China, the New World Banker (II)


China, the New World Banker (II)


Written by Alfonso Elizondo


In July 2014 the NBD (New Development Bank) was created by the BRICS (Brazil, Russia, India, China and South Africa) as an alternative to the World Bank and the IMF (International Monetary Fund) and they are now a group of heavyweight countries on the international scene. Along the same lines is the AIIB (Asian Infrastructure Investment Bank) which is an alternative to the ADB (Asian Development Bank) led by Japan and the World Bank, and its mission is to work for economic and social development globally by investing in sustainable infrastructure and in other productive sectors.

Along this same line, an association of countries was created in Beijing in 2016, and today it has 87 members, transportation and energy production infrastructure, such as dams, hydroelectric power plants, gas pipelines and urban settlements. For now, its investments are much less than those of the ADB, but they are growing rapidly.

Finally, the fund that finances the ‘One Belt, One Road’ project was created in 2014 when the Chinese noticed that to transport raw materials and manufactured goods they had to restore the Old Silk Road as well as part of the investments that would facilitate links with South Asia and with the rest of the world.

On the one hand, the route would include continental passage to Amsterdam through Central Asia, and on the other hand, there would be a sea route that would reach Venice from Southeast Asia and the East African coast. This route has led to the strategic linking of many Eurasian countries with China.

Some experts in geopolitics define it as a new colonization since China is not working on the project altruistically but benefits from the right to exploit resources and lends money that returns interest with which the young unemployed population can be sent to work all over the world. On the other side, the developing countries that receive the investments and loans are happy because they can carry out electorally beneficial work without the donor setting political conditions of any kind.

At the end of the day, price competitiveness makes China the main trading partner of most countries worldwide today. Although it may seem like an underhand method, the ultimate truth is that the geostrategic relationships of all countries in the world may define the foreign policy of all States.

So in China, labor force participation is around 70% and the unemployment rate has not reached 5% in the last 17 years. On the other hand, the phenomenon of migration from rural to urban areas jeopardizes the ability to respond to the demand for work. In 2000, China’s urban population was 35.87% of the total, while in 2017 it reached 57.9%.

The Chinese government was proactive and at the beginning of the millennium it created a strategy to encourage migration facilitated by investment in infrastructure abroad. In addition, in the poorer regions of China there are migration agencies that ensure that people from the same region are assigned to the same country. This facilitates the integration of newcomers into a homogeneous community in terms of ethnic group and language. In addition, China benefits greatly from remittances and the entrepreneurial initiatives of those who return to their country with enough savings to start their own businesses.

In Africa, the Chinese have also constructed all kinds of buildings and infrastructure, ranging from football stadiums, hospitals, roads, railroads, etc. and the majority have been with Chinese labor. This is born of the will – shared by all Chinese – to become once again the leading world power, since they view the development of the family, business and the country as intrinsically linked to the individual, so the success of a country will in fact be individual success.

In 2017 it was estimated that in Zambia there were 100,000 Chinese working and living illegally. The result is that African citizens do not benefit from the jobs generated by investment in infrastructure, but the ones who certainly benefit are the Chinese who are forced to leave their homes to find jobs and can save to open their own businesses when they return to China.

This has led to the displacement of France and the United Kingdom from this region and enabled China to control a trading partner with important natural reserves, with China getting 30% of the oil it imports from Africa.

 Addendum: With this information it could be assumed that China will soon be the nation controlling the whole world. But nothing can be predicted when there is a world leader who is a psychopath at the head of the United States government, added to a migration crisis in Europe and the Middle East like never before in the history of humanity, and climate change on the Planet that is also unlike anything since the Neolithic Age.