Debt trap diplomacy has been around since far before 2017. John Perkins' "Confessions of an economic hitman" 2004 describes the ways US entities used these practices in the 70s. It provides a lot of color as to how and why it is done and how it mixes (typically secretively) with power and influence.
China has too much savings (because it financially represses its citizens) and it deploys that saving abroad to finance dodgy projects in the third world. While they get “collateral ” this stuff is still located in the third world and can be nationalized at any point.
I think it’s a cultural misunderstanding to assume that corporate-government relations are the same in china as they are in the USA. Chinese companies operate under the directive from the government especially large significant companies like banks. An American bank would never negotiate the ceding of disputed land for the dispensation of loans
I've been following the "Chinese Debt Trap Diplomacy" story for some years now, although I didn't know it went back as far as 2017.
Thinking about it carefully has given me some useful tools to de-cypher a lot of other nonsense narratives.
For one thing, those who believed, or at least said that the Chinese Debt Traps were real could never explain exactly how they were supposed to work.
Was it that the debtor countries would pledge more in collateral than the debt was worth? Was it that they would pledge, and then lose strategic assets that Beijing could never acquire in any other way? Was it that Beijing could make a greater profit on financing a bad project and then seizing the assets once it failed, then it could by just having a good project that succeed from the start?
All of these possibilities seemed to be based on the idea that Ministers of Finance from dozens of countries around the world were all total morons who just didn't understand how finance worked, and it was only the Mandarins of Beijing who were the Machiavellian Masters of Money, no due diligence or outside opinions were possible, certainly not from Wall Street or The City of London.
Which brings up another point worth considering.
If any of this Debt Trapping actually worked why was it that Beijing alone that could do it? What have New York, London, Amsterdam, Brussels, Rome and Zurich been doing for the last several hundred years ? Are they all too moral to use this one weird trick and get billions of dollars in cash and assets?
Unfortunately this habit in the West to mix facts and opinion in the news without relevant disclaimers, coupled with the incessant growth of propaganda imbedded in "the news" since the 1960s, the emphasis on narrative control, has brought us into a terrible place from where it's not clear we can extricate ourselves.
As another commenter noted, the ideas behind "debt trap diplomacy" were first applied to the IMF-World Bank, but as far back as the 1980s and 90s. If people really want to be horrified at the west, just research the International Finance Corporation (part of the world bank group), which directly lends to private corporations in "developing countries" promoting Western priorities and professional networks. The "west" has created a plethora of unaccountable and unelected international agencies to promote its priorities and it's only been since the advent of BRICS and the growth of China that it no longer has a stranglehold over the rest of the world.
So if China does the same, and it's not altogether certain they're following the same playbook, then good for them.
Yes, but the Author point is the opposite: China is not doing it - that presuppose that the West's "debt trap diplomacy" was non-existent too. The consequence of His point, btw, is that the West is repurposing no-global arguments against China, so Bolton and Tillerson are woke. Lots to unpack here...
What the West does or used to do is complicated, as it often involved multilateral institutions like the World Bank and the IMF. But from a macro perspective, it was similar to debt trap diplomacy. When China started financing infrastructure and industrial facilities in other countries, whether it does so from a purely strategic and business perspective or with ulterior motives is irrelevant. My point was China is following a script created and perfected by the West. So it would be absurd for China to not want collateral infrastructure in exchange for its investments if these investments fail, and it would be just as foolish for them to not want a PR win along the way, so getting invited to take over infrastructure they've paid for is to be expected. As a side note, the West is good at narrative control (propaganda) and often does a lot of projection (blaming others for what it does).
Seemingly antagonistic principles and/or motives may at times be simultaneously true of serially true. And it does not surprise me that a libertarian analysis would excuse this. The idea that China is not desiring to fill a political vacuum with its influence no matter how incompetently they may do it is absurd. The underdeveloped world which will always be somewhat comparatively underdeveloped nurses a lot of grudges and mystiques about the ground source of their anger and about the nature of their frenemies Their motives are often actually a confused mishmash as a result. So in conclusion this column says a lot while telling us nothing.
China doesn’t make a profit on a lot of things; it’s called Marxisim.
And who knows what is going on behind the scenes with these deals. The way the author writes that “the other guy wanted the money” is childishly naive in regards to the way the world works.
