Is China buying up the world?

by Justas Stankevičius:

After the decolonisation processes of the second half of the 20th century, one might get the wrong impression that imperialism has become obsolete, and that the word itself is only appropriate for the 19th century. However, imperialism isn’t based only on military means and conquest. In our time, imperialism is also expressed in the economic means used by giant powers such as China to dominate other countries and to extend their influence in them. 

Since the Communist revolution, China is the country that has become the world’s factory, and where the vast majority of goods of every kind are produced. But today’s China and post-revolutionary China are as different economically as night and day. Today, China is one of the world’s most important powers, and we can inarguably compare it economically with the United States of America. Today, China uses its earned capital to build the greatest possible power for China, not only in war-related industries, but also in the struggle for economic dominance. 

In 2013, the Chinese government signed a document known as the Belt and Road Initiative. This document is a development strategy that covers infrastructure development and investment in nearly 70 countries and international organisations in Asia, Europe and Africa, using subtly different but common approaches for each continent. Consider the results of this strategy in Africa and Europe. In Africa, China is financing large logistical projects, leaving a number of these countries heavily indebted. In Europe, local ports and other strategic assets are being nationalised by buying up their stakes. 

 Imperialism in Africa

“China and Africa will join forces to build a common Chinese-African community where mutually beneficial cooperation will ensure a happy and harmonious coexistence,” said Chinese President Xi Jiping (born 1953). The same rhetoric accompanies China’s “aid” and investment in Asia. However, the current record of cooperation between African and Asian countries makes one wonder whether such cooperation is only good for China itself.  

The small country of Sri Lanka currently has debts to China totalling USD 1.5 billion. This money was used to build a port, but the port project failed because the expected shipping commerce failed to materialize. The result is simple: when Sri Lanka was unable to make the loan payments, it agreed to lease the port to China for 99 years.

The situation is similar in Sudan, which received the largest share of the $60 billion package for African countries. Because, as in all cases, expectations exceed reality, Sudan is struggling to cope with the loan. As a form of restitution, China controls 75% of the country’s oil industry.

The scenario applies to another country, the Republic of Congo. Congo’s total debts to China are currently as high as USD 7.1 billion. The country has the distinction of being one of the largest copper producers in Africa, and in 2014, for the first time, it extracted more than 1 million tonnes of copper. China is conducting an ‘infrastructure for minerals’ exchange in this country. Such an agreement was signed back in 2007 and is worth USD 6 billion. It is no wonder that Beijing’s hunger for resources scares the West, because it is feared that in this part of Africa, China will wield great power because of the unmanageable debts of the local states. The Congo is a prime example of this. China has also ‘gifted’ the Congo with the construction of the Congolese Parliament, worth EUR 50 million. This is similar to the ‘gift’ to the African Union of a headquarters building in Ethiopia, at which it may have conduced spying for 5 years.  

Kenya owes $9.8 billion to China. The debt is for the construction of a railway to create a source of income for Kenya from passenger and freight traffic. However, just like Sri Lanka, which took out a huge loan in order to create a source of income, the plans do not correspond to reality. It is difficult for these railways to attract freight because it is more expensive to transport freight than by road. In addition, Reuters estimates that transporting containers by road from, say, Mombasa to Nairobi costs around USD 800, while transporting them by rail would cost around USD 1100. So the plan does not work and not only has Kenya failed to implement the project, but it has also incurred a huge debt burden. Given the cases of Sri Lanka and other countries, it is possible that China will nationalise the railway and thus extend its influence in Africa. There are also rumors that China may take control the Kenyan port of Mambosa.

Chinese influence in Europe

China’s imperialist policies are not so far from us in Lithuania. China has partial or full ownership of 13 different European ports. The Chinese company COSCO (China Ocean Shipping Company) has the greatest influence in three ports: Piraeus (100% shareholding), Zeebrugge (85% shareholding) and the port of Valencia, in which the Chinese company has a 51% shareholding. 

US journalist David Ignatitius (b.1950) of the Washington Post writes that “China is investing millions of dollars to build the global infrastructure it plans to dominate.” The Chinese are making it clear that “… by 2030-2050 we will be the dominant world power, and we are preparing for it.” 

Clearly, the EU itself is concerned about this, which is why it set up an investment mechanism in 2017, which was thought would help protect Europe’s security and strategic interests.

Phillipe Le Corre (born 1964), co-author of the 2016 book China’s offensive in Europe (2016), argues that “It is fair to say that the Belt and Road Initiative project is an opportunity for Europe, but first and foremost it is a project for China to expand its influence in Eurasia and beyond. It is not clear what level of control Chinese partners will have”. 

Clearly, if the Chinese authoritarian regime controls our ability to import and export goods at ports, the Chinese regime have enormous power over us. This geopolitical power, as Phillipe Le Corre says, is being used to divide the EU. He states that “Over the last few years, China has demonstrated its ability to divide Europeans by creating entities such as the 16+1 format, a group designed to facilitate government and business links between China and Eastern and Central Europe”. Another example is Greece, which received USD 300 million from China in 2016 in exchange for shares in the Port of Piraeus. In 2017, the EU drafted a condemnation of China for its human rights abuses, but Greece vetoed it, angering diplomats and human rights organisations. 

Another subject of Chinese imperialism is the 16+1 group of countries. The number 16 represents the 16 countries of Eastern and Central Europe, including Lithuania; while the singular unit is, of course, China. The aim of this group is to promote business relations between the 16 countries and China, and this, according to Europe Now, “could become a Trojan horse for China to destroy the bloc’s unity in sensitive areas ranging from the single market to the screening of foreign investment.” The worry is entirely justified. While China already controls 13 EU ports in the West, it is developing separate plans for Central and Eastern Europe. China can easily use these plans for Eastern Europe as a tool to undermine EU unity, or to force Member States to veto certain unpopular EU decisions (e.g., the Greek case). Moreover, the investment mechanism set up in 2017 does not really work, as each Member State can decide for itself whether or not to apply these “safeguards”. This is also acknowledged by the prestigious UK business and economic newspaper Financial Times, stating that “Chinese lobbying has already proved effective in promulgating the proposed review process”.

As we have seen, China is well on its way toward strengthening its global logistics system in respect to the economic independence of other countries. 

Clearly, playing with China is dangerous. We know how China’s authoritarian regime mistreats its own people, so we can rhetorically ask ourselves whether we think their treatment of citizens of other countries would be any different.

Germany’s Deutsche Welle predicts that China will become the world’s most powerful nation (China is already the world’s second largest economy), and our security departments are already pointing to China as a threat to our national security. We need to remain vigilant and be very aware of where we stand in relation to Chinese overtures.