China is doing big business with developing nations like Kenya. However, this business relationship appears like a ploy to replace one colonialist (the west), with another (the Chinese). Most capital intensive projects are funded by China. There is no problem with borrowing money for infrastructure projects. However, the cash from China comes with one condition that should never accompany an ordinary debt. The Chinese only loan funds to projects if they are guaranteed of being awarded contracts to implement those projects. E.g Thika superhighway funded my Exim Bank of China, and the standard gauge railway funded by the Chinese government. Basically, the Chinese do not give funding in good faith like a conventional bank would do. If the Chinese had no guarantees of being awarded contracts for these mega projects, they would never agree to funding the projects. In these arrangements by the Chinese, they benefit in this ways:
They earn interest on the loans they advance to Kenya and other poor nations
They earn back a big portion of their money by implementing the contracts awarded to them.
They provide employment for their citizens. The Chinese only employ locals when it would be more expensive importing Chinese labor. That is why only manual laborers are Kenyans while professionals are all Chinese. Also, only the non-core activities are outsourced to local companies for pocket change.
A wise man said that a modern slave is in debt, not in chains. As long as the Chinese keep being awarded these contracts for the projects they have funded, it will be twice as difficult to repay these loans because taxable income that would have been earned by Kenyans and invested here will instead be used to develop China. I dont believe that the Chinese ALWAYS offer the best value for infrastructure projects, but by funding the project, they eliminate all competition and charge exorbitantly. That, folks, is how the Chinese is fleecing developing nations. Any government that fails to award them contracts for mega-projects should not expect any Chinese funding.
To simplify this argument, assume that you need a loan to construct a house. An ordinary bank will give you the loan as long as you qualify, and expect to make a profit from the interest charged on that loan. If China was a bank, it would give you the loan, but insist on selling a house to you at an exorbitant price. Consequently, it makes money like a normal bank (from interest) and fraudulently (profit from selling the house to you).
I may not know much but I know that shaina is numero uno currently. Everybody is sucking their deek. not only are Developing nations doing it but also the developed world be doing the same. Shaina is running things currently.
I would like to see evidence of where the Chinese have inflated their projects as you said. I have no problem with the Chinese doing these projects, they do a superb job, imagine if S.S Mehta was given the contract?
The actual problem for me is the increased borrowing
There is always a conflict of interest if the financier is the same person/state as the supplier etc. The projects should be bidded on competitively not automatically assigning them to the Chinese as a condition for funding
We’ve been asleep for so long it’s like we are begging to be exploited. This will go on till we wake up. We’ve been having a bad had with our exploited history, but that needs to end. Even things like toothpicks, pegs are imported from China! We need progressive thinkers in power.
In July, 2014, then British High Commissioner To Kenya, Sir Edward Clay, , released an unusually undiplomatic rant whose most memorable sound byte was that Kibaki administration officials were “vomiting all over our shoes”. What he did not say was that he was miffed that security officials had opted for landcruisers instead of the Land Rover s they had used since colonial time.
They would give you aid and then dictate that you have to buy their Land Rover s with the money. Besides you would be tied to their factories for the life of the Land Rover since that was the only place you would get their very expensive spares. thus their Aid kept their people in employment by securing a captive market.
International relations is not about charity to weaker nations but about the self interest of nations.
Most of the projects the Chinese fund require international contractors, they are nearly always the cheapest ones and do good work and that is what the chinese are leveraging on. Otherwise no one would take up their loans.
The onus is on the borrower to ensure the deal is good for them, don’t just take up offers because they are available, only take up what you can handle.
There is too many people in China. Nothing much left to build there. So they have a lot of capital and manpower to damp to however comes calling. They work by being soft on all regimes. Turn a blind eye to any policy in host countries as long as they get their way. As long as one looks out for himself, there’s no colonialism. But you have to watch out for shit slowly creeping into your system.
Colonialist had forcefully taken our land, raped our women, committed genocide, killed us, took our resources and imprisoned us in our own land. We worked for free or token wages. Everything was sent back to the nations. These are britain, france, italy, germany, belgium, spain and portugal. Let’s not forget what the true meaning of a colonialist is.
On China it depends on the host nation laws, the contract and amount. For example Kenya has classified contractors accordingly after registration, vetting and inspection by NCA. Major construction companies only take class one category from China, Japan, India and Turkey. That means all major projects will go to them. However the law was amended for the major firms to incorporate local firms into their projects. Also now major firms have been asked to sell shares of at least 30% by private placement or NSE. That discussion is ongoing but they have to be registered here locally. On the contract some of China conditions is beneficial to both nations citizens. China gives you $ 1 billion for construction but insist on its Chinese international firms whom they can supervise to build it to great international standards. Therefore the loan will have been utilized properly. If that was left to contractors that don’t deliver both nations citizens lose and the loan repayment will not be effective as the nation didn’t derive any value from it. Two, some contracts are performance based where the contractors have to put a bid bond I.e $ 50 million as guarantee on quality of the workmanship. If defects are detected before grace period of operations ends then host nation takes away those funds as compensation. That will mean the Chinese contractor will insist on I.e 1000 Chinese inspectors for the project. In SGR in every site there were 3 inspectors signing off on all materials, work done and verification. One from CBRC, one supervisor and one independent supervisor. Lastly it depends on the nation counter proposal. On SGR we insisted that all manual jobs go to locals. CRBC to give first priority to locals on hired skilled workers and they train locals here and in China on construction/operating of SGR. 30%-40% of materials was procured locally of Kshs 90 billion worth.
This doesn’t sound like colonists to me.
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NEWSFLASH, even the Europeans and Americans give you money as long as you source for the resources from their own country, they even assign managers to that funding from their own countries…so nothing new here., The only problem with the Chinese is the poaching that they refuse to ban completely back in their country, thus fuelling it here in Africa
hehe. They fund you to build a bridge on condition that you contract a chinese company. So you pay them with the money they gave you, plus interest. In short, we are paying them to do shit, with our own money plus interest. FYI, The largest portion of America’s international debt is owned by China.