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bArray

So the success story here is:

> [..] the yuan is now its main currency of trade.

1. They lost their own currency.

> [..] it is also increasingly populated by many from across the border hoping to benefit [..]

2. The 'investment' into the local area is actually being used to employ imported Chinese workers.

> Jua, a 24-year-old truck driver, feels he has been "kept alive" by China. He is paid in yuan every month by a Chinese cargo owner.

3. Local businesses are being purchased or replaced with Chinese owners.

When they fail to pay back some loans [0], they will be forced to hand over large strategic areas, such as their mining lands [1] on a 99 year lease. Over the next 10 years we will likely see the erosion of Laos sovereignty.

[0] https://www.voanews.com/a/laos-faces-debt-crisis-after-borro...

[1] https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(201...

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What happens when you fail to pay back loans to western companies? "oh no worries, we'll just write it off and you keep all your assets"?

This handwringing on stuff like this is fairly transparent.

There is supposed to be due diligence on the issuing of loans, like a person getting a mortgage for a house, but for an entire Country. It is well known that the likes of Goldman Sachs, JP Morgan, etc, have been acting immorally in this regard. As far as I'm aware, Western loans are recouped through assets seizure, and there are large programmes in place to write off debt for those who would be perpetually bound by it.

That said, the idea of a 99 year lease seems particularly troubling. It's essentially the time frame where everybody whom agreed to the arrangement will be long dead, and generations of people would have been raised not knowing the land was in fact leased. I suspect kicking people out of somewhere they have been for almost 100 years is not easy.

Worse still is that the land acquired via the 99 year lease will be highly profitable land, with all profits and resources used for China's benefit. This further entraps the local Laos economy, where mining appears to make up major portion of their exports. Not only will they still be saddled with debt, they will now be less capable of repaying it.

All true, but I guess the Chinese will point to https://en.wikipedia.org/wiki/Convention_for_the_Extension_o...:

“In the wake of China's defeat in the First Sino-Japanese War (1894–1895), the British took advantage of the other European powers' scramble to carve up the country and forced the treaty on the weakened Chinese government.

Between 6 March and 8 April 1898, the German government forced the Qing Empire into a 99-year lease of the Kiautschou Bay concession for a coaling station around Jiaozhou Bay on the southern coast of the Shandong Peninsula, to support a German global naval presence in direct opposition to the British network of global naval bases. This initiated a series of similar lease treaties with other European powers. On 27 March 1898, the Convention for the Lease of the Liaotung Peninsula was signed between the Russian Empire and the Qing Empire, granting Russia a 25-year lease of Port Arthur and Dalian, to support Russia's Chinese Eastern Railway interests in Manchuria. Consequently on 28 March 1898, Britain, anxious of the Russian presence in China, pressured the Qing Empire into leasing of Weihaiwei, which had been captured by the Empire of Japan in the Battle of Weihaiwei, the last major battle of the First Sino–Japanese War, for as long as the Russians occupying Port Arthur, to make checks and balances of Russia. During the negotiation, the British stated that they would further request for leasing of land if any foreign concession took place in Southern China.

On 10 April 1898, the French, who also desired Chinese territory, forced the Qing Empire into a 99-year lease of Kwang-Chou-Wan to France to support France in southern China and Indochina. In order to maintain the balance of powers, Britain ordered Claude Maxwell MacDonald to pressure Qing Empire into allowing the expansion of Hong Kong for 200 miles (320 km). As a result, the Convention for the Extension of Hong Kong Territory was signed on 9 June 1898 in Beijing (Peking). The contract was signed to give the British full jurisdiction of the newly acquired land that was necessary to ensure proper military defence of the colony around the island. Some of the earliest proposals for the land's usage in 1894 included cemetery space, an exercise ground for British troops as well as land for development. From the British perspective concerns over security and territorial defence provided the major impetus for the agreement.”

Over a century ago, but more forced upon them than this is upon Laos.

That's only if you ignore that the whole of what history thinks is "the war for independence" was really a war of conquest where Laos stopped being a French colony and became a Russian/Chinese one. "Come on now, you have to honor this loan aggreement, the guys we installed with our tank columns in 1975 signed it..."

> That said, the idea of a 99 year lease seems particularly troubling.

I wonder where they could have got that idea from [1]

[1] https://en.wikipedia.org/wiki/Convention_for_the_Extension_o...

At least there is now precedent for breaking these contracts now too.

> I wonder where they could have got that idea from

It was done during the time of the British empire and was recognized for being bad. The entire idea back then _was_ to permanently capture Hong Kong - which is why it is troubling to see China do exactly the same today. It's not a model that should be followed and is not a justification for doing it in modern times.

The IMF and World Bank regularly forgive loans.

Yes! Western companies are much more willing to do due diligence before issuing loans because they don't (at least these days) have an army to expropriate assets when their debtors default.

