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.
This handwringing on stuff like this is fairly transparent.
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.
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.
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.
“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.
I wonder where they could have got that idea from [1]
[1] https://en.wikipedia.org/wiki/Convention_for_the_Extension_o...
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.
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.