Chinese Neo Colonialism

New Age Imperialism or Neo Colonialism is all about controlling Finance and Trades.. It is vastly different from the earlier variety of slavery down right looting, but this is about creating a sense of freedom while there is someone always controlling the strings..

During the cold war times, both US & Soviet followed a policy of divide and rule where all nations had to take a stand on which side lies their loyalties. But post the fall of Soviet Union, its the era of embargoes and aids till about the last recession. While US is going through the throes of the recession and fiscal deficit, China has been silently and strategically positoning its spread across the world.

A good chunk of the US fiscal deficit is financed by China. This could work as double whammy considering the exchange ratio's, the large imports of chinnese manufactured goods into US and ofcourse job creation in US on account of manufacturing.

Commonly known is the Chinese support given to most African nations where there are bilateral ties between the government for supporting developement and prosperity in the dark contienent. In many ways this is like a business deal on " Customer Relation Management".  It is a back door entry for building a very stable trade position in the future with access to natural resources. In the earlier years US had adopted a " Big Brother " attitude whereas the Chinese approach would be more welcome to the country.

The best part of the Chinese approach is that it caters to countries in distress which has a long term potential for either growth or is strategically positioned. I was recently reading an article about China building a port in the southern tip of Srilanka at the cost of $1.5 Billion. This is part  of the support extended to the Srilankan government during the LTTE war.The total Chinese investment planned here is to the tune of $6Billion. Srilanka is an optimum location for strategic interest considering its location at the southern tip of India. Many security analysts fear that this is another step for Beijing " String of Pearls Strategy" for setting up many ports in the Indian ocean.

Next is the recent example of the Greek fiasco and the assistance provided by the Chinese to the bolster confidence through bilateral ties. In the short period there were two visits planned by the Chinese Premier and about 14 deals are reporterdly signed which totals to the largest investment in Europe by China.

Another example is Africa. There has been an increase in Chinese settlement in various countries is this continent. The beauty of the Chinese offer is that it is unconditional, there is no pre condition on economic performance, and they do not interfere with the type of governance in the state, be it a democracy or a Pariah state. China is incidently the largest energy player in Sudan and has build considerable construction expertise in most of the other countries.These investment do not neccesarily bring in more african jobs becuase most of the contractors bring in laborers from their home.

China is also active in the other countries including Nigeria and Angola the continent's largest oil producers as well as countries like Equatorial Guinea and the republic of Congo.Also there are many countries to which Chinese military and financial support is exteneded as in Sudan, Zimbabwe, Zambia & Uzbekistan. Africa's 5.7% GDP growth last year is also largely credited to China. I remember reading some news articles stating  - Can one country build a continent ?  The article stated that there are about 800 Chinese companies in Africa.

These are definetly not examples of Chinese philanthrophy but a strategic plan for increasing its footprint. This is quite an amazing example of Neo colonialism where most super powers will suddenly be stuck with the realization that for the smallest of decisions in their country there will suddenly be a Chinese twist.

Where does all the money come from ? Well China has stated its deficit as 20% of the GDP, but like most other government statistics , this looks highly impoverished. Some estimates state it as over 40% of the GDP. Hence the money is largely funded by the government banks rich with the savings of the hardworking 1.6 Billion population. At any time if there is a huge run, then it will cause another world recession and disorder. But as of now there is no reason to predict such an exodus considering that China is one of the few economicly stable countries.