This is an actual significant difference between China and the West: China is much more willing to invest in countries with less capable governments and relatively weaker rule of law because the Chinese state is underwriting the loans and has much more weight to throw around.

There's a reason why US companies are much more reluctant to invest in developing nations.

This is a reason, but there are other reasons too. For example, developing nations are often full of corrupt practices. This typically is not a huge problem for investors, you just pay a few bribes, it’s a cost of doing business. What is a problem, though, is laws like Foreign Corrupt Practices Act, which makes it a crime for US investors to pay bribes in foreign countries. I’m quite sure that it feels very moral to ban that, and it totally had no protectionist intent whatsoever when it was passed, but the practical outcome is that if doing business in a country is impossible without paying a few bribes here and there (and it is in most poor countries, low trust in institutions is one of the reasons they are poorer than us in the first place), they will not get any foreign investment, which will keep them poor.

The big reason is that US has better choices. People don't understand the concept of risk and reward, you always put your assets on less risky and high reward projects. The only difference is that what's available to people are very different. Why would you invest there if you have better places to put your money? Companies are not stupid. US is high on the food chain.

> People don't understand the concept of risk and reward, you always put your assets on less risky and high reward projects.

The rewards being looked at may be different: the goal of private (non-government) American businesses may be to make money, the goal of Chinese entities may be something else.

No, it is the same. Developing world would wish to have easier ways to make money. They wish to have big brands, good profit margin. They DO NOT have it. That's why if you go to poor countries, people can take a job risking their lives for money. It is hard to understand for westerners, but it is the reality of this world.

Western companies and governments are far more forgiving of these situations than the Chinese are.

Countries go back to the IMF over and over asking for forgiveness and extension of loans which are provided at far below market rates, and as long as you aren’t doing stupid shit like converting your economy to run on Bitcoin or using those loans to cut taxes ahead of an election, you will probably be able to continue doing that.

Western loans also don’t tend to require you to use western subcontractors who will fly in unskilled laborers from their own countries to do the work instead of using the unemployed and large local working population.

The success story is Laos, a shit tier landlocked country with no development prospects has defied all sense, roughly parallelling trajectory per capita GDP growth with booming Vietnam next door, who has the option of replicating maritime export led growth. There's no reason Laos should be doing better than Cambodia unless prudently aligning with PRC interests.

Laos' only short/medium term potential on her own is digging rocks or low end labour. But with PRC assistance, Laos can also become trail transit hub linking region and become energy exporter (battery of IndoChina) by having the privilege/permission as first downstream Mekong country that can harness left over hydropower, using infra PRC built. And obviously serving as PRC proxy or ceding sovereignty of control over said power network to allow PRC to influnece region via electricity and water. For landlocked Laos, that's about as, in PRC parlance, "win-win" as it gets.

Yes, Chinese workers but work still gets done. This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way.

Perhaps instead of criticizing China you should criticize the west for not besting China? Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia? IMF and worldbank also hold a ton of debt on developing countries. I mean, I like to think I am the last person to support the CCP but bullshit is bullshit!

Risk. Yes there are laws preventing or at least discouraging western companies from investment, but these are also inherently risky loans. China seems to have a larger appetite for risk. Higher risk, higher reward, but it can also backfire suddenly and spectacularly.

That's understandable but my point was criticizing China for taking on risk (and reducing it by using their own people) when our countries and businesses aren't willing is a bit b.s.

The livelihoods of people changed for the better.

> This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way.

I disagree. It is sometimes better to do nothing if the alternative causes more problems than it solves. Laos' time would have come naturally given stable government and consistent investment. They are now on a fast-track to failure.

> Perhaps instead of criticizing China you should criticize the west for not besting China?

As I said before, if a better solution cannot be proposed, it is better to do nothing, rather than an action that will most certainly end in failure. Without a stable government in Laos, all investment will likely be misused. It is up for the Laos people to decide when they are ready.

China is also trying to become a world leader, it therefore opens itself up to criticism. There is a lot of responsibility if you want to wear large shoes.

> Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia?

Europe isn't accepting charity from China, if anything it is the other way around. China receives favourable trading terms because they are a developing Country. The belt and road is not being built by China as a charity project, it is directly for their own economic gain.

> IMF and worldbank also hold a ton of debt on developing countries.

They do, but this is something that is currently a work-in-progress. Debt forgiveness is now more common and there is increasing regulation regarding issuing of loans to debt-trap companies.

> I mean, I like to think I am the last person to support the CCP but bullshit is bullshit!

I have no idea of your background, but you do appear (at least in this case) be supporting to actions of the CCP to debt-trap Laos.

What datapoint are you using to say laos will fail? Doing nothing is not better when hospitals, roads,etc... are being built. The people that are benefiting from those will disagree.

> It is up for the Laos people to decide when they are ready.

