CHINA'S DRIVE TO USE UP EVERYONE ELSES RESOURCES

FIRST: WIKILEAKS SAYS IT ALL

China owns about $1 trillion in U.S. Treasury securities, just about ½ of the $2.37 trillion stock of Treasury debt held by "foreign official" owners. The amount of U.S. debt held by China is even higher than that, with 70% of China's $2.4 trillion in foreign exchange reserves invested in $US treasury  bonds. That includes the over $400 billion in debt issued by U.S. government agencies, the likes of Fannie Mae and Freddie Mac, whose obligations are liabilities of the U.S. government. IMF also cautioned that one should add to the short term a US$500 billion deficit that the US administration is running, a further US$47 trillion in unfunded long-term commitments for US Social Security and the federally funded Medicare health program for the elderly and indigent. There were additional liabilities from cash-strapped local governments, forced to borrow to compensate for federal cutbacks. However the question is what will happen to China if demand for products slows down??

Part 2: Partners Who Don't Ask Questions

The Chinese are also welcomed as partners in Africa because they don't ask too many questions or set stringent conditions. They do without all the demands the West likes to set as preconditions for receiving aid, such as good governance, respecting human rights and decisive anti-corruption efforts.

The Chinese take a different approach. No matter whether it's war in Darfur, repression in Zimbabwe or corruption in Nigeria -- for the Chinese, it's not their problem. For example, instead of taking Zimbabwean dictator Robert Mugabe to task for his totalitarian policies and looting of his own country, they bestowed an honorary doctorate on him in 2005 and declared him "China's No. 1 Friend." Three years later, in 2008, they sent Mugabe the An Yue Jiang, a ship full of weapons and ammunition.

In fact, many politicians throughout Africa have grown to appreciate the fact that China doesn't impose conditions or ask questions. They also value how it grants lines of credit, builds parliamentary buildings and supplies arms without any hassle.

Access to Internal Documents

For example, Kenya, concerned about simmering political tension with its eastern neighbor Somalia, obtained some military hardware from China. But Beijing provided Kenya's National Security Intelligence Service (NSIS) with much more than just computer and telecommunications equipment. Indeed, the scope of the Chinese involvement ultimately grew so large that the worried US Embassy in Nairobi reported in a secret dispatch to Washington that: "As of September 2008, (Chinese telecommunications equipment company) ZTE was building e-Government infrastructure on the NSIS headquarters compound. The project involved a secure network for Kenyan e-Government activities." Since then, the Americans have been forced to assume that Chinese intelligence officers have access to much of the Kenyan government's internal documents and communications.

Beijing even nurtures ties with a failed state like Somalia. For example, China was one of the first countries to lend support to the Transitional Federal Government (TFG) in Mogadishu when it started work in October 2004. A year later, China would sign a number of trade agreements with Somalia's government. "We understand that China made additional periodic cash contributions to President Yusuf," wrote diplomats from the US Embassy in Kenya in one cable, referring to Abdullahi Yusuf Ahmed, the former head of the TGF. "Our contacts told us that the support was always in cash payments and that most of it was disbursed within the TFG cabinet."

According to US diplomats, the Somali ambassador to Kenya admitted that: "China is not concerned with politics, only economics, and is positioning itself for commercial advantages in post-conflict Somalia."

'Failed to Create Jobs'

Nevertheless, despite the abundant help provided by the Chinese, the American cables reveal that criticism of China is growing in many African countries. For example, in many regions, the Chinese are viewed as being responsible for smuggling, poaching and overfishing. They are also accused of ignoring labor laws and of flooding the continent with counterfeit brand-name products.

For example, the US Embassy in Nairobi wrote that "the Kenya Wildlife Service noticed a marked increase in poaching wherever Chinese labor camps were located." The wildlife service also apparently reported that "90 percent of the ivory smugglers detained at JKIA (Jomo Kenyatta International Airport) are Chinese nationals." The US embassies in Cameroon, Zimbabwe and Nigeria also filed reports about Chinese ivory traders and went so far as to claim that some Chinese diplomats were involved in the smuggling efforts.

Similarly, Chinese investors in Angola have drawn much criticism despite all the aid they have provided. For example, one report from the US Embassy in Luanda claims that there were concerns that "Chinese engagement, financed by loans that Angola needs to repay, has failed to create jobs for Angolans, has failed to transfer technology to Angolans, and has often resulted in poor quality performance." There were also concerns about a lack of transparency regarding funding for projects, which were handled by an office of the president.