Anyone who has read archives related to historical events can attest the actions behind the scenes are totally different than what is presented.
That's not much of an explanation is it? In fact that's no explanation at all.
I have seen many people attempt similar pseudo-explanations of China, Beijing and the CCP. I have come to call it "The Chi-Com Magic Hypothesis".
It's a half-articulated belief that the laws of the universe, the nature of reality and the human condition don't apply to the Peoples Republic of China. That there's some sort of sorcery being performed by Xi Jinping that can make Up into Down, time run backwards and 2+2 = 5.
You feel that China doesn't make a profit on a lot of things because of Marxism, but isn't the cause of this whole situation the very solid fact that China IS making a lot of profit on a great many things?
China is making billions of dollars in profit every day from trade, hundreds of billions of dollars per year, and this is where that Magical Hypothesis comes in, are we to accept that after working hard for that money that the bosses are just going to burn it all?
You feel that there are actions behind the scenes which are totally different than what is presented.
I agree, but the story the Western media has presented to the world for years is that there IS a thing called Chinese Debt Trap Diplomacy. You're being presented with a weird story that doesn't match known facts of mathematics, economics and human motivations. You're choosing to believe that story and deny reality. You're not seeing a bizarre and illogical reality through a crystal clear lens, what you're seeing is a very normal and solid reality through a warped and cracked lens.
The lens is called self-serving Western propaganda.
Belt and Road projects are largely a response to economic problems inside China. As Chinese growth has slowed, the government has looked for ways to keep its companies busy???
Far from slowing, China's growth is accelerating: GDP will grow by $1.9 trillion this year. That's more than all but three years during the country's go-go growth burst.
Debt trap diplomacy has been around since far before 2017. John Perkins' "Confessions of an economic hitman" 2004 describes the ways US entities used these practices in the 70s. It provides a lot of color as to how and why it is done and how it mixes (typically secretively) with power and influence.
China has too much savings (because it financially represses its citizens) and it deploys that saving abroad to finance dodgy projects in the third world. While they get “collateral ” this stuff is still located in the third world and can be nationalized at any point.
I think it’s a cultural misunderstanding to assume that corporate-government relations are the same in china as they are in the USA. Chinese companies operate under the directive from the government especially large significant companies like banks. An American bank would never negotiate the ceding of disputed land for the dispensation of loans
I've been following the "Chinese Debt Trap Diplomacy" story for some years now, although I didn't know it went back as far as 2017.
Thinking about it carefully has given me some useful tools to de-cypher a lot of other nonsense narratives.
For one thing, those who believed, or at least said that the Chinese Debt Traps were real could never explain exactly how they were supposed to work.
Was it that the debtor countries would pledge more in collateral than the debt was worth? Was it that they would pledge, and then lose strategic assets that Beijing could never acquire in any other way? Was it that Beijing could make a greater profit on financing a bad project and then seizing the assets once it failed, then it could by just having a good project that succeed from the start?
All of these possibilities seemed to be based on the idea that Ministers of Finance from dozens of countries around the world were all total morons who just didn't understand how finance worked, and it was only the Mandarins of Beijing who were the Machiavellian Masters of Money, no due diligence or outside opinions were possible, certainly not from Wall Street or The City of London.
Which brings up another point worth considering.
If any of this Debt Trapping actually worked why was it that Beijing alone that could do it? What have New York, London, Amsterdam, Brussels, Rome and Zurich been doing for the last several hundred years ? Are they all too moral to use this one weird trick and get billions of dollars in cash and assets?
People in the Balkans😅
Unfortunately this habit in the West to mix facts and opinion in the news without relevant disclaimers, coupled with the incessant growth of propaganda imbedded in "the news" since the 1960s, the emphasis on narrative control, has brought us into a terrible place from where it's not clear we can extricate ourselves.
As another commenter noted, the ideas behind "debt trap diplomacy" were first applied to the IMF-World Bank, but as far back as the 1980s and 90s. If people really want to be horrified at the west, just research the International Finance Corporation (part of the world bank group), which directly lends to private corporations in "developing countries" promoting Western priorities and professional networks. The "west" has created a plethora of unaccountable and unelected international agencies to promote its priorities and it's only been since the advent of BRICS and the growth of China that it no longer has a stranglehold over the rest of the world.
