Two news reports late last year reminded me that the Chinese Government has one enormous advantage over all western democracies – they can plan very long-term and they have a president for life, whatever pretense at elections and democracy they may espouse.
The first report concerned a Chinese company buying British Steel for a knock-down price of 70 million pounds, with the U.K. Government even agreeing to loans and guarantees. The second report was related to the Australian Government’s repeated acceptance of Chinese loans for infrastructure projects despite deep worries of creeping Chinese invasions at all levels. The last five Australian prime ministers have spoken out about this threat but only one tried to do anything about it, and he failed. More recently, the current Prime Minister again reiterated the threat from China only to have China respond by actively discouraging Chinese students from return to their studies in Australia.
The threat from China is both insidious and pervasive and they have no compunction to retaliate if they think their plans are thwarted.
The takeover of all islands in the South China Sea, the arrival of 747’s in Caribbean Islands and Latin American capitals loaded with Chinese businessmen with suitcases full of cash and offers of funded huge infrastructure projects at extremely attractive repayment terms are yet other examples of the this national strategy. Many countries in Africa have been under siege from similar initiatives for several decades now, and I am sure there are many more examples.
These initiatives all have a similar approach. Lots of cash and impossible-to-refuse interest rates on major projects. It is all very seductive to politicians who won’t be around when those loans come to term. The fact that the countries involved have almost no chance of repaying those loans, ever, means the Chinese Government – no such initiative could ever happen without the full compliance and encouragement of the Chinese Government, despite their denials – is quietly engaged in buying many countries in the world.
The latest news on British Steel follows the same pattern. Even the U.S. is not exempt. China owns a significant and increasing percentage of U.S debt.
I think it might be time for politicians to start thinking about passing laws to retain national assets under national control. Not the socialist concept of nationalizing everything, but the considered policy of not allowing foreign companies/governments to buy national assets.
A few years ago some idiot in the British Government allowed a bid for tanks for the British Army to be open to all manufacturers worldwide. Equally stupid was the fact that the contract held by British Airports Authority, which runs London Heathrow, was put out to tender a few years ago and the contract was awarded to a Spanish construction company that had never run an airport in its life.
What kind of madness allows these things to happen? What kind of madness is currently allowing China to buy the world? They don’t need to conquer anything, all they need to do is just call in the loans.