Colonisation 2.0: Enter The Dragon

://www.fastcompany.com/files/imagecache/panoramic_image/files/feature-100-china-africa1.Mr Jiang Jianqing, chairman Industrial and Commercial Bank of China (ICBC is the world’s largest bank) arrived in Nigeria on 16th June. Within two days, Alhaji Tanimu Yakubu, chief economic adviser to President Yar’Adua, has asked ICBC to practically fund Nigeria’s $500 million sovereign bond. So if the best Nigeria’s economic adviser can do is sell our assets for a piffling, we insist that he resign and for posterity sake please do not take up a teaching position – economics already has a bad name....Read the full article.

[Zanubia Wolf]

THANK HEAVENS FOR CHINA,!!

At least we might start t see some real Industrial work actually getting done in 9ija, They might not have the big Human rights Media Circus like the west!! Which is actually just a Facade!! a big pretense!! when you look at it closely, But at least they Get the JOB DONE!

All over Africa, Europe has had its fair share of Africa, what do we have to show for it?!?

Please CHINA ROLE ON!!

No nation is Insular. Lets try someone else

[Mark Lar]

Victor, this piece would have been more persuasive if you had presented it in a more logical and less disjointed manner. Do you think that the ewure(s), aturu(s) and akuya(s) in Aso Rock care about what happens to Nigeria and its resources?

[I Love Nigeria]

No Nigerian or African need to be afraid of China!

Nigeria and other African nations should diversify its investment and diplomatic strategies.... We must not hinge our plans on America and Europe alone... we have done so for decades and we have nothing to show for it!

America and Europe are using scare tactics to scare Africans about Chinese and to scare Chinese out of Africa... meanwhile...:

09 March 14 Saturday
http://www.parapundit.com/archives/006041.html

http://www.google.com/search?client=...ent+in+america

Obama Assures China We Can Pay Our Debts
The Obama Administration feels the need to reassure the Chinese government that America can afford to keep borrowing. I say America is even too bigger to fail than Citigroup. The Federal Reserve will bail out the government by inflating the currency. We'll avoid a default while wiping out debt holders.

“There’s no safer investment in the world than in the United States,” White House Press Secretary Robert Gibbs said yesterday at a briefing in Washington.

Gibbs was responding to comments from Wen that China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets,” Wen said at a press briefing in Beijing.

On the irony. That's like the drug dealer telling the druggie to stay healthy so that the drug dealer can keep making deals with the druggie. China is our enabler for irresponsibility.

In a nutshell: the Chinese government would ideally like the US to run trade surpluses with some other countries, run no government deficit, and otherwise conduct ourselves in ways that will ensure they can always sell their US Treasury bond holdings for a profit. But at the same time the Chinese government wants to buy large amounts of our bonds in order to depress the value of the Chinese currency versus the dollar so that Americans buy far more from China than Americans sell to China. China wants us to live beyond our means but to stay financially solvent.

As long as some countries want to buy large amounts of US Treasuries as a safe haven holding the US will run a trade deficit and go further into debt to other governments and central banks.

The market has decided that the US government is becoming less able to handle its debt long term.

The spreads on credit-default swaps for U.S. government debt jumped to 97 basis points Tuesday, nearly seven times higher than a year ago and 60% higher than the end of last year, to a level roughly in line with those of France, according to data supplied by Markit. The spreads also hit a record last week.

Bill Clinton, George W. Bush, and Barack Obama all got elected by the American people. Obviously we aren't showing signs of prudence in choosing elected officials for high office. This trend looks set to continue. So the higher insurance costs on US government debt seem a rational reaction on the part of the markets. One problem though: Which seller of debt default insurance for US sovereign government debt could possibly afford to pay off on default claims should the US government some day actually default?
By Randall Parker at 2009 March 14 05:44 PM Civilizations Decay | TrackBack

Comments
HellKaiserRyo said at March 14, 2009 11:02 PM

Yes, Clinton did cause some of the problems... along with Gingrich for passing policies that the tax base of the US such as "free trade."

