Tag Archive for: china

by Ivan Phell Enrile, Policy Officer APRN

(first published by SLUG Nettverk for rettferdig gjeldspolitikk (Debt Justice Norway))

In the last fifteen years, the world has seen China’s impressive rise as a major player in the international development finance. In such a short period, China has transformed from being an aid recipient to a net aid donor, rivaling traditional major donors and lenders. It has also financed big ticket infrastructure projects in mostly low-income countries.

A number of factors are driving China’s profile rise in global development finance. Despite its growing economic influence, its role in major international financial institutions such as the US-led World Bank and Japan-led Asian Development Bank (ADB) remains limited. In response, it has promoted the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund with a view to bridge the huge financing gap in infrastructure investment demand and supply in Asia-Pacific. The ADB and World Bank not only failed to meet the demand for infrastructure investment in developing countries but also came with tighter conditions such as market-oriented reforms. China has taken advantage of this not only to edge out Japan and US in the region, but also to enable it to offload some of its excess industrial capacity, secure markets and raw materials to support export activity, and arrest China’s economic slowdown.

President Xi Jinping’s Belt and Road Initiative aligns with China’s economic imperative “Going Out” to maintain its existing growth pattern and expand this overseas. The BRI will spread China’s tentacles across Asia, Africa, Europe, and Oceania via “The Belt” which will recreate the old Silk Road land trade, and the “Road” which will create a sea-based trade route spanning several oceans. This ambitious initiative is expected to spur investments in large-scale gas and oil pipelines, roads, rails, and ports as well as link economic corridors.

The BRI is an evolving design. It is not limited to infrastructure; it includes “financial integration,” “cooperation in science and technology”, “cultural and academic exchanges”, and “trade cooperation mechanisms”. The BRI is also expanding geographically. In September 2018, Venezuela announced joining the New Silk Road commercial plan. Venezuela follows Uruguay, which was the first South American country to receive BRI funds.

So what are the key concerns of peoples in the Global South with regard to Chinese development aid?

Collateralizing sovereignty

Chinese loans and investments have been heavily criticized for their transparency deficit. Information on terms and conditions of Chinese loans is scarce to nonexistent and data on lending from China’s development banks are not standardized. Deficiencies in accounting could mean that the international policy community may be in the dark regarding many developing and emerging countries’ external debt situation.

As yet another debt crisis among poor and underdeveloped countries loom in the background, China’s growing ownership of key infrastructure as a result of, or built into, the terms of its loans is a cause of worry. The media is abuzz with talks of so-called China’s debt trap diplomacy. The strategy seemingly consists of China providing billions of dollars of loans to poor countries and once unable to pay, are forced to give up their natural resources and strategic assets as collateral. An oft cited case is Sri Lanka’s hand over of a strategic port to China on a 99-year lease after the former could not repay its more than $8 billion loans from Chinese firms.

Business investment disguised as official aid

Chinese official aid has often been cast as “conditionality-free” making it seemingly more attractive for developing countries. However, Chinese official aid, according to a study conducted by AidData, is intended for commercial projects and loans that are required to be repaid with interest. As observed by Matt Ferchen from the Carnegie-Tsinghua Centre for Global Policy in China, “China’s aid is only a very small part of what it considers to be development engagement, which often simply means doing business deals”.

According to Antonio Tujan, Jr., activist from the Global South, Chinese development assistance in 1990s under Deng shifted its focus on economic and infrastructure development to promote Chinese corporate sector. Since Chinese corporations are both public and private, their overseas engagements are both investments and official aid. Thus, there is no bidding as in traditional official development assistance or ODA; projects are awarded to Chinese firms as investments. In BRI, 90% of projects are being built by Chinese companies.

In the Philippines, 3 infrastructure projects with Chinese funding are in the pipeline: the Chico River Pump Irrigation Project, the New Centennial Water Source-Kaliwa Dam Project, and the North-South Railway Project-South Line. According to the country’s socioeconomic planning Secretary Ernesto Pernia, the Philippine government would select among 3 Chinese companies. This is a fertile ground for corruption, according the Philippine Supreme Court Associate Justice Antonio Carpio, since said firms can simply collude and agree among themselves on who will corner which project.

