Tuesday, 29 November 2011

China to "help" western countries with infrastructure projects?

Are we going to see this again in the west?

We all know that thousands of badly paid Chinese workers were used to build the Central Pacific and other American railroads in the 19th century. Now it appears that cheap Chinese labour may be again become a familiar sight in the western world.

European and US leaders have already for quite a while begged China´s communist leaders to save their countries from the self-created economic and financial disaster that seems to worsen day by day.

So far China has been reluctant, but now the CEO of the mighty China Investment Corporation Lou Jiwei, writing in the Financial Times, says that China wants to participate in infrastructure investment in developed countries.

Traditionally, Chinese involvement in overseas infrastructure projects has been as a contractor only. Now, Chinese investors also see a need to invest in, develop and operate projects.

Infrastructure is underinvested in European countries and the US. The British Treasury has estimated that by 2015, £200bn will be needed to invest in energy, water, transport, digital communications, waste disposal and other related projects. Meanwhile, the American Society of Civil Engineers estimated that the US needs to spend at least $2,200bn on infrastructure repairs or rebuilding. Free of the inflationary pressure that afflicts many emerging economies, the US and Europe should make substantial investment.

But Chinese help comes with strings attached:

Governments should introduce pro-investment policies to create an attractive environment. This should include making fiscal adjustments, reducing taxes and offering bank loans at discounted rates.

Read the entire article here

Lou Jiwei´s colleague, Jin Liqun, chairman of the board of supervisors of China Investment Corporation, was more outspoken in a recent interview:

The head of the Chinese state’s overseas investment arm said he would only help Europe if it reformed its ‘outdated’ labour laws and welfare systems.
Jin Liqun, chairman of the board of supervisors of China Investment Corporation, said Europeans should stop ‘languishing on the beach’ and work harder it they want to drag the eurozone out of its downward spiral.

Obviously the labour laws in e.g. Sri Lanka and the Maldives - where China recently has been running infrastructure projects - are better suited to the wishes of the Chinese:

Relieving pressure on overcrowded national prisons by employing convicts as laborers at Chinese-run projects in the developing world is a novel strategy China has adopted - an approach that is certain to create a new backlash against Chinese businesses overseas in addition to highlighting the country’s egregious human-rights record.

Thousands of Chinese convicts, for example, have been pressed into service in projects by state-run Chinese companies in Sri Lanka, a strategically important country for China, which is seeking a role in the Indian Ocean. Sri Lanka sits astride vital sea lanes of communication. China - in return for being allowed to make strategic inroads - provided Sri Lanka offensive weapon systems that helped end the long civil war on that island nation. Now, Beijing is being rewarded with port-building, railroads and other infrastructure projects.
Chinese convicts also have been taken to a microstate in the Indian Ocean, the Maldives, where the Chinese government is building 4,000 houses on several different islands as a government-to-government “gift” to win influence there.

Read the entire article here

It appears that China´s more than 1000 slave labour prison camps - with over five million inmates - are so overcrowded that the country´s communist rulers see a need to "export" some of the prisoners. Europe and the US should say no to this particarly ugly type of Chinese exports.

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