BTW, electing Obama... I do not see how McCain would do better. Maybe Romney, maybe your favorite Tancredo would do better.
Bob Badour said at March 15, 2009 05:49 AM

I seem to recall saying the US lost the election when McCain was nominated. Personally, I fail to see the relevance of McCain's policies.
Randall Parker said at March 15, 2009 09:58 AM

HKR,

McCain being bad: That actually strengthens the point I am making. Americans are choosing bad leaders and even bad runners-up.
Anonymous said at March 15, 2009 12:51 PM

What is this, the Moscow times? Commies and fascists bickering over whose failed socialist state will implode first.

Spare me from the excitement!
Steve Johnson said at March 15, 2009 02:13 PM

How the heck is the United States government supposed to default on a debt that's denominated in a currency that they have the legal right to print as much of it as they please?

Clinton, McCain, Obama, Bush, are window-dressing. Washington is run by no one. It's an out of control machine that can't help but expand every single thing that it already does. It can't even get good information about whether or not any of this would be a good idea because every official media source only reports things to influence the bureaucracy.

Obama hasn't even come close to appointing all of the 1k+ people that require Senate approval and the government keeps rolling on doing pretty much exactly what it did before the election.

Fact is, as bad as the American people are at choosing leaders, we don't even really have that responsibility.
Eric Stratton, Rush Chairman said at March 15, 2009 02:37 PM

This is another Chinese shit-test, intended to prod and poke Obama and see how he reacts. First we had the naval incident (shades of the Chinese shoot-down on our spy plane weeks into Geo. W. Bush's first term) and now the Chinese threatening to have Obama knee-capped if we don't make good on our bonds.

Nobody held a gun to the Chicoms' heads and made them buy this debt, they did it willingly. This is nothing more than Beijing trying to see how much they can bully Obama. And it looks like he failed the test, since he immediately started to tap dance, repeating the "no safer investment" platitudes. He should have just ignored it, and if asked at all, just said that the notion that we would default is so silly as to make it not worth commenting on.
Bob Badour said at March 15, 2009 02:47 PM

Eric,

Are you trying to suggest tap dancing is in his blood or something?
HellKaiserRyo said at March 15, 2009 06:09 PM

What are the relative odds of a US sovereign default compared to countries such as Japan and Great Britain?

Maybe we can say Great Britain defaulted on their debt already as they plan to utilize QE.
kurt9 said at March 15, 2009 06:55 PM

The Chinese will be able to make good use of this issue, like getting the U.S. government to drop the wassau restrictions on the import of advanced semiconductor process technology into China as well as telling U.S. politicos such as Clit-bitch and Goering where to shove it on global warming. It is finally time that some of the people in the rest of the world stand up to the idiots in Washington D.C.
Skot German said at March 15, 2009 08:03 PM

Why does China thing it is to their advantage to hold US treasuries rather than spend them? If China would start spending their saving on US goods it would help get the US economy out of a recession and it would lessen China's risk of having their savings devalued.
Stephen said at March 16, 2009 07:07 PM

Skot said, "If China would start spending their saving on US goods it would help get the US economy out of a recession"

What does the US manufacture that isn't better and cheaper elsewhere? No doubt there must be something, but there aren't enough 'somethings' to make an appreciable dent in the US deficit.
Bob Badour said at March 17, 2009 09:31 AM

Stephen,

And the reason for that is largely the bonds China owns. If China did not manipulate prices, things from China would be nowhere near as cheap as they are.
Fong said at March 17, 2009 10:43 AM

"And the reason for that is largely the bonds China owns. If China did not manipulate prices, things from China would be nowhere near as cheap as they are."

Maybe it is better for China to hold the bonds and keep Chinese stuff cheap and their people employed than to allow it to get cheaper to make stuff in the US?
Bob Badour said at March 17, 2009 07:25 PM

No, it isn't better. The overall policy is inflationary by hiding growth of the US money supply behind growth of China's money supply; even though, the effect on consumer goods prices in the short term was deflationary. The inflation simply appeared in asset prices until recently, which in the end collapsed into a deflationary economy that will probably involve the irony of increases in consumer goods prices. That spells massive economic hardship for Americans.

