Italy Joins China's New Silk Road Project
bbc.com
bbc.com
[0] https://www.corriere.it/economia/lavoro/19_marzo_23/tutti-ac... (Italian)
[1] https://www.amazon.com/Silk-Roads-New-History-World/dp/11019...
Forgive my ignorance, but aren't many EU decisions required to be unanimous? So if China has close ties to Italy, could it use it's influence to convince Italy to "veto" hypothetical EU sanctions against Chinese human rights violations or other actions that are good for the EU but against Chinese domestic and foreign policy?
https://www.reuters.com/article/us-eu-un-rights/greece-block...
In the West what we need is to restructure our facilities such that if you participate you will prosper. We need for everyone to prosper. Not necessarily equally, but what happened to Greece went beyond simply not prospering as much as other nations. It was legitimately negatively impacted. (A lot self inflicted, but a lot inflicted by the structure of Western trade facilities as well.)
Having mentioned all that, I grant you, having all parties prosper at EU scale is a little difficult to pull off.
https://en.wikipedia.org/wiki/Corruption_in_Greece#Lagarde_l...
Germany (and France) also knowingly gave Greece lots of loans, when it was obvious to everyone that Greece will never be able to pay them all back.
From the perspective of the average Greek citizen, the Greece thing hasn't worked out terribly well either.
> what we need is to restructure our facilities such that if you participate you will prosper
EU doesn't, yet at least, have enough power to take over whole countries then the country's government is shortsighted and is running their own country into a long term ruin for some short term temporary wins.
What didn't work out for Greeks was their corrupt politicians/elites and lack of sufficient oversight, including by EU institutions. All sorts of requirements that all EU members have to meet were never enforced for Greece.
From the time Greece joined the Euro (by cheating) to the start of the financial crisis, Greek GDP skyrocketed 2.3x. That's astounding, and pretty much unheard of. Of course it wasn't real, because there were no corresponding improvements in Greek economic efficiency or productivity.
I wrote about this at the time: https://blog.metaobject.com/2015/07/greek-choices-german-per...
https://www.unian.info/politics/10270653-hungarian-top-diplo...
https://www.reuters.com/article/us-russia-hungary-putin-orba...
Yes, just like Germany does with its EU satellite states, and the US has done in Europe since WWII.
I do NOT advocate the US getting into this game tit/tat through manipulating/commenting on US based media but I wonder what other technical solutions there are to counter what feels like a massive communications operation to shift all digital discussions concerning China; without throwing the baby out with the bathwater
This thread - like every other which involves China - is rife with straw man arguments and a lot of 'so what' false equivalencies.
The other kind of comment that predictably appears in threads about China are suspicions that astroturfing is going on. When dang bothers to respond asking for proof, it usually later turns out that the comments in question were made by completely ordinary members of the community who happened to voice a dissenting opinion. (Those kinds of accusations are against the guidelines, by the way.)
There is also not just one group making such comments, but at least two different ones:
The first are all about whataboutism. Whenever the topic is the Chinese government doing evil thing X, they start talking about the US government doing something similar to X. Those people are highly likely to be US citizens (their obsession with US politics is a strong hint) and they only use China to segue into the topic they're actually interested in discussing.
The second are Chinese cheerleaders. They think that China is overall on the right track and point to rapid economic growth as proof. You don't usually see them in threads about Chinese human rights abuses (because even they agree that those are evil), but in other cases, like here at the bottom, they make an appearance. There's no need for the government to pay those supporters, because the natural supply of nationalist types is large enough.
There is a third kind that's easily confused with the second. Some people will agree with specific developments because they feel that the previous situation was even worse. For most people, Google censoring search results would be a bad thing, because for them the change is (uncensored Google -> censored Google). But for Chinese people who see the change in terms of (censored Baidu/Bing -> censored Google) it's still an improvement.
Then there's a fourth kind on the opposite side, for whom everything about China is connected to everything else. They're somewhat of a mirror image of the first group; instead of using China doing X as a prompt to talk about the US doing X, they'll talk about China also doing Y and Z instead.
I think none of those trends are much to worry about, though. Although HN voting on political topics tends to be quite a bit noisier, well thought-out responses are still more likely to end up closer to the top than to the bottom.
Also, this deal is an entry in the EU which I really dislike. I hope the EU will step up it's game against china, too bad that our normal partner currently has an unstable leader. While XI is without a doubt a hard-working leader. Unfortunate, I do not approve their world vision, at all.
