I have recently been interviewed for the CFA Institute’s Enterprising Investor blog on the geopolitical trends for the coming years. I mentioned that the rise of China is one of three major geopolitical trends that will have a significant influence. No surprise there but I also said that most investors aren’t aware how influential China already is and how much the country works behind the scenes and under the surface to further its interests. Not even 24 hours after I finished the interview, a
Oh yes. This is a big deal. I do not have it handy right now but around Dec 2019, I was looking at a map of samples of infrastructure deals that China has in place e.g. ports, oil rigs, transportation, etc. If this is a chess game, they have developed their pieces well already and have board control (just not too obvious yet). President Biden did basically sound the warning in his speech last night to Congress that America, especially the government gets its act together. The polite phrase I heard was "China is very earnest". Biden noted as well the enhancement of US Naval presence in Indochina/Southeast Asian waters. Under the shadow of the pandemic, the Chinese have been using its coast guard and para-military "merchant" ships to "test the waters" and slowly intrude into EEZ (Exclusive Economic Zones) of surrounding nations like Vietnam, Philippines, Malaysia & Indonesia (let us set aside HK and Taiwan). Many of these countries steadfastly defend their rights and tell the intruders to go back home...but some appear "inutile". So I posit that aside from key infrastructure loan agreements, there are "personal loans or favors" of key people in developing countries too. Government leaders who are indebted deep are the real catalysts of what you pointed out.
Chinese are the first people to renege and cheat on contracts barely before the ink is dry. True at personal and professional levels.
Why don't the other parties apply to the Chinese the Chinese method.
Short of China invading the defaulting parties, I don't see how they can really enforce the contracts. And I don't think China will want to go to war to enforce contracts that are blatantly rigged. In France it is called a " Contrat Léonin" i.e favoring too much a party to the contract https://fr.wikipedia.org/wiki/Clause_l%C3%A9onine
Oh yes. This is a big deal. I do not have it handy right now but around Dec 2019, I was looking at a map of samples of infrastructure deals that China has in place e.g. ports, oil rigs, transportation, etc. If this is a chess game, they have developed their pieces well already and have board control (just not too obvious yet). President Biden did basically sound the warning in his speech last night to Congress that America, especially the government gets its act together. The polite phrase I heard was "China is very earnest". Biden noted as well the enhancement of US Naval presence in Indochina/Southeast Asian waters. Under the shadow of the pandemic, the Chinese have been using its coast guard and para-military "merchant" ships to "test the waters" and slowly intrude into EEZ (Exclusive Economic Zones) of surrounding nations like Vietnam, Philippines, Malaysia & Indonesia (let us set aside HK and Taiwan). Many of these countries steadfastly defend their rights and tell the intruders to go back home...but some appear "inutile". So I posit that aside from key infrastructure loan agreements, there are "personal loans or favors" of key people in developing countries too. Government leaders who are indebted deep are the real catalysts of what you pointed out.
Chinese are the first people to renege and cheat on contracts barely before the ink is dry. True at personal and professional levels.
Why don't the other parties apply to the Chinese the Chinese method.
Short of China invading the defaulting parties, I don't see how they can really enforce the contracts. And I don't think China will want to go to war to enforce contracts that are blatantly rigged. In France it is called a " Contrat Léonin" i.e favoring too much a party to the contract https://fr.wikipedia.org/wiki/Clause_l%C3%A9onine
I remember reading this book that tells you all you need to know about doing business in China or with Chinese :
Mr China by Tom Clissold ( https://tinyurl.com/4vbmw48b).
Dear Klement ,
You should recommend it to all your clients/subscribers.
And the more I think of it since this morning, the more I believe that the best way to deal with them, is to apply their own methods. Very simple
i.e What is a contract.
Just a piece of paper which has no value whatsoever