It basically destroyed much of America's wealth producing capability (capital) and in the end destroyed much of America's wealth. That's not better. That sucks.
Fong said at March 18, 2009 07:29 AM

"No, it isn't better."

I should have said "better for them." I wasn't clear.
Bob Badour said at March 18, 2009 01:01 PM

I am not even convinced it is better for the Chinese. I expect there will be massive dislocation in the Chinese economy too, if there have not already.

And at some point, Europe and North America will engage the trade war.

[I Love Nigeria]

Chinese money, the Yuan, works for America, it should work for Nigeria as well! No worries!

http://www.slate.com/id/2213836/
Slate Magazine
today's papers
Beijing Gets the T-Bond Blues
By Ben Whitford
Posted Saturday, March 14, 2009, at 6:01 AM ET

The Washington Post and the New York Times lead on Chinese Premier Wen Jiabao's demand that the Obama administration guarantee the safety of Beijing's trillion-dollar investment in U.S. Treasury bonds. "We have lent a huge amount of money to the U.S.," Wen said. "Of course we are concerned about the safety of our assets." The Obama administration rushed to assure Beijing that its investments were secure; analysts say that any move by China to dump its vast U.S. debt, or even merely to cease purchasing Treasuries, would drive up the cost of U.S. government borrowing and cause a spike in mortgage rates for millions of U.S. homeowners.

The Wall Street Journal tops its world-wide newsbox, at least online, with some rare economic good news: This week was the stock market's best since November, prompting speculation that the economy could finally be close to bottoming out. "There is a real economy out there, and it has a chance of doing better," said one relieved trader. The Los Angeles Times leads on news that a recently adopted plan to fill gaping holes in California's state budget is already seriously out of whack; one analyst says the state is on course for a shortfall of more than $8 billion.

Speaking at a rare meeting with Chinese journalists, Wen said that he was "definitely a little worried" about the security of China's vast holdings of U.S. debt. Economists say his concerns are reasonable: Efforts to boost the U.S. economy by taking on more debt and printing more money could weaken the dollar, diluting the value of Treasury bonds. Still, there's little sign that China will reduce its U.S.-debt investments, or slow its purchase of T-bonds; any sell-off would risk flooding the market, devaluing China's investments still further. Besides, analysts say, a Chinese sell-off would make it far more difficult for the United States to spend its way out of the current recession—and that, in turn, would take a heavy toll on the already-flagging Chinese export market.

Wen's words were widely perceived as economic fighting talk, perhaps aimed at dissuading U.S. policymakers from adopting a "buy American" strategy that could endanger Chinese exports or at heading off U.S. efforts to challenge Beijing on currency issues. Still, reports the WSJ, the Obama camp moved swiftly to assuage Beijing's concerns, with senior economic officials declaring that U.S. bonds were secure and that America's fiscal policies were sound. "There's no safer investment in the world than in the United States," said White House spokesman Robert Gibbs.

The NYT off-leads with word that, in an attempt to signal a break with the Bush years, the Justice Department has declared that it will no longer use the term "enemy combatant" to describe the 241 detainees being held at Guantánamo Bay. But the department also reasserted its right to detain terror suspects without charges and provided a definition of those who could be held that was not substantively different from the framework offered by the Bush administration. Lawyers for the detainees said they didn't expect the revised terminology to help their clients; still, the WSJ notes that the shift in emphasis hints at the Obama administration's likely use of civilian courts, rather than military tribunals, to try those being held at the camp.

In a front-page report, the WSJ finds evidence of lingering tensions between Protestants and Catholics in Northern Ireland, where a policeman and two soldiers were murdered this week. By contrast, the NYT reports that the killings brought the country together in protest; at the police officer's funeral, the priest declared the violence "an attack on the whole population of Northern Ireland".