He has some points ( eg. Military spending fot countries of the EU), but he's clearly unstable as a leader. I even think that the wall would just mean, a lot of money coming his way, as a real estate developer.
Would you be OK with a collective foreign effort to politically reform? Perhaps change the constitution or something based on what some foreigners insist to be there?
Especially if all cases of such "valiant" efforts on your end in the last 20 years have made things worse, turning stable regimes (Iraq, Libya, Syria) to hell-holes of loss, civil war, fanatical muslim rule, and turf wars?
Because now I think about it, the world bank and other western trade facilities are also, at heart, simply "debt trap diplomacy" as well.
We need to come up with something new.
To be clear, I'm not saying that the Chinese money doesn't come with baggage. However I think it's ridiculous to believe that the US is on some altruistic lookout for others here, as opposed to just being interested in maximising US benefits.
An ailing economy that has high youth unemployment rate and anemic growth and cannot control its monetary policy is willing to take money from who ever is willing to give. Big Deal! When Italian Navy is doing war games with China.. call me.
This is a whole lot of symbolism and a costly one for those putting money. Its not Americans who do not want this dog and pony show, its the Germans.
Russians and Chinese are playing the same game, with different tactics and some elements of western media are eating it. They are weak internally and use these external symbolism as a "proof of strength" back home.
One of the centrepieces of Obama's foreign policy was a comprehensive 'pivot to Asia', and the trans-pacific partnership free trade agreement. In fact, many argue that the Belt and Road Initiative is a response to the efforts of the US to contain China.
More recently, the Trump administration has assigned $60bn to the 'Overseas Private Investment Corporation', a US government agency that will use to the funds to underwrite far larger sums of private capital, and invest it around the world.
It is a long-standing part of US grand strategy to use India to balance against China, which lines up with the fact that the biggest investments of the new Silk Road have been to Pakistan.
India, Japan and various African countries set up the 'Asia-Africa Growth Corridor' a couple of years ago, a direct rival to the Belt and Road Initiative.
Up until now the US, economically, has mostly functioned as a consumer of European and Asian goods, so it is hard to imagine how they could offer an alternative to OBOR. For China it's a way to offload their export driven surplus and creating new markets, which is something that the US isn't really positioned to do.
Of the 10 of the World's most valuable companies, 8 are American. Apple, Google, Microsoft, Amazon and Facebook didn't get there by concentrating only to American markets.
And most importantly, even those global companies constitute only a fraction of the entire US economy. Most of the US economy is not organised in publicly traded, globalized, businesses.
The bottom line is, as can be seen in the American export and import balance, a strong tendency to consume global goods rather than sell them. The reverse is true for China. That's why China pursues an expansionist economic foreign policy, whereas American economic policy is largely divorced from its foreign politics.
The major takeaway from the 'Princes of Yen' by Richard Werner is about how Japan soared from a destroyed country to an economic powerhouse, before being brought down by the bankers at the BOJ, ostensibly to change the system from a 'state backed economy' to a US-styled one. Ditto with the Asian tigers in Thailand, S Korea etc.
Such managed-economies have failed miserably in many other places - notably in India. China seems to be following the path of its neighbors, however.
On a meta-level, I don't see what the big deal is TBH - whatever floats ones boat eh ? The argument about 'unfairness' is a bit of a joke, since it is well known that there are very deep (albeit hidden) connections/interests b/w state and corporations in Western nations.
You need an enlightened leader for this to work.
The main issue is that Italy is part of the EU, and also one of its major economies. The argument about unfairness is absolutely not a joke. In fact, it’s the main point. Doing business in China as a foreign-owned company in many sectors of the economy is, simply put, a huge challenge, when not outright impossible. This is mainly due to opaque or protectionist regulations. State-backed competitors also make the market harder to penetrate since they will always win price wars. Then add lack of concern for intellectual property.
Chinese companies don’t have these problems in Europe. Not even close. They enjoy all the advantages of a (basically) free market, whereas the opposite is not true. This is where the “unfairness” is.
The EU has been trying to find some leverage against China to balance the scale for some time now, albeit our efforts have been mild. That’s because the EU doesn’t have a common foreign affairs strategy and individual member states are always more concerned with their internal politics to actually go figure out one.
So China can just come here, pick a country that can be easily enticed by the promise of bilateral cooperation and handsome investments, and all of a sudden the EU now has a member who will start voting against anti-China policies.
Without a unified will, the EU member countries don’t have the contractual power to demand and obtain anything from China. We will be an easy game for them.
