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Comment by typpo | Hacker News Reader

I spend a lot of time in Ethiopia for my company. In many parts of Addis Ababa, the entire skyline is under construction - you can't look up anywhere without seeing a new building in progress. The sound of hammers is ubiquitous. You can tell the place is booming.

Most of the large construction projects are run by Chinese companies, especially the Chinese State Construction Corp. New airport terminal, ministries, hotels, convention center, light rail, and so on. This has caused some discussion around Chinese taking construction jobs etc. You'll see these state-funded Chinese construction projects in pretty much every African country.

Although Addis is booming, the population still primarily lives in the countryside, and their quality of life is a lot lower. It's misleading to look at average income across the entire population because the city's economy is so far ahead of the rest of the country. This has probably contributed to some of the unrest.

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This reminds me of the DW documentary I watched on their (Chinese) "aid" work in Africa. The Chinese gov lends money to they country and makes them use Chinese companies to do all the work and thus effectively brings much of the money back while dropping the legal obligation on the citizens of that nation.

Many Western aid projects are also thinly disguised subsidies for well-connected companies back home. The main difference with China is sheer scale and the fact that they tend to import their own labor as well.

There was an interesting article about other such deals with the Chinese. The Chinese would make a deal with an African nation and dump products on the market that they couldn't sell in nations who had an actual choice or quality standards that were enforced. The market would be flooded by cheap garbage tools, electronics, and etc. Quality products would disappear quickly as they were many times more expensive.... and then everyone realizes everything is garbage.

Interesting enough the construction sites contain none of these tools (the Chinese workers don't use them), and the locals now can't afford to bring them on a special order because they're either locked out of the market or many more times expensive than before due to the trade deal. Crappy state run industries just keep on trucking at the expense of the locals in Africa.

>The Chinese would make a deal with an African nation and dump products on the market that they couldn't sell in nations who had an actual choice or quality standards that were enforced. The market would be flooded by cheap garbage tools, electronics, and etc. Quality products would disappear quickly as they were many times more expensive.... and then everyone realizes everything is garbage.

You've described free trade in a nutshell. More industrialized nations love these kinds of trade policies.

You're being down-voted, but this is very similar to the US's policy on agricultural goods -- they provide "aid" (read: dump cheap staple goods like corn and wheat) into markets, which forces the domestic industries to grow produce that doesn't grow well in the US and export it at favorable rates.

These countries are then dependent upon the US for staple crops. And when international prices for staples rise relative to exports, then their citizens are the first in line to starve, as the aid is conveniently just enough to eliminate domestic industries but not enough to feed everyone. See: Mexican Tortilla Riots & Arab Spring.

I think you're attributing malice when maybe there is just inconsistent and/or competing policies written by multiple competing/overlapping bureaucracies. See this other [1] DW documentary I watched on EU ag. policies (which I'd bet are very similar to US). Jist of it is they are heavily subsidizing (with price floors) domestic (German) production while trying to spur production (with more subsidization) in the donee country that are unable to compete.

[1] https://www.youtube.com/watch?v=dv3hSNhRaNU

Your point doesn't diminish his statement though - This has been the de facto method of economoic imperialism for the past 3 decades or so, and all of a sudden it's a problem because China is doing so?

I don't care to get into a prolonged discussion of this as we are likely not gonna change each other's mind and I have to watch last night's episode of Westworld. Your use of "economic imperialism" has an inherently negative connotation which leads me to believe you also view these policies as inherently malice (i.e. nefarious intent). My point was that I believe the failings of our aid/development policies is more easily attributed to competing/overlapping bureaucracies than any pols malice intent. JFK establish USAID to help feed the hungry and it has a done a pretty good job (failings and all). I never stated that US policies weren't problematic but I'd put the values of our county over China's all day.

> I'd put the values of our county over China's all day

You say that as if your country's values are static. Any possible reading of history could not honestly conclude that. I'm not singling out your country by the way. But by way of a single example, look at your (and my) country's treatment of refugees and immigrants. No one is calling to "bring me your huddled masses". My country's (Australia) refugee policy definitely has an explicitly malicious intent - the use of indefinite detention against non-criminals in order to deter others.

Values change. Also, values are not a monolith. They are a spectrum. In some areas, the value gaps are definitely closing.

History ain't done yet.

> You've described free trade in a nutshell.

Canada and the US have very healthy activity in cross border free trade, but I'm unable to tell which of those two countries is the aggressor and which the victim.

And yet, Canada had to legislate a domestic automobile industry into existence (By forcing US auto manufacturers to open plants in Canada if they wanted to sell there), instead of just letting the big three import their cars. Without it, eastern Canada would lose tens of thousands of well-paid jobs.

Oh, and as soon as Canada had a competitive product in the aerospace industry (from Bombardier), the United States government slapped the company with a 200% import tariff. And here I thought that free trade benefits all parties...

If Ethopia by some miracle became a leading auto manufacturer, I assure you, the free trade rhetoric would find some way to protect GM, Chrystler-Fiat, and Ford from it. The United States is not interested in being a resource economy, with value-added industry happening somewhere else.

There's an $800 billion trade deficit with Canada since 2000. They typically import about $250b-$280b per year in US goods.

If Canada is the victim, then woe is poor China and Germany. Must suck to have the world's largest economy devouring your exports.

What’s the source of these numbers?

While I'm sympathetic generally I'm not a big fan of classifying all such trade as the same. There are deals that are clearly better than others, and some that are far far worse.

Which is why anti-trust laws exist, and why 'dumping' is an activity that is usually prohibited.

Which is why (i) it's not "free trade" then and (ii) multinationals love places where these restrictions don't apply.

Which reminds me of the book "Confessions of an Economic Hit Man." Sounds like he hit it on the nose.

What did you expect? Borrowing a foreign currency means you can only use it to buy foreign products from a macroscopic perspective. Exchanging currency just moves it around because someone else still has the chinese currency and will use it to buy chinese products.

The bigger question is if they will have an export surplus to china which is neccessary to repay the loans. This is how china paid back it's loans.

This makes me think of the stories from a few years ago, about how Ethiopia was engaging in extensive telecommunications surveillance and control.

It makes me wonder about corresponding relationships between the parent's description and this, if any. (Not that I haven't already been wondering; it reminds me of this.)

Seems like a printed-money-fueled bubble to me.

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