With the stock market finally having a good week, the administration sounded a cautiously optimistic note about the overall health of the U.S. economy. Obama—who, the Post notes, has lately appeared increasingly eager to blame the financial crisis on his predecessor—declared himself "confident about America," while his chief economic adviser, Lawrence Summers, said there were "modestly encouraging" signs that consumer spending was stabilizing. The Post reports the stock-market rally on the front of its business pages—along with news that to cut costs the paper is to scrap its stand-alone business section and merge business coverage into the main A-section.

All the papers pick over the fallout from the economic crunch. The NYT reports that recessions encourage entrepreneurialism but also that hard times are leading some to delay nonessential medical treatment. The Post reports that the barter economy is booming as companies and consumers struggle to make ends meet; the WSJ notes that analysts are revising their views of the underground economy and now believe that informal trade may help stave off urban decay and unemployment. The Post reports on an airfare war that's making travel remarkably cheap for those who can still afford it; the NYT profiles an airplane repo man, who's earning big bucks repossessing private planes. Even America's landfills are feeling the pinch: Garbage-collection levels have dropped by as much as 30 percent as U.S. consumers buy—and throw away - less stuff.

Jim Cramer got roasted this week by Daily Show host Jon Stewart for failing to warn the public about the impending financial crisis; the Post writes enviously of Stewart's ability to puncture "the balloons of the powerful with a caustic candor that reporters cannot muster." The NYT compares the episode—apparently favorably—to a Senate hearing: "Mr. Stewart treated his guest like a C.E.O. subpoenaed to testify before Congress: his point was not to hear Mr. Cramer out, but to act out a cathartic ritual of indignation and castigation."

And finally, bad news for mosquitoes: The WSJ reports that rocket scientists are building Star Wars-style smart lasers capable of recognizing the blood-sucking bugs and shooting them out of the air. The aim is to use the death-rays—perhaps mounted on unmanned drones—to keep mosquito populations at bay and help prevent the spread of malaria. "You could kill billions of mosquitoes a night," says one excited researcher. "Slay them all!"
Ben Whitford writes for the Guardian, Mother Jones and Newsweek.

Article URL: http://www.slate.com/id/2213836/

Copyright 2008 Washingtonpost.Newsweek Interactive Co. LLC

[Eace]

The Chinese have money, a lot (a lot) of people and very little natural resources. They need quite a lot of things that their money cannot buy unless they exchange it for those resources - food, minerals especially for power generation, jobs for the rural/urban dwellers, freedom of speech, clean drinking water, etc. Yes, we must note that they seem to have some control over American finances but the companies that generate these Chinese funds are largely foreign owned companies, many of them American outsources.

Nigeria has a lot of people; a lot of resources; arable land for agriculture; intellectuals; human labour - skilled and unskilled; is it me or is there something wrong with our continued reliance on MONEY MONEY MONEY - Capital is not the only necessity for a viable enterprise - there is also - land, human labour, natural resources, infrastructure, machinery etc. Once MONEY is flashed at the Nigerian economy, we lose sight of everything else - we think our problem is that we must have (not create/generate) wealth. We think we have problems because we don't have money.

America is one of the highest country debtors to international agencies. Yet it manages to dictate to other countries over anything from nuclear proliferation to democracy. Britain has little natural resources but it manages to dictate the path of the international trading system. So so some other European countries. South America has joined too. Asia, in particular China and India, are catching up with big brother Japan - adapting the international economic systems to their own internal systems. They attend all international conferences, monitor every business opportunity and then go home and act wisely - they set internal regulations to suit their development stage.

And what does the Giant of Africa do? It waits. It sits and waits for someone with money to come and do her work for her. Yes, once China gives us money, everything will be alright. Should we try to imitate these countries that have developed enough to now lend us aid? No. We should sit and wait and hand over the keys to our homes to them. Because they have money.

Yes, in Nigeria, that's all that matters. Haba, after all, na money we go chop. Money is the miracle we have been praying for - it has the hands and feet and the head to think us out of poverty. Thank God! May Allah be Praised! Roll in, China.

