China continues to cast its web over many parts of the globe. The Chinese government added a couple more members to its Belt and Road Initiative (BRI), a global infrastructure development project that extends from East Asia to Latin America and Europe. As part of efforts to expand trade and increase its influence in dozens of foreign markets, Beijing continues to recruit new countries and make them beholden to the power of the yuan. The latest to join the fray are Argentina and Syria.
Drinking China’s Baijiu
Last month, China increased its presence in the Middle East by nudging Syria to enroll in the BRI effort. Damascus and Beijing noted that this move would help revitalize the dreadful Syrian economy and accomplish the broader objective of international cooperation. Syria has struggled to grow its economy and improve social development as it has been slapped with crippling sanctions in recent years.
China has been expanding its footprint in the Middle East since the aftermath of the first wave of the COVID pandemic. In 2021, investment in Arab and Middle East states advanced by approximately 360%, while construction endeavors have surged 116%.
Argentina, the cash-strapped and debt-ridden South American nation, has joined the BRI, with Buenos Aires showcasing support for enhancing the $23 billion bilateral cooperation. Presidents Alberto Fernandez and Xi Jinping met during the 2022 Olympic Winter Games, prompting the leaders to issue a joint statement about the comprehensive strategic partnership. Xi emphasized the importance of constructing better highways and implementing hydropower plants.
Even before capturing Argentina, China was already South America’s top trading partner. Chinese businesses have invested close to $13 billion in the region over the last 12 months, up 16.5% from 2018.
But China wining and dining countries with Baijiu did not stop with these two. A recent study by the Green Finance & Development Center at Shanghai’s Fudan University discovered that Beijing showered Iraq with $10.5 billion in financing for economic and infrastructure projects, including a vast crude oil power planet.
Experts do not think China will slow down these efforts in 2022. On the contrary, it is believed that the Chinese Communist Party (CCP) will find new markets or enhance current relationships, with a heavy concentration on green energy projects. Overall, as part of China’s five-year plan for the 2021-2025 cycle, the world’s second-largest economy is predicted to invest $550 billion in both BRI and non-BRI nations.
Gaining Influence on the World Stage
Since 2013, China has been boosting its trade links with the rest of the world, spending hundreds of billions of dollars on infrastructure development abroad. The primary goal is to ship Chinese goods across the globe, sustain its juggernaut status, increase the yuan’s prevalence, and diversify its relationships. But this scheme has not been without controversy.
Last summer, Liberty Nation reported on how the Taliban rolled out the red carpet to China’s BRI, desperate for a cash injection. Military Affairs Correspondent Dave Patterson noted at the time that this was a two-fold opportunity: manage militaristic threats and exploit the country’s vast mineral reserves.
Critics have also suggested that the financing extended to many impoverished countries makes them more dependent on China because of the enormous debt levels. Beijing has been more open and transparent in altering the loans and their conditions in the aftermath of the coronavirus pandemic. Still, opponents purport that these changes do not go far enough.
And, of course, there is the elephant in the room: the United States.
By having more than 100 nations beholden to China, more countries will need to heed the edicts and warnings from Beijing than those of the U.S. and other western powers. Liberty Nation wrote in May 2020: “This money has improved infrastructure, enhanced commerce, and cemented an incredible Chinese influence in the region. It has ignited fears of debt-trap diplomacy through its neo-colonial endeavors, which have also been seen in South America.” At the same time, the U.S. has an international reserve currency and military support to offer. What side would Argentina take in any dispute?
No Yuan Saw It Coming?
China is facing a myriad of economic challenges, ranging from massive debt accumulation to a stagnating economy. By entering into these arrangements with other countries in various regions of the globe, Beijing could tap into these desperate nations’ resources, be it energy or minerals, and maintain its powerhouse moniker. The BRI is a lofty and expensive endeavor, funded by money created out of thin air. Many states are paralyzed in a pit of despair, especially in the fallout of the public health crisis. Beijing is extending an olive branch to these indebted and inflationary markets. When you are drowning in the water, and somebody comes to save you with a knife, you will reach out for this lifesaver, no matter how much it will cut your hand. Afghanistan, Argentina, and Syria – they need the dollars. Or, in this case, the yuan.
~ Read more from Andrew Moran.
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