Furthermore, this arrangement is biased against domestic business and entrepreneurs. While Chinese firms and contractors will profit from their country’s “development assistance” projects, Chinese aid will reinforce dependency and potentially erode the nascent and fledgling industries of poor and underdeveloped countries.

In some instances, Chinese-financed projects are not only built by Chinese companies but also use Chinese workers and materials. Such was the case with the construction of the Bar-Boljare motorway in Montenegro. In the Philippines, the influx of Chinese workers for the government’s mega-infrastructure program Build, Build, Build is questioned amid high unemployment rates in the country.

Fueling the climate crisis

Chinese companies have been investing heavily in coal power especially in BRI countries. According to Global Environment Institute China is currently involved in coal power projects in 65 BRI countries. Between 2001 and 2016, China was involved in 240 coal power projects in BRI countries, with a total generating capacity of 251 gigawatts. The top five countries were India, Indonesia, Mongolia, Vietnam and Turkey. The research also reveals that China’s involvement in coal power projects in Belt and Road Initiative countries has been increasing overall.

If the trend continues, China will lock these countries into coal-power assets that will damage people’s health and well being and exacerbate climate change.

Suppression of rights and militarism

China’s megaprojects come at a sharp cost to human rights, causing massive displacements of communities. The China-funded New Centennial Water Source Kaliwa Dam Project in the Philippines is set to displace the Dumagat-Remontados indigenous peoples who have been living in the area and enjoying a symbiotic relationship with nature for centuries. Until now the indigenous peoples have not been given a Free Prior and Informed Consent to the Kaliwa Dam as required by national laws. The dam will be constructed over the Infanta Fault and will be a sword hanging over the head of 100,000 people living downstream the Kaliwa River.

Such megaprojects have faced fierce resistance from affected communities. Consequently, private security companies serving Chinese companies in BRI projects have grown exponentially. In 2013, there were 4,000-registered firms, employing more than 4.3 million personnel. By 2017, there were 5,000 firms with around 5 million staff.

Chinese aid may not be significantly different from its Western counterparts after all. For China to increase its aid effectiveness it should increase grants than loans, promote partnerships that foster mutual respect, solidarity, and non-exploitation, and ensure that it does not replicate the same neocolonial relations that have tied peoples and nations to centuries of peonage and maldevelopement.

On this issue:

Development Aid With Chinese Characteristics?

Activists, CSOs bolster call to reject RCEP in Bali negotiations

APRN Pushes for Effective Development Cooperation Amidst Shrinking Spaces for CSOs

Goals vs Realities: Looking back at the Peoples’ Forum & APFSD 2019

Quo Vadis Goal 16? A people’s review of the state of peace, justice,
and inclusion in Asia Pacific

Day of the Landless Statement: Reclaim our Lands, Reclaim our Future!

New Publication: The Peoples’ Global Conference Against IMF-World Bank in Bali, Indonesia

Cross-regional mega-FTAs are now being preferred over bilateral and plurilateral trade agreements as imperialist powers compete for cheap labor, sources of raw materials, and markets. Workers of the South are set to bear much of the brunt of this shift, as new sets of trade rules would further permit monopoly capitalists to dictate the cheapest value of labor and other production facilities, and disregard decent standards, to accumulate bigger profit.

Download EILER’s briefer “Mega-FTAs and its implications on Asian Workers” written by Rochel Porras and Otto de Vries to read more on the potential impacts of RCEP and other mega-FTAs on the region’s labor sector. Get a copy here.

Groups warn intensified landgrabs, unemployment as China fastracks RCEP talks

JAKARTA—Civil society groups and social movements from Indonesia and across Asia Pacific warned of intensified land grabs and unemployment as the 16th round of negotiations for the China-led Regional Comprehensive Economic Partnership (RCEP) begins in Indonesia from Dec 7-9, 2016.

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Protesters from AGRA (Aliansi Geraka Reforma Agraria) marched towards Indonesia Covention Exhibit (ICE) in Tangerang – the venue of the RCEP round of negotiations in Indonesia.

