Month: October 2022

A very common thread has run through the course of this class– that China is still bound to the politics and persuasions of other countries and cannot act of its own accord without repercussion. While this class has mainly focused on the global economic side of things, “Rivers of Iron: Railroads and Chinese Power in Southeast Asia” offers a look into the policy-based, political approach to China’s global practices. I found this book to be my favorite of the semester, as the role that international politics plays in the global scene of economics and the importance that image plays in a country’s willingness to act truly intrigues me.

In this book, the authors closely examined the power with which small Southeast Asian countries have the power to connect and bargain with China and the extent to which they practiced that power. I found China’s relationship with Laos to be the most interesting because of the historical role that it played in Chinese-Vietnamese relations in the 1970s and 1980s, and the balance-seeking position that it found itself in during the Vietnam War. Relations were tense between all three countries but eventually softened between China and Laos in the early 1990s. Since then, China has invested heavily in Laotian construction, and this investment has been heavily scrutinized as being neocolonialist, and certainly, power dynamics play a key role in the countries’ relations. Laos is an interesting player in China’s attempt to connect Southeast Asia through the BRI.

Though Laos is one of the poorest and least developed countries in Southeast Asia, its role in negotiating the terms of the Vientiane Railway is incredibly interesting. Laos is a communist regime and democratic opinion is not often a deep stake in official positions. However, with this HSR (High-Speed Railway), Laos held the Chinese state to better terms for itself both politically and for the sake of its people. When the initiative to build this railway was born, the Laotian parliament, backed by the World Bank and the Asian Development Bank, immediately flagged the transaction as being heavily unfair. As a result, China reduced the loan amount from $7.2 billion to $500 million and instead financed the remaining portion. Though this back-and-forth languished for five years and delayed the project heavily, Laos was able to create a more suitable financial case for itself while still receiving benefits from the railway.

Despite China’s best efforts to convey itself as a benevolent benefactor in the region, its concession to these demands was simply part of the deal it had to make to secure its position in strategically important Laos. Knowing this, Laos was able to sway its own power despite its seemingly weak position at the bargaining table. In this, we can see that–even from an international relations perspective– China is not omnipotent and must abide by some rules of the game.

This week, we were given the opportunity to speak with Dr. Miriam Dreissen, author of Tales of Hope, Tastes of Bitterness: Chinese Road Builders in Ethiopia. She was an incredibly well-spoken person with perspectives that I found particularly interesting because Dr. Dreissen is trained as an anthropologist. Reading her book gave a great background for our conversation, and I greatly enjoyed seeing the evolution of her research from her time in Ethiopia to today.

Reading her book, I became most interested in the labor and power relations between Chinese and Ethiopian workers. Accounts of peer-to-peer, authoritative, and personal relationships truly brought the book to life. I wanted to gauge her opinion on the way in which Chinese mid-management views their Ethiopian workers, and especially how race and class play into that relationship. Being that Dr. Dreissen is an anthropologist, her background in cultural relativism and intercultural patterns allows her a unique perspective on the two factors interplay between foreign management and local employee.

Dr. Dreissen informed us that since her research in the early 2010s, relations have greatly improved in the construction sector because of the formalization of labor relations by the court. She explains that courts have forced interactions that may have not been present before, such as management having to sit and listen, undisturbed, to the plight of the workers. Lawyers and translators are employed to maintain the civility of the situation. Dreissen attributes the improved relations to not only this, but a new, more culturally-aware generation beginning to take over.

This change in discourse seems to bring a brighter future toward continued improvement between Chinese enterprises and their workforce.

China has been accused of employing a debt-based political agenda to entrap politically- or resource-strategic countries in unsustainable loans or credit programs. The idea of “debt-trap diplomacy,” as it has come to be known, was popularized by the Trump administration in Vice President Pence’s speech at the 2018 Asia-Pacific Economic Cooperation (APEC) Summit. This speech sharply criticized the predatory nature of unsustainable loans handed out by countries only looking to “compromise the independence” of sovereign nations by undermining their fiscal autonomy–all without specifically mentioning China by name.

Without deeper examination, it is easy to see how this could be the first conclusion many would reach. China has a tendency to lend to poorer nations that Western lenders are not interested in, and so these countries stand to benefit from China’s generous lending plans. The infrastructure is built, and the home country finds itself unable to repay the loans. China forgives these loans in various forms, but most often through leases and restructurings that seem to politically and economically benefit China. The debtor is left with infrastructure that may not be entirely beneficial and a tract of strategic land under foreign control. Obviously, this seems dire.

It is a much more complicated issue than this, however. As Tim Summers points out in his article “Structural power and the financing of the Belt and Road initiative,” China’s lending patterns seem to follow demand rather than any sort of political strongman strategy. I believe this to be best exemplified by China’s involvement in the Sri Lankan port of Hambantota.

In short, a textbook case of supposed debt-trap diplomacy occurred here. Sri Lanka wanted to build a port, Western lenders were uninterested and preoccupied with the larger Indian Ocean shipping lane, and the EXIM Bank of China won the bid to finance the project. Sri Lanka found itself unable to repay these steep debts without external financial aid, and so rather than adding to that accumulation, Sri Lanka chose to lend out Hambantota port to an experienced company. Only two entities put forth bids on this lease–both were Chinese. Now on a 99-year loan to China Merchants, Hambantota port is under Chinese control.

It is reasonable to say that China does engage in certain aspects of debt entrapment. However, as noted by Padraig Carmody in his article “Dependence, not debt-trap diplomacy,” an important distinction in the morality of this method lies in its intentionality. When it was first acquired, Hambantota was nowhere near the focal point of Indian Ocean trade that it is today. China Merchants had a major hand in growing the port but had no say in its initial construction. This decision was simply in reaction to the situation presented– and it was a very good one at that. This seems to point to a strategy that relies more on opportunity than entrapment, and lends credence to the idea that Chinese enterprise is largely playing the game of global capitalism.