Choking on Chinese charity

Loosely translated and popularized as “Beware of Greeks bearing gifts”! in Virgil’s Latin epic “The Aeneid,” the high priest of Troy prophesied the walled city’s eventual destruction with a dire and ominous warning, “Timeo Danaos et dona ferentes” (I fear the Greeks, and those bearing gifts). The prophesy was eventually fulfilled with the giant Trojan horse left outside the high walls of that fateful city that was to cause the annihilation of the Trojans initiated by 30 Achaeans hidden within the hollow horse. 

In a time of geopolitical uncertainty and increasingly intolerant, if not combative military and economic superpowers, the pathetic weakness of such a strategically located nation as ours in disputed waters critical to competing titans are effectively our Achilles heel.

On one foot is an economy that seems to be getting weaker. We’ve conceded the law and order agenda to the authorities, surrendering to their wisdom and their novel approaches, and in its stead we’ve pinned hopes on the more rational economic managers. Unfortunately, nothing much has happened, courtesy of a coopted Congress comprised of clucking and cackling canards. Thus, the peso seems to be constantly seeking new depths as capital slowly flows to the United States where, in contrast, Wall Street keeps breaking historic ceilings.

On another foot, we have an ill-equipped, ill-trained and poorly disciplined police and security force dependent on the protective blanket provided by a superpower that the current President verbally abuses.

Indulge us a bit of imagery, if only to paraphrase the poet Virgil as we take stock of an emerging global economic reality that is quickly turning both necessary and unavoidable as a great and ominous beast looms now within our virtual gates compelling us to let it into our doors, just as the Trojan horse compelled an intrusion in the ancient and epic Aeneid.

Beware the Chinaman bearing silk and golden twine. Beware the serpentine dragon with its fiery blood-red eyes, flaming nostrils and snaking tongue as its monstrous head peers into our small and vulnerable economy there looming above us coiled, taut, poised and upright.

Simply paste that image, if you will, on the following instances where similarly vulnerable economies succumbed to the hypnotic charms of Chinese charity.

Let us start at the farthest reaches at the opposite side of the globe in the African continent where few expect China to be heavily invested and where Chinese debt is perhaps their most substantial financial liability for a strategically located continent just beneath the European Union and just across the Atlantic from the principal offices of the World Bank and the International Monetary Fund.

This short litany begins with the upsides of Chinese debt and equity investments in Africa. It, however, ends unhappily.

Cameroon is a small coastal country at the farthest reaches of the African continent bordered by Nigeria inland and its coast on the Atlantic. It is rich in iron, aluminum, oil and natural gas, each requiring high-technology port facilities for export through Cameroon’s coast. The first three are critical to the Chinese economy. Of the three, Yan Chang Logone Development, a subsidiary of Shaangxi Yangchang Petroleum has a $62 million contract for exploration and production.

From the Kribi Port on the Cameroon coast to roadways accessing urban centers, inland Chinese contractors are part and parcel of the debt and investment initiative and have been employed to develop an eventual industrial zone and shipping center in areas formerly merely resort towns.

While, indeed, the port is militarily a strategic dock for the Chinese navy, it is an economic multiplier that produces both sourcing and selling markets for the Chinese and the Cameroonians.

The flip-side of Chinese charity can be just as illustrative and behooves we learn lessons from these dichotomies. Across the border in Nigeria, a different story is told. While China funds Nigeria’s infrastructure, its incredibly shoddy and low cost goods flooding the Nigerian economy have caused both economic and social dysfunctionalities that range from deadly conflagrations caused by inferior electrical products to sub-market priced dumped goods, to layoffs in favor of Chinese labor.

But Africa is Africa. A continent long victimized by colonialists. Allow us to spin the globe to Asia and in our neighborhood see the impact of Chinese debt on an economy dependent on it and, upon a recent change in dispensation, now seeking financial independence and freedom from Chinese debt.

Barely two years ago after a new government had taken over Sri Lanka, its officials attempted to gradually disengage itself from its humongous liabilities worsened by a decade of reliance and virtual subservience to China. The costs of financial independence, however, catalyzed the effects of a debt trap where Sri Lanka either ended up canceling needed infrastructure programs or, in some cases, was compelled to wallow in virtual foreclosures by ceding as much as 80 percent of its projects to China.

True, our bias is showing. But extrapolate these examples into our vulnerable economy. Indeed, can we really afford China’s cheap and concessional charity?