“We expect no less than escalating cases of land grabbing and militarization of our communities, a sharp increase in unemployment, and the continued worsening of poverty in Indonesia once RCEP becomes enforced,” said Rahmat Ajiguna from Aliansi Geraka Reforma Agraria (AGRA).

‘People at the losing end’

The 16-member RCEP trade negotiations officially began in 2011 and recently gained steam after the US-led Trans-Pacific Partnership Agreement (TPPA) met its untimely demise following Donald Trump’s victory in the US elections.

“Much like the TPP, the RCEP contains provisions that go beyond traditional trade concerns bringing to fore a torrent of devastating impacts on people’s rights while further empowering corporations,” said Lei Covero of IBON International.

“Despite their differences however, it must be made clear that both agreements pose major threats and equally devastating impacts on people’s rights and sovereignty across the region. Despite the seemingly competing interests between two trade pacts – must be made clear that both RCEP and TPP serve as extensions of the WTO,” said People Over Profit Network coordinator and APRN Program Officer, Mark Pascual.

“Whether it’s TPP or RCEP, the people will find no refuge in these FTAs because as long as they are designed to concentrate wealth at the hands of powerful countries, people will always be at the losing end,” said Joan Salvador of GABRIELA – Filipino Women’s Alliance.

‘We shall not let RCEP pass’

“We shall not let RCEP pass. As attacks against our rights become ever more acute, so shall our collective resistance,” said Asian Peasant Coalition Chairperson Chennaiah Poguri.

FPR together with POP and APC staged a protest rally in front of the Indonesia Convention Exhibition (ICE) – the venue of the 16th round of RCEP negotiations to highlight the people’s rejection of RCEP and other FTAs.

“We shall fight RCEP the same way we fought and brought down other Free Trade and Investment Agreements (FTAs) – through the power of mass actions that proved decisive in the fallout of TTIP, TPPA and other FTAs,” added Rudi HB Daman of Front Perjuangan Rakyat (FPR). ###

With the lackluster performance of the WTO negotiations in the past years, monopoly capital has renewed its focus on bilateral and regional free trade agreements (FTAs). This reorientation aims to push contentious issues that would otherwise not be possible to advance within the context of a multilateral trade regime such as the WTO. This strategy is increasingly being felt across Asia Pacific with the recently concluded Trans-Pacific Partnership (TPP), and now the Regional Comprehensive Economic Partnership (RCEP) which is recently gaining steam. Both agreements if passed and ratified will threaten the basic rights and freedoms of peoples in the region. These two trade agreements also represent the heightening rivalry between the US-led TPP and the Beijing-led RCEP over who sets the standards of trade in the region. However, it must be made clear that in this tug of war, the real concern for the people is not about which side should win. Neither the TPP nor the RCEP, neither the US nor China and their corporations will ever address the long-standing people’s aspiration for an international trading system that responds to their needs.

The recent conclusion of the TPP deal mounted enormous pressure on RCEP negotiators to speed up talks and reach an agreement by the end of 2016[1]. While recent delays in the conclusion of the negotiations indicate that the 2016 deadline would most likely be missed[2], the urgency to resist this trade deal and its potential threat on people’s rights nevertheless remains.

RCEP coverDOWNLOAD THE BRIEFER HERE: RCEP BRIEFER 

The Regional Comprehensive Economic Partnership (RCEP) is a mega-regional trade deal that covers half of the world’s population, 38% of the world economy and nearly 30% of the world’s trade volume. The 16-nation RCEP negotiations formally began in 2013 comprised of the 10 ASEAN Member states at its core along with 6 of its major trading partners (China, Japan, Australia, New Zealand, South Korea, India).With the rapid growth of China, India and Indonesia’s economies however, the combined GDP of RCEP member countries can potentially amount to double the size of TPP economies by 2050.

Often referred to as a “trade” pact, the RCEP deals with more than just trade – a large portion of the agreement will give rich countries and their corporations power to delve into non-trade issues that have far-reaching implications across sectors and communities. Covering half of the world’s population and containing provisions that are even worse than the TPP and the WTO, the impact of this mammoth trade deal on the environment, labor, agriculture, investment, intellectual property, etc. will be nothing like we’ve ever seen before.

APRN_RCEP Infographic