As far as I’m aware, China has been giving loans to various countries in Africa and building infrastructure in exchange for money and maybe some stuff like recognizing Taiwan as part of China. But why do people say China is imperialist for doing this? Is there truth to it or is it another strain of radlibs eating state department propaganda?
Basically: loans with terms and debt collection are essential parts of neocolonial imperialism, and since China is a member of the IMF and the World Bank and participates in those enterprises they have been culpable in many of the same crimes as capitalist countries when it comes to pushing their national interest abroad to poorer ones. A big part of the protests in Myanmar, for example, is pushback against the Chinese bourgeoisie which own a lot of the capital in that country, and have the same incentive structure as any capitalist institution has when overseas to crush labor organization and capture government oversight.
Now I think it’s essential in these conversations to have a sense of scale. China forgives a lot of debt, attaches fewer conditions to its loans, and builds lasting infrastructure which will build a country up (as opposed to most colonial infrastructure which just exists to get the resources out of the country as cheaply as possible). Most importantly China doesn’t invade other countries, bomb every building taller than one story and prop up a China-friendly dictator. So I would never equivocate China with America or Europe, even while recognizing that China isn’t always good.
Are the bad things that China has done and continues to do required in order for it to build itself up against capitalist encirclement? I don’t fucking know, but they are an inevitable outgrowth the of the current SWCC system and the capital that China has exported abroad is something that it will eventually have to reckon with if the CPC is indeed a dictatorship of the proletariat and their society is indeed on the path to a transition to socialism.
tl;dr: read Imperialism, the Highest Stage of Capitalism
I really enjoyed your post, but I just wanted to expand on one point:
attaches fewer conditions to its loans
Because this one is huge. The “conditions” attached to these loans are often incredibly invasive and really challenge the notion of how much sovereignty the receiver nations have, all to ensure western capitalists are the ones benefitting. These conditions can be anything like forcing countries to enact brutal austerity, privatize state industries, or make natural resources easily available for extraction to the west at low prices.
I think the brutal austerity is key to understanding this. Chinese investment has never resulted in people losing their healthcare or government subsidies for their homes. It has never turned people into slaves in sweatshops. Western countries through the IMF constantly utilize austerity when restructuring loans and inflict massive punishment on regular people, clearly to extract the most wealth they can from a country. The Chinese would rather forgive an unpaid debt or restructure the terms of a loan without harming people. Whether it is out of the goodwill of the Chinese government or in pursuit of some sort of Machiavellian “soft power” is largely irrelevant to the people whose debts are being forgiven. Thus we see Chinese loans are viewed more favorably by the third world even if they’re kind of the same thing as the West’s.
in Graeber’s Debt book, he talks about the history of debt in relation to the Middle Kingdom and it’s relations to other spheres of power and trading entities. Basically, the take home as I recall it, is that there is a long memory of understanding that it’s much more optimal to buy up your trade partner’s shitty debt (knowing you can’t really collect in full), take a haircut on payments, or otherwise forgive loans than it is to destabilize trade relationships because desperate (politically unstable) neighbors are unpredictable. this was the basic sovereign debt policy between the middle kingdom / imperial court and other countries it did business with.
when i read that, i remember realizing that China buying up lots of the US’ foreign debt wasn’t some power play as it was consistently reported in western media (because why else would someone buy up another’s outstanding debt, but to fuck them)… rather it was china doing it’s thing and keeping us at the table, because the overall trade relationship was working for them.
like, if China ever just plain decides to be half the dick economically that our media insists they are, we would be dead in the water.
