The disturbing push of aggressive Chinese state capitalism

- June 2nd, 2013
Port of Chongqing

CHONGQING – I snapped this picture while covering Prime Minister Stephen Harper’s 2012 visit to Chongqing. One of the first shipments of frozen Canadian pork that had been allowed into China had just arrived at Chongqing’s massive port — it’s the one with the Canadian flag on it — and Canadian and Chinese officials were heralding its arrival as a sign of a new commercial relationship between the two countries. Later that day, Harper would sign the agreement to bring two pandas to Canada. (DAVID AKIN / QMI Agency)

Heriberto Araújo and Juan Pablo Cardenal are the authors of China’s Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking The World in Beijing’s Image. Today in the New York Times, they have a long interesting piece in which they argue that China’s “state capitalism” represents a real threat to the West and to the values — the rule of law, political freedom and fair competition — important to the West. And Canada — “a progressive bastion” — gets a prominent mention:

Europeans and Americans [and Canadians for that matter] tend to fret over Beijing’s assertiveness in the South China Sea, its territorial disputes with Japan, and cyberattacks on Western firms, but all of this is much less important than a phenomenon that is less visible but more disturbing: the aggressive worldwide push of Chinese state capitalism…

By buying companies, exploiting natural resources, building infrastructure and giving loans all over the world, China is pursuing a soft but unstoppable form of economic domination. Beijing’s essentially unlimited financial resources allow the country to be a game-changing force in both the developed and developing world, one that threatens to obliterate the competitive edge of Western firms, kill jobs in Europe and America and blunt criticism of human rights abuses in China.

….

IT is even happening in progressive bastions like Canada. President Obama’s refusal thus far to approve the Keystone pipeline project has made Prime Minister Stephen Harper’s conservative government turn to China to secure an export market for Canadian crude oil reserves. The Calgary-based oil industry has lobbied Mr. Harper to adopt a new diversification strategy that includes the construction of a controversial pipeline to western British Columbia, despite strong opposition from environmental groups, the First Nations aboriginal communities and the public. In the meantime, Canada also signed a Foreign Investment Promotion and Protection Agreement with China, which gives remarkably generous investment protection to the Chinese.With China in the center of debates over FIPA and the west coast pipeline, Canada’s government then approved the takeover of the Canadian energy giant Nexen by the Chinese state-owned oil firm Cnooc. The $15.1 billion transaction was China’s largest foreign takeover.Closer economic ties have had political side effects; the Harper administration now seems much more cautious in criticizing China’s human rights record. Given that Canada was until very recently one of the fiercest voices on China’s handling of dissidents, this is not only a remarkable 180-degree turn, but also a clear indication of how China’s economic influence can push the political agenda to the sidelines, even in the West.

Chinese loans have been crucial in countries like Angola that have faced threats of a cutoff in financing from Western creditors, the World Bank and the International Monetary Fund. Ecuador, Venezuela, Turkmenistan, Sudan and Iran have all faced such difficulties, and China has stepped in without political or ethical strings attached. Chinese statistics reveal little about these loans, but a study by The Financial Times showed that, between 2009 and 2010, China was the world’s largest lender, doling out $110 billion, more than the World Bank.

It is important to remember what is really behind China’s global economic expansion: the state. China may be moving in the right direction on a number of issues, but when Chinese state-owned companies go abroad and seek to play by rules that emanate from an authoritarian regime, there is grave danger that Western countries will, out of economic need, end up playing by Beijing’s rules.

Read the whole piece: China’s Economic Empire – NYTimes.com.

Categories: China, Politics

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4 comments

  1. Tom Duncan says:

    Well, duhhhhh!
    Our time with PM Harper at the helm has put us pretty much on the rocks. No tug in sight, except that Chinese one. hehehehehe.
    Justin time may be too late.

  2. Mark Collins says:

    From the end of this post at the Canadian Defence & Foreign Affairs Institute’s “3Ds Blog” (further links at original):

    “The Dragon’s Greedy Grasp

    More on the government’s turning in a Globe and Mail article here (by the way the paper’s “news” stories had a long history of bashing the government for endangering ties–read trade–with China during the government’s earlier days. Plus a post from November 2012:

    ‘Dealing with the Dragon Devil, or…

    …”When it comes to trade with China, we are all hypocrites now”. Andrew Coyne of Postmedia News writes the best exposition I’ve seen of the realities Canada–and many other countries–face…’
    http://cdfai3ds.wordpress.com/2013/06/03/mark-collins-the-dragons-greedy-grasp/

    Mark
    Ottawa

  3. Tannaberton Abacrombie says:

    I lived in China 6 years and found it quite docile and relaxing. The propaganda you hear is just that. It would be better for the world to play by Bejing’s rules if they want than be forced to play by Washington’s.

  4. Brian Timlick says:

    When we say “China” and policy, we really are referring to the Communist Party of China, and we should be careful of that, since it is not the Chinese people per se that make policy.

    The Communist party of China is using GAAP to their advantage and simply printing up the money to pay for products and services. If they want to build a road, they build one and put a value on it as an asset, and print up the value of the road to go to the next project. If they want to buy into the Tarsands, they place a value on the oil they are given rights to, and treat that oil as if it is simply in storage, print up the money and arrive on our shores with fistfuls of money, leaving us all googly eyes and claiming we need their investment money.

    What is even more alarming is the fact that they are not investing in anything that does not have a political return as well as an economic return. The political return is when they are able to turn off that industry or go on strike if you wish. Imagine if they owned a pipeline and turned it off to gain an advantage in trade talks! Or did what they did in Hong Kong when the British ran the city. Since HK got its water, electricity and natural gas from China, the lights would flicker at any thing the Communist Party thought the British could do.

    Don’t blame the Chinese people, when we are really dealing with a Communist Party that does have a huge political agenda and will pursue it even as we blindly accept their investments as positive change.

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