No it is not. Laos is a socialist/marxist state and their legitimate government has decided they are ready. Period. Outsiders have no right to tell Laotians to endure poverty and suffering and wait for capitalism, that is cruelty! They have the right to fight poverty by any means they desire.

> China is also trying to become a world leader, it therefore opens itself up to criticism. There is a lot of responsibility if you want to wear large shoes.

For sure, from uyghurs, south china sea to zero covid, I criticize the CCP and dislike them. But in this situation your criticism (if you are a westener in a democracy) is hypocritical is it not? The CCP is doing it wrong so they should do nothing and let them suffer like us? If you enjou capitalism then you should compete against china and do better or it just sounds like you are yet another westerner trying to shape other countries to a "superior" western way (some call it neo-colonialism).

> Europe isn't accepting charity from China...

That was not my suggestion and what you said about China's intentions is right. My point was Europe can sell to and buy from China, India and more with the belt road, they can profit by trading with like 50-65% of the world over one trade route. Of course, unless asia and africa is beneath europe to trade with ( which isn't the case because they already do trade).

> Debt forgiveness is now more common and there is increasing regulation regarding issuing of loans to debt-trap companies.

When the west was indebting other countries via imf/worldbank it wasn't a problem? And China isn't capable of debt forgiveness/re-structuring like the benevolent west?

> but you do appear (at least in this case) be supporting to actions of the CCP to debt-trap Laos.

Yes, that is correct. I support Laos' right of self-determination and respect their sovreignity and believe China is acting like any good capitalist in this case. The west should have been a better capitalist. But this isn't new. If you look at the colonization of the americas, europe chose to import slaves instead of employ their own people and eradicated governemnts and empires because their way was superior and they can't stand to respect the ways if the natives or allow them to self-determine and choose how to live and govern themselves, this pattern repeated in africa and after the division of former colonies and cold-war era invasions (circling back on how laos became the most bombed country because america invaded vietnam to contain China (pentagon papers)), subversions and proxy wars to contain the inferior communists and now that pattern continues with the rise of China.

My fear is China will beat the arrogant west at its own game -- capitalism! And as an American at least, I would much rather have America as the leading and influential super power. What I see and hear is how disconnected much of the west is from poor countries and how their suffering and poverty is nowhere near grasped by the plurality of the west.

> My fear is China will beat the arrogant west at its own game -- capitalism! And as an American at least, I would much rather have America as the leading and influential super power. What I see and hear is how disconnected much of the west is from poor countries and how their suffering and poverty is nowhere near grasped by the plurality of the west.

Then is your problem that America isn't doing the debt trapping? Am I understanding that correctly?

As a an European I very much dislike the thought of this being a necessary evil, as it will most likely result in more suffering in the long run. But maybe that's where I'm wrong?

Not at all, is it not possible to succeed without debt trapping? If you build a road, you can agree to collect tolls on it and require a percentage of that is paid back to the construcrion company forever. You can structure and restructure the debt as needed, use your workers like the Chinese. Is the only reason masses of westerners visit asia to invade? I do not approve of CCPs ways but until the west does better and competes it has no place criticizing China.

The obvious datapoint that Laos will fall is the failure of all the other Belt and Road initiatives.

Sri Lanka is the obvious one. But even Pakistan has lost access to vast swathes of its territory which are policed by the Chinese, and has little to show for it. The infrastructure being built’s only purpose is to make transport of Chinese goods easier.

Sri lanka is in talks with China to restructure debt and Pakistan is a nuclear power it won't just lose territory unless it was intentional, hard to say they have little to show for it when the road isn't complete.

Why should the western do the dirty jobs? It is the same as different jobs taken by immigrates and locals. Why not selling a bag made by other people, slap on a logo and sell it for 99% profit?

All China is doing is giving money to politicians and/or dictators for their short term benefit and in return those politicians and dictators are giving China massive long term benefits.

Western countries shouldn’t be beating China at this game because it’s a fucked up game that is very obviously designed to play the decision makers’ interests against the interests of the nation and its people.

> employ imported Chinese workers

Isn't what you quoted contradicted this? Jua is not a Chinese name.

I thought what I wrote was quite clear. They import Chinese workers to do the infrastructure development and the local people receive some small temporary benefit from the net import of Chinese migration.

In this case the Chinese workers build skyscrapers that Laos cannot economically make use of using Chinese materials and Chinese workers, and a truck driver in Laos benefited from this as they need more business in the local area. The profits from his work got to the Chinese business owner.

It's a Chinese invasion in slow motion. The same as Africa.

One day, these people will wake up and realise that they're second class citizens in someone else's country.

Forget about failing to pay loans. If the place is financially successful and lots of Chinese have interests there, the CCP will just declare it's Chinese.

Straight from the Russia playbook.

China would never be so Loas'y.

They can just declare the local people as terrorists and send them off to re-education camps for free hard labour. It's not as if a communist Country has never done that before, or even that the CCP doesn't do exactly this today in Xinjiang and Tibet.

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