In 1953, Henry Cabot Lodge, Jr. went to the United Nations as the United States ambassador. He was horrified by the way in which the new nations that came out of colonialism had a positive attitude towards the USSR. Lodge created a Psychological Strategy Board to advise him in how to make the Soviets appear like the imperialists. Arthur M. Cox, who would later head the Brookings Institute, wrote negatively of Lodge’s plans. ‘I think we have made a great mistake as a nation of assuming that because Soviet power and subversion is the greatest problem facing us today,’ he wrote in a memorandum in 1953, ‘it is therefore the greatest problem facing everybody else.’ Cox was a liberal who respected reality. ‘No amount of horror stories demonstrating the crimes of the Kremlin will convince millions of people in the free world that Soviet-inspired Communism is their main problem because they know,’ he said sharply, ‘that it is not.’ Lodge was deaf to this. He understood that if the United States battered the USSR by using its vast cultural apparatus – from the media to the films – it could succeed. Paint the Soviets as the imperialists, went the final programme of the Psychological Strategy Board, call them the ‘new colonialists’. ‘While the Soviet Union preaches its concern for the liberation of dependent peoples,’ the US officials wrote, ‘it has ruthlessly converted every territory over which it has acquired domination into a vassal of the Soviet state.’ This was written in August 1953, while the CIA overthrew the democratic leader of Iran, Mohammad Mosaddegh.
from Washington Bullets by Vijay Prashad
Mainly radlibs eating state department propaganda. China was very bad in the past in Africa under the Deng era where they took Kissenger’s foreign policy advice, supporting colonial regimes and all. Modern China is not like that at all. Relations are much better, and they’ve done a lot of good. So yeah criticism of current programs by Americans is just regurgitation of state department propaganda
Yanis Varoufakis explains how this respect and solidarity for expanding “progressive forces” works out in practice:
When I was Minister of Finance I had a very interesting experience with COSCO, one of the Chinese national companies that in the end bought the Port of Piraeus.
When I moved into the Ministry I found the contract from the previous government, that had already sold the Port of Piraeus for a pittance and other ridiculous conditions to the Chinese, under the guidance of course of the European International Monetary Fund. In other words, as a minister, I was bound to a particular deal that was terrible for Greece. And I went to the Chinese, and discussed it with them, and I was really astonished.
I said to them: Look, you’re paying too little, you’re not committing to a sufficient level of investment, and you are treating our workers as fodder. You’re effectively subcontracting labor to horrible companies that exploit the workers, and I can’t deal with this effectively. I proposed to them we to renegotiate the contract. So instead of getting 67% of the shares of the port, they would get — with the same price — 51%. The remaining shares would go into the Greek pension fund system, in order to bolster the capitalization of the public pensions. Secondly, I want you to commit to 180 million euros of investment within 12 months. And thirdly, proper collective bargaining with the trade unions and no subcontracting of labor. And to my astonishment, this is okay!
Can you imagine if that was a German company, or an American company? That’s what I’m saying.
This is not an isolated anecdote. London School of Economics research concludes an Ethopian case study with the discovery that “Chinese Investment In Africa Has Had ‘Significant And Persistently Positive’ Long-Term Effects Despite Controversy.” Dr. Deborah Brautigam from Johns Hopkins University concurs:
The Chinese ‘Debt Trap’ is a myth. The narrative wrongfully portrays both Beijing and the developing countries it deals with. … Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota. A Chinese company’s acquisition of a majority stake in the port was a cautionary tale, but it’s not the one we’ve often heard. With a new administration in Washington, the truth about the widely, perhaps willfully, misunderstood case of Hambantota Port is long overdue.
Why can’t capitalists replicate these strategies, even cynically, in pursuit of long-term profit? As per Lenin, “the degree of concentration which has been reached forces [capitalists] to adopt [imperialism] in order to obtain profits.” These strategies are only available to China because the CPC — China’s sovereign, the political authority — is able to check the power of capital.
The infrastructure seizure thing is one they go on and on about.
They have one example, Hambantota Port in Sri Lanka.
Sri Lanka built the port with a loan from China, after which Western debt was still the majority of their debt. Western debt was also higher interest rate than the new Chinese debt, so they leased the port to China for a very long time and used the proceeds to pay off the higher interest debt.
People will tell you they did the lease to pay off the Chinese debt, which they couldn’t afford to service, but they’d never missed a payment, and again, it wasn’t the most expensive debt they had anyways.
There’s a long article in the Atlantic of all places that debunks in detail the Sri Lankan port thing and explains there is no Chinese debt trap https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
Yeah, I guess I get socialists being wary about that. China’s loans have much lower interest rates and they frequently forgive or reduce the amount if a country can’t pay. They’re very different than IMF loans, which also typically have additional strings attached like requiring the privatization of parts of a country’s economy.
