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>Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa

• baybal2 8y ago
  >Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa relationship is "asymmetric." In 2016, for example, China exported $88 billion in goods to Africa, but only imported $40 billion from the continent. 88 : 40 = 2.2. At the ratio of 2.2, Africa does better on trade balance with China than most of Western nations... >It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Furthermore, it does not want to do anything that would reduce the value of the remaining dollars it holds. Trying to establish a resource base in Africa where they can build relationships, influence, enforce their property rights and protect trade routes, seems like a reasonable choice. Have you come to that conclusion yourself?
  • nraynaud 8y ago
    Careful with this comparison, Africa is still mostly a continent of primary resources and factories, so it would more natural that their trade balance be positive.
    • baybal2 8y ago
      No, it is far from being positive, yet compare it to Saudi Arabia. On resource exports: The logic that resource economies must have positive trade balances as a rule did not stand reality check. One may think that the amount of imports a resource economy can afford is not elastic in relation to their main export because they don't have any industry to produce basic living necessities. In reality, what happens is the opposite: once few rich run away with what little hard currency the country had, the remaining people can't even buy those basic living necessities with debt, as their debt is worthless. Example: Venizuela And reverse, when rich in those countries bathe in cash from resource exports, they spare no money for dumb excesses like gold plated Rolls Royces, and vaporize their trade surpluses very fast. You had to see Moscow in the time when oil was hitting $130... And... quite a few African countries without any resource exports do have neutral trade balances with China, despite China being their biggest trade partner
  • a008t 8y ago
    >Have you come to that conclusion yourself? Yes, I should have been more clear that this is just my opinions/speculation.
    • baybal2 8y ago
      >Yes, I should have been more clear that this is just my opinions/speculation. I'd said it's unexpectedly insightful for a talk on an internet forum. That's a very subtle line that I think only one out of 50 academicians around picked up. One fact that can be made for sure is that China been preparing for a scenario as bad as North Korean trade isolation for decades. Not puny tarrifs that they are under now. The whole arrangement of political alliances, preferred classes of assets abroad, currency swaps, infrastructure planning confirms that. May I know, what is your day job?
      • a008t 8y ago
        Have a CS academic background but work as a quant in finance.
• coldtea 8y ago
  >And what is the problem with that? If China wants to subsidize African development or consumption, what is the problem with that? If China loans more to African nations than they can repay, it is a loss for China, not for the African nations. Only Western powers are allowed to do that! After all Africa is their playground. How dare anyone else meddle with it?
  • deleted 8y ago
    [deleted]
  • adventured 8y ago
    That's not how it actually works, the parent is flat out wrong. Defaulting on loans from China doesn't happen in a vacuum. If the African nation in question defaults on big loans to China, their economy is going down. Millions of people will be severely harmed, possibly for decades. It's not just China that loses some money. To say nothing of the fact that China often requires repayment in physical assets of the country (such as taking physical ownership of a port for their own use, or oil, or cocoa), they don't just walk away if they're not getting cash repayments. First the country straps itself trying to repay China. That means they start missing payments on other smaller debts, they start squeezing the funding of their welfare systems and basic government functions. Everyone begins to suffer. Redirected government funding - which they can't afford to redirect - begins to harm the economy. Their credit rating gets downgraded, nobody will lend to them at this point. Only China is left, and they want harsher terms now, more of the national resources (see: the Venezuela model). Their currency tanks, inflation skyrockets, the people suffer immensely. The economy goes into perma recession, no foreign capital trusts the situation, investment plunges. Cycle and repeat the downward spiral, until you reach a point of social catastrophy.
    • debatem1 8y ago
      I'm unclear on why China would want to crush Africa into social catastrophe. Why do you think they would?
      • adventured 8y ago
• normo12 8y ago
  > If China wants to subsidize African development or consumption, what is the problem with that? They're following the West's playbook of buying influence at the UN, etc. It's Chinese "soft power". > If China loans more to African nations than they can repay, it is a loss for China, not for the African nations. Yeah tell that to the African countries that have struggled to repay debts on loans from the West for years. You might want to read "Confessions of an Economic Hitman" or Chomsky's "Hegomony or Survival".
• dmoy 8y ago
  > It is afraid to let Yuan appreciate and let the Chinese people enjoy increased consumption, Wait, increased relative to what? Their ppp has increased like 4x in recent memory, as have a lot of obvious visual indications of consumption.
• linkregister 8y ago
  > It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Chinese firms own commercial properties, ports, highways, and bridges across Europe and the United States. A common, although wildly exaggerated, meme is that Chinese interests buying up property in cities such as Vancouver and San Francisco drive house prices up to extreme levels.