I read this Bloomberg report in the ST titled ‘China’s investments changing its neighbours’ on 8 Dec. The main part of the article described the big investments China put into Cambodia, Laos and Myanmar and how the Chinese investments have boosted their growth rates to 7 or 7.5% that many countries would be salivating. China is investing in everything in these countries, from railroad to real estates and also shifting its low value factories into these countries. And Chinese imports from these countries more than double in the last five years. Should not these developments be good?
Here comes the punch line. All these are bad. Why, too much dependency on China and also the factories are at the bottom end of the value chain. Ok, ok, fair enough, putting all the eggs in one basket is bad. These countries must diversify, to trade with the rest of the world, to trade with Europe and America. Wait, wait, can these countries afford to purchase the over expensive products of the West? Or would the West want to trade with these countries and buy their agricultural products and raw materials? If no, then how, don’t trade with China and wait for the West to come calling? What about the 7% economic growth, 3% happy or not, good or not, if don’t trade with China?
And those low end production, why, tell China they don’t need them. Ask China or the West to transfer their high value production to these countries? Oh, sorry, Trump wants his factories back. And Europe will not be bothered to send their high value add factories to these developing countries. By the way, that was how China started, how Singapore started, with low value manufacturing, gained the skills and expertise and move on. Should these countries do away with low value manufacturing and leapfrogged China into high value add manufacturing? Do they have the skills, the technical people to be in the next level of manufacturing?
Why am I asking embarrassing questions? The western experts and bananas that think like the West are denouncing Chinese investments in these countries and transferring their low value add factories to them as bad. Should advise the govts of these countries not to trade with China?
Is that the solution? What is the alternative?
‘The biggest risk for frontier Asean economies is that Chinese inflows create “extractive” elites who entrench themselves in power,’ said Mr Song Seng Wun…’ May I add my piece of advice, stop all investments from China, and wait under the coconut trees for the coconuts to drop. Never mind if ‘These countries are getting a lot of money and opportunity from China…’ True, stop all investments from China, don’t trade with China. Go and trade with the West, the benefactors of these ever developing countries since the days of colonialism.
These kind of silly stories originating from the West have nothing good to say about receiving investments and trades with China. They would rather these countries remained under developed or not developing than to grow at 7% and getting a lot of money from China to raise the livelihood of their people. The solution is to remain poor and not be solely dependent on China. Just wait for the West, their former colonial masters to return to help them to extract all their natural wealth while keeping them poor as colonies.