[Fon]

Originally Posted by Eace

America is one of the highest country debtors to international agencies. Yet it manages to dictate to other countries over anything from nuclear proliferation to democracy. Britain has little natural resources but it manages to dictate the path of the international trading system. So so some other European countries. South America has joined too. Asia, in particular China and India, are catching up with big brother Japan - adapting the international economic systems to their own internal systems. They attend all international conferences, monitor every business opportunity and then go home and act wisely - they set internal regulations to suit their development stage.

And what does the Giant of Africa do? It waits. It sits and waits for someone with money to come and do her work for her. Yes, once China gives us money, everything will be alright. Should we try to imitate these countries that have developed enough to now lend us aid? No. We should sit and wait and hand over the keys to our homes to them. Because they have money.

Roll in, China.

I recall the book THINK AND GROW RICH
I dare to add THINK "OUT OF THE BOX" AND GROW RICH..

We need international investors.. but lets hope our collective position as a country is protected in the deal..(my little knowledge is that we usually are not) may be the broker of the deal would but one may blame this on corruption again...

[Eace]

Originally Posted by Fon

I recall the book THINK AND GROW RICH
I dare to add THINK "OUT OF THE BOX" AND GROW RICH..

We need international investors.. but lets hope our collective position as a country is protected in the deal..(my little knowledge is that we usually are not) may be the broker of the deal would but one may blame this on corruption again...

Fon,

How does inviting international investors equate with thinking outside the box in this circumstance? Investment is aid with strings attached - the investor expects profit.

I have no problems with investment; infact we do need investment but we go about it wrongly. An investor has his motives; we don't seem to have identified ours.

[K_Station]

Every country has a right to seek prosperity and to project its power abroad, including Nigeria and China. It is up to us as a partner to know what we want out of the relationship and protect our own interests. Ultimately, China is looking out for China and Nigeria must clearly define and defend her own national interests.

Unfortunately as alluded to by the author, Nigeria almost always end up with the short end of the stick in these bilateral arrangements. One can only hope that things are different this time.

[M. Akosa]

Big welcome to China!!!
Any day, any time, you are good for Nigeria and the rest of Africans. At least you are not coming with religion and politics, with big guns and ammo of neo colonisation under the cloak.

Americans also among the other westerners are also licking your ass, begging for your cash, cheap goods, manufactured products and all sorts. Why not Africans? if you can save us from under development and poverty.

Please show me the money, who cares???

[olubadan]

(QUOTE=K_Station;366057) "Every country has a right to seek prosperity and to project its power abroad, including Nigeria and China. It is up to us as a partner to know what we want out of the relationship and protect our own interests. Ultimately, China is looking out for China and Nigeria must clearly define and defend her own national interests.
Unfortunately as alluded to by the author, Nigeria almost always end up with the short end of the stick in these bilateral arrangements".


Exactly every country strive to harness their potential both locally and internationally to their own advantage... However foreign direct investment is good new for the Nigerian economic particularly after the global recession what Nigeria must do is to properly safe guarded it own interest in any bilateral agreement signed... however it is also pertinent to note that our trade with China stands at $11 billion. Which signifies that we have a strong bilateral relationship with them. That over shouldn't translate into complacency

[Danmeka]

Victor , I see your point,another form of Chinonasation of our Godly given resources, no wonder our seaports are congested with sub standard goods.When will our leaders learn, part of the re-branding process.

[Fon]

Originally Posted by Eace

Fon,

How does inviting international investors equate with thinking outside the box in this circumstance? Investment is aid with strings attached - the investor expects profit.

I have no problems with investment; infact we do need investment but we go about it wrongly. An investor has his motives; we don't seem to have identified ours.

Hence one has to learn to THINK and i dare reiterate THINK OUT OF THE BOX.
I think the average investor sees an opportunity takes it and its the representative of my dear country (who signs the contract for instance) that have to be thinkers to maximize the gains from the relationship or deals

Hope I have clarified my points..