forced to
| hand over large strategic areas, such as their mining lands [1]
| on a 99 year lease. Over the next 10 years we will likely see the
| erosion of Laos sovereignty.
|
| [0] https://www.voanews.com/a/laos-faces-debt-crisis-after-
| borro...
|
| [1]
| https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(201...
| rfoo wrote:
| > employ imported Chinese workers
|
| Isn't what you quoted contradicted this? Jua is not a Chinese
| name.
| badrabbit wrote:
| Yes, Chinese workers but work still gets done. This isn't a
| developed nation, perhaps if the west is willing to do business
| your comment and sentiment has validity but sitting at Chinese
| workers and Chinese debt us better than sitting at a distance
| and pitying those poor people and occasionally tossing charity
| their way.
|
| Perhaps instead of criticizing China you should criticize the
| west for not besting China? Why isn't europe doing this,
| afterall they are the final destination of the belt road and
| they get a ton of stuff from China and can benefit to trade
| with the rest of asia? IMF and worldbank also hold a ton of
| debt on developing countries. I mean, I like to think I am the
| last person to support the CCP but bullshit is bullshit!
| Yeahsureok wrote:
| What happens when you fail to pay back loans to western
| companies? " _oh no worries, we 'll just write it off and you
| keep all your assets_"?
|
| This handwringing on stuff like this is fairly transparent.
| SR2Z wrote:
| Yes! Western companies are much more willing to do due
| diligence before issuing loans because they don't (at least
| these days) have an army to expropriate assets when their
| debtors default.
|
| This is an actual significant difference between China and
| the West: China is much more willing to invest in countries
| with less capable governments and relatively weaker rule of
| law because the Chinese state is underwriting the loans and
| has much more weight to throw around.
|
| There's a reason why US companies are much more reluctant to
| invest in developing nations.
| xyzzyz wrote:
| This is a reason, but there are other reasons too. For
| example, developing nations are often full of corrupt
| practices. This typically is not a huge problem for
| investors, you just pay a few bribes, it's a cost of doing
| business. What is a problem, though, is laws like Foreign
| Corrupt Practices Act, which makes it a crime for US
| investors to pay bribes in foreign countries. I'm quite
| sure that it feels very moral to ban that, and it totally
| had no protectionist intent whatsoever when it was passed,
| but the practical outcome is that if doing business in a
| country is impossible without paying a few bribes here and
| there (and it is in most poor countries, low trust in
| institutions is one of the reasons they are poorer than us
| in the first place), they will not get any foreign
| investment, which will keep them poor.
| bArray wrote:
| There is supposed to be due diligence on the issuing of
| loans, like a person getting a mortgage for a house, but for
| an entire Country. It is well known that the likes of Goldman
| Sachs, JP Morgan, etc, have been acting immorally in this
| regard. As far as I'm aware, Western loans are recouped
| through assets seizure, and there are large programmes in
| place to write off debt for those who would be perpetually
| bound by it.
|
| That said, the idea of a 99 year lease seems particularly
| troubling. It's essentially the time frame where everybody
| whom agreed to the arrangement will be long dead, and
| generations of people would have been raised not knowing the
| land was in fact leased. I suspect kicking people out of
| somewhere they have been for almost 100 years is not easy.
|
| Worse still is that the land acquired via the 99 year lease
| will be highly profitable land, with all profits and
| resources used for China's benefit. This further entraps the
| local Laos economy, where mining appears to make up major
| portion of their exports. Not only will they still be saddled
| with debt, they will now be less capable of repaying it.
| Someone wrote:
| All true, but I guess the Chinese will point to https://en.
| wikipedia.org/wiki/Convention_for_the_Extension_o...:
|
| _"In the wake of China 's defeat in the First Sino-
| Japanese War (1894-1895), the British took advantage of the
| other European powers' scramble to carve up the country and
| forced the treaty on the weakened Chinese government.
|
| Between 6 March and 8 April 1898, the German government
| forced the Qing Empire into a 99-year lease of the
| Kiautschou Bay concession for a coaling station around
| Jiaozhou Bay on the southern coast of the Shandong
| Peninsula, to support a German global naval presence in
| direct opposition to the British network of global naval
| bases. This initiated a series of similar lease treaties
| with other European powers. On 27 March 1898, the
| Convention for the Lease of the Liaotung Peninsula was
| signed between the Russian Empire and the Qing Empire,
| granting Russia a 25-year lease of Port Arthur and Dalian,
| to support Russia's Chinese Eastern Railway interests in
| Manchuria. Consequently on 28 March 1898, Britain, anxious
| of the Russian presence in China, pressured the Qing Empire
| into leasing of Weihaiwei, which had been captured by the
| Empire of Japan in the Battle of Weihaiwei, the last major
| battle of the First Sino-Japanese War, for as long as the
| Russians occupying Port Arthur, to make checks and balances
| of Russia. During the negotiation, the British stated that
| they would further request for leasing of land if any
| foreign concession took place in Southern China.
|
| On 10 April 1898, the French, who also desired Chinese
| territory, forced the Qing Empire into a 99-year lease of
| Kwang-Chou-Wan to France to support France in southern
| China and Indochina. In order to maintain the balance of
| powers, Britain ordered Claude Maxwell MacDonald to
| pressure Qing Empire into allowing the expansion of Hong
| Kong for 200 miles (320 km). As a result, the Convention
| for the Extension of Hong Kong Territory was signed on 9
| June 1898 in Beijing (Peking). The contract was signed to
| give the British full jurisdiction of the newly acquired
| land that was necessary to ensure proper military defence
| of the colony around the island. Some of the earliest
| proposals for the land's usage in 1894 included cemetery
| space, an exercise ground for British troops as well as
| land for development. From the British perspective concerns
| over security and territorial defence provided the major
| impetus for the agreement."_
|
| Over a century ago, but more forced upon them than this is
| upon Laos.
| michaelt wrote:
| _> That said, the idea of a 99 year lease seems
| particularly troubling._
|
| I wonder where they could have got that idea from [1]
|
| [1] https://en.wikipedia.org/wiki/Convention_for_the_Extens
| ion_o...
| kingo55 wrote:
| At least there is now precedent for breaking these
| contracts now too.
| rayiner wrote:
| The IMF and World Bank regularly forgive loans.
| yarg wrote:
| It's a Chinese invasion in slow motion. The same as Africa.
|
| One day, these people will wake up and realise that they're
| second class citizens in someone else's country.
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