So if China does the same, and it's not altogether certain they're following the same playbook, then good for them.
Yes, but the Author point is the opposite: China is not doing it - that presuppose that the West's "debt trap diplomacy" was non-existent too. The consequence of His point, btw, is that the West is repurposing no-global arguments against China, so Bolton and Tillerson are woke. Lots to unpack here...
What the West does or used to do is complicated, as it often involved multilateral institutions like the World Bank and the IMF. But from a macro perspective, it was similar to debt trap diplomacy. When China started financing infrastructure and industrial facilities in other countries, whether it does so from a purely strategic and business perspective or with ulterior motives is irrelevant. My point was China is following a script created and perfected by the West. So it would be absurd for China to not want collateral infrastructure in exchange for its investments if these investments fail, and it would be just as foolish for them to not want a PR win along the way, so getting invited to take over infrastructure they've paid for is to be expected. As a side note, the West is good at narrative control (propaganda) and often does a lot of projection (blaming others for what it does).
Seemingly antagonistic principles and/or motives may at times be simultaneously true of serially true. And it does not surprise me that a libertarian analysis would excuse this. The idea that China is not desiring to fill a political vacuum with its influence no matter how incompetently they may do it is absurd. The underdeveloped world which will always be somewhat comparatively underdeveloped nurses a lot of grudges and mystiques about the ground source of their anger and about the nature of their frenemies Their motives are often actually a confused mishmash as a result. So in conclusion this column says a lot while telling us nothing.
The picture of the boats is beautiful. Where is it from?
AI, I'm afraid.
—NC
Well done.
This is an incredibly naive article.
Alright then, tell me how "debt trap diplomacy" actually works.
How do you make a profit from financing projects that fail?
China doesn’t make a profit on a lot of things; it’s called Marxisim.
And who knows what is going on behind the scenes with these deals. The way the author writes that “the other guy wanted the money” is childishly naive in regards to the way the world works.
Anyone who has read archives related to historical events can attest the actions behind the scenes are totally different than what is presented.
That's not much of an explanation is it? In fact that's no explanation at all.
I have seen many people attempt similar pseudo-explanations of China, Beijing and the CCP. I have come to call it "The Chi-Com Magic Hypothesis".
It's a half-articulated belief that the laws of the universe, the nature of reality and the human condition don't apply to the Peoples Republic of China. That there's some sort of sorcery being performed by Xi Jinping that can make Up into Down, time run backwards and 2+2 = 5.
You feel that China doesn't make a profit on a lot of things because of Marxism, but isn't the cause of this whole situation the very solid fact that China IS making a lot of profit on a great many things?
China is making billions of dollars in profit every day from trade, hundreds of billions of dollars per year, and this is where that Magical Hypothesis comes in, are we to accept that after working hard for that money that the bosses are just going to burn it all?
You feel that there are actions behind the scenes which are totally different than what is presented.
I agree, but the story the Western media has presented to the world for years is that there IS a thing called Chinese Debt Trap Diplomacy. You're being presented with a weird story that doesn't match known facts of mathematics, economics and human motivations. You're choosing to believe that story and deny reality. You're not seeing a bizarre and illogical reality through a crystal clear lens, what you're seeing is a very normal and solid reality through a warped and cracked lens.
The lens is called self-serving Western propaganda.
"And who knows what is going on behind the scenes with these deals."
So, you admit you know nothing of which you speak. So you are speculating.
Saying you don't know isn't speculating. The works of government thugs is not so cute and simple as the author imagines. It's childish to think so.
Who knows what the story is but somehow people end up with things and other people end up rich giving things away.
"Saying you don't know isn't speculating. "
Saying 'And who knows what is going on behind the scenes with these deals.' implies something nefarious is going on. A synonym of speculate is assume.
Belt and Road projects are largely a response to economic problems inside China. As Chinese growth has slowed, the government has looked for ways to keep its companies busy???
Far from slowing, China's growth is accelerating: GDP will grow by $1.9 trillion this year. That's more than all but three years during the country's go-go growth burst.
It's a narrative concocted by those who hate China.
Hilarious how people accuse China of doing what the IMF and America has been doing for decades