Crumbling Chinese fortune (cookies)

Hello, good morning and welcome to President Xi Jinping, head of the world’s largest single-party state and non-acknowledged head of Chinese industry, banking and espionage.

Depending on who you believe, Xi has either come to conduct business at the highest level in the UK, or he has come to visit China’s latest client state. Dave (Cameron, UK prime Minister)–or rather his associate–Foreign Secretary Phil Hammond–insisted on the BBC Radio Four ‘Today’ Programme that the UK was approaching China with ‘eyes wide open’. A comforting thought, always provided that it’s actually true. Personally, I’m not so sure. Dave has in the recent past stated that we are interested in Chinese money and Chinese technology, and not in having Chinese industrial concerns–mainly State owned–actually coming over here and building new railways and nuclear power stations, using Chinese labour and conforming to Chinese building standards. All fine and dandy, but let’s be honest here, most of Chinese technology has either been filched from America or developed by Israeli hi-tech companies and sold to China. Why go through a middle-man, why not get the new technology from source? I suppose the answer is that we’d have to pay for it, and this seems a cunning way of getting something for nothing, but as we all know, there is no such thing as a free lunch. It must be said that there are those who think there is, and they point to the hordes of immigrants pouring into the UK and claiming benefits. The short answer to that is most of the recent wave of immigrants coming to the EU seem to want to go to Germany, which actually needs them as they have an ageing population and a negative birth rate. Of those who do come to the UK, most either wind up working for the NHS or in coffee shops. And  good thing, too. Without non-EU migration, the NHS would have collapsed years ago and at least half the coffee shops would go out of business due to staff shortages.

Phil Hammond made the point this morning that the projected nuclear power station was French designed and met all current EU safety legislation. Great–we do need new power stations, although perhaps we could take a leaf out of Orkney’s book (Orkney being a collection of small islands to the North of Scotland) and go for renewable power sources. Orkney currently produces 104% of their power requirements from renewables–yes, you did read that correctly–and exports the surplus to Scotland. They are currently experimenting with battery storage of surplus power and in an interview with Robert Llewellyn of The Fully Charged Show on YouTube, a spokesman for the local power industry said he could see no reason why the Orkney experience could not be scaled up and applied to the rest of the UK–yes, despite the SNP’s best efforts, Orkney (and Scotland) are still a part of the UK. Now, granted The Orkney Isles are a particularly windy part of the UK, but if renewable energy is working so well up there–to the point that many have apparently converted their houses to be all-electric because it is so much cheaper–why are we messing around with a power source whose by-product has a lethal  half-life of about ten thousand years? I digress, we were talking about the Chinese Government building a new nuclear power station for us–well, I was, Dave would put it another way, but I have a sneaking suspicion that it amounts to the same thing, and it falls under the category of wishful thinking rather than eyes wide open. It is possible that the Chinese, having failed to pinch the French designs, reckon that the next best way of getting hold of them is to build the power station, which obviously necessitates them seeing the plans of what they are building. The real problem, however, is this. In my various travels around the world, I have seen examples of apparent Chinese  largesse. It normally starts like this; ‘we’d like to come and build you a new road/railway/port etc etc.’ What then happens is the unsuspecting, soon-to-be-duped Government of the new client state agrees, and before they know it, the Chinese have brought in their own labour force, used their own building materials, imported their own food for the labour force and the locals are left watching the proceedings, and getting the occasional handout. I don’t blame the Chinese for this, if they can get away with it then bloody good luck to them, and let’s be honest, we–when we were an empire, don’t you know–got away with it for about three hundred years. The Americans are still getting away with it, so why not the Chinese? The point is, the new road/railway/airport normally connect the source of something that China needs to a port that can export the something to China. In many cases, all the necessary infrastructure has been built by China, and funded by soft–soft until after the client state has signed the loan agreement–loans. In many cases, the loan is backed by the thing that China actually wanted in the first place, a bit like loaning somebody the money to make a cake, and then you eating it, whilst they, in the long-term, pay you for the privilege of you eating their cake.

The real flaw in Dave’s cunning plan, at least in the long-term, is that the Chinese economy is not in great shape, and most likely has further to fall. A guy called Gordon Chang wrote a book about it in 2010. Then what he wrote seemed a bit far-fetched, now it seems more prophetic than far-fetched. Robert Peston of the BBC also made a documentary in which he pointed out that the expansion in the Chinese economy had been fuelled by uncontrolled credit. There are a few chickens coming home to roost, which might mean that it is unwise to cosy-up to China in the hope of them investing/improving our infrastructure.

On the other hand, perhaps Dave is intent on separating them from their money, before they realise that they don’t actually have any. I suppose if push came to shove, and they had built a new power station and a high-speed rail system, and they were going bust and  wanted to get their money out, we could always nationalise whatever they had built and tell them to get on their bikes. Comrade Corbin would be impressed.

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