Reports coming out of the US Embassy in Abuja, Nigeria, weren't much prettier. "International press reports claim that some Nigerian officials are concerned about the Chinese practice of importing Chinese workers who could exacerbate local resentment, particularly in the Niger Delta where there are major grievances over the lack of employment opportunities."

Above all, the report added, cheap Chinese textile imports had already destroyed the domestic industry, forcing more than 65 factories to close over the last 10 years. According to the document, the sector's decline had affected over a million Nigerians who made their livelihood from the textile industry, whether as cotton workers, factory hands or salespeople.

'Huge Problem'

In fact, the changes reportedly prompted the head of Nigeria's retail trade union to voice bitter complaints to American diplomats. "The Chinese are here and that is a huge problem," he apparently said. "The Chinese have no respect for local laws ... and they compromise a lot of things, including safety." The man went on to complain that, while corruption is punished in China with the death penalty, Chinese people working abroad were quick to adjust to the laxer habits of their surroundings.

For example, within a one-week period in October 2007 alone, Tanzanian authorities in the port of Dar es Salaam seized 73 cargo containers with tropical softwoods that were bound for China. One cable from the US Embassy in Dar es Salaam bluntly states that the Tanzanian government's 2004 ban on the exports of logs "is widely seen as ineffective."

Reports from the US Embassy in Maputo, the capital of Mozambique, strike a similar tone. "Officially, bilateral trade between China and Mozambique was approximately $200 million in 2006," reads one cable. "It may have been worth much more than this -- Chinese fishing vessels (and others) are thought to be pillaging the marine fishery off Mozambique's coast and Chinese businesses are believed to be heavily involved in illegally logging of Mozambican hardwoods." Embassy officials added that they believed "Chinese assistance comes with strings attached."

Guantanamo in Niger

The Chinese are apparently equally relaxed when it comes to health and safety regulations in the workplace. In Zambia, coal miners are sent underground half-naked and barefoot. In Niger and Zambia, workers mine uranium without any protective clothing and are housed in camps near the mines, with the result that they are constantly exposed to high levels of radiation.

The Tuareg people living in the area near the new SOMINA mine in northern Niger have even nicknamed the workers' encampment there "Guantanamo," because of the harsh working conditions and the Chinese foremen. And, in Namibia, the Chinese allegedly told complaining workers that they had to "suffer now, so that future generations can enjoy."

China currently consumes one-third of the world’s aluminum and alumina & have over 150 steel mills. China's foreign exchange reserves have soared & in the second quarter of the current year, they rose by $178bn to $2.132 trillion to exceed $2 trillion for the first time. China is the largest foreign lender to the US government and at the end of April, China's holding of Treasury securities was $763.5bn (Japan was the second biggest holder, with $686bn). Its now August 2010 and their appitite has grown even more. US will need more capital inflows to deal with the financial crisis, the wars, the unemployment and in helping USA, China can see an unhealthy country trying to get back to normal but as the US keep on buying Chinese goods the American apetite on borrowing will increase getting them even deeper into debt. A high debt level can affect inflation, interest rates, employment, and economic growth. Having spent a fortune bailing out their banks, allowing CEOs to get giant salaries again without brakes, the West now is paying the price in terms of higher taxes & greed to meet the interest on that debt. In the case of countries (like UK, America & NZ ) that have trade as well as budget deficits, those higher taxes will be needed to meet the claims of foreign creditors like China whi is not silly in what they do. As China has just invested into Japan instead of places like Ireland/ Spain etc they see the advantages of better countries who can service loans. As the USA continues to fight wars and have troops in many countries like Germany, Korea. Iraq, Afghanistan, Guam, Colombia etc, they have stretched its resources too wide in being the watchdog of the world and must start looking after themselves instead of extending their failure tentacles to other countries where they have indeed failed. This has allowed China to sneek in underneath and offer these countries loans and funding in return for their raw materials as USA is unable to achieve these realities.

The catch is if China stops lending & recalls its loans what will happen to the world economy & themselves.

The most terrifying prediction for 2019 involves Nostradamus "Satan's arch of fury". Although the precise nature of this prediction is left open to interpretation -could it be a comet, a war but definitely a disaster??? eg. Russian drought; Pakistan flooding has started

[ China moves into Africa Part 1 ] [ Wikileaks how to decipher the files ] Are we heading back to recession

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