I understand this may not apply to EU nations to the same extent, but then there are all sorts of historical inequities in their favor (esp. Britain) that one wonders if this new found "righteousness" is a bit ahistorical.
Consider India - it's basically run by erstwhile cronies of the British empire, who basically transferred all of its generational wealth to the city in little under 200 years. This while it was made into a cocaine tanker to destroy China. It was made to fight European wars, while being footed with the bill, and now the British groan about the pittance they pay India in foreign aid. Never mind that this aid, is mostly geared towards the Anglo-Saxon eugenics schemes of all sorts.
India currently owes about half a trillion to the IMF, after being run by a IMF crony, and his Italian mistress for 10 years. It's easy to guess what the IMF will ask for (far more loudly) when it inevitably goes belly up.
You're talking about some of the most successful economies in the world, vs a China that grew a lot in a short time and now faces real problems (debt, slowdown, political crackdowns, etc.)
I'd still rather be a citizen of SK or Japan than China.
The problem is that as you get richer and move up the value chain, you start requiring industry that is more creative, or entirely new creative industries. When creativity is required state backing is horrible at picking winners. And then those industrial champions are now sucking up a lot of the capital within a country.
Eventually the champions become slow and sluggish. But they’re too big to fail; as an extreme example, Samsung’s revenues are 17% of South Korean GDP, to say nothing of their suppliers.
Most of the Western articles I've read express concern over Italy's involvement in the BRI. However, I am cautiously optimistic: maybe having one of the G7 countries participate in the BRI is a good way to cooperate with China and bring a more inclusive and globalistic approach to working with China? I think it's too early to tell how this will end, but I'm less pessimistic than most.
Montenegro has a bridge to nowhere built by Chinese workers instead of locals. Billions owed to China for a useless bridge. https://www.reuters.com/article/us-china-silkroad-europe-mon...
It seems to be China "invading" countries to gain territory only in a roundabout way. Like the Godfather China made an offer that couldn't be refused.
"Under the terms of the contract, an arbitration court in China would have jurisdiction in the event of any legal dispute. CRBC won commitments that all imported construction materials, equipment and other goods be exempt from customs and value-added tax. Chinese workers were given 70 percent of the work."
Thr Chinese government issues a loan then disputes are handled by a body whose independence is highly questionable.
the analogy seems useful:
* China has the more united and disciplined central government, while the US had a more federalized, decentralized government, approximately like the EU.
* China has based its economic growth on exports, which is far less true of the US (and EU excluding Germany)
* China does not guarantee many (or any) economic rights to outsiders within its boundaries, whereas the US does. similarly the EU grants relatively strong rights, including government financial assistance and medical care, to outsiders within its boundaries
the simplest prediction is that it will turn out roughly the same way as it has for the US, and Germany, the EU zone's current main exporter, has the most to lose.
https://en.m.wikipedia.org/wiki/List_of_countries_by_exports
Much of China’s remarkable growth between 1978 and 2000 can be explained by the reform. But the more recent and faster growth in the last decade has been mainly driven by exports.
https://www.eastasiaforum.org/2011/02/27/chinas-export-led-g...
China for certain, knows that the optimistic promise of the BRI initiative will be met, and that they are trading long term debt with strong political influence.
What happened in Srilanka should be a warning to any other country intending to enter BRI.
There is a reason these countries would never start these projects without outside support. It is because, within the framework that the country operates, such a project will objectively speaking, never be profitable.
Government at least is a more observable entity than oligarchy.
And let's not pretend uneducated citizens know any better to manage investment...
As great as it sounds on paper there are quite a few economists who are skeptical about the ROI from all of these investments.
But I do like how bold it is, which you rarely find in western countries (large scale infrastructure projects). They can barely build a stretch of road without it costing 10x the budget and getting caught up in years of political horse trading.
Yes but the BRI is not designed solely for economic gain, but to lay the basis of a new Sino-centric order.
The closest comparison is with the Marshall plan. The US spent huge sums to rebuild Western Europe, countries that by the 1970s began to undercut the US economy. But it was essential to the post-war US order, the defeat of Soviet Union, and other long-range strategic goals.
> Over the past five years, China’s trade in goods with countries along the Belt and Road has exceeded $5.5 trillion
Ships try to deliver cargo as deep in the country as possible. Then trucks take over ( Europe), because of different destinations.
You think they are joining the world trade order, I just see an expensive debt trap that won't even change 0,1% in a countries trade
It's that I call bullshit on the one road one belt.
That trains vs container ships is irrelevant. Trains lose big time
That's it's more a "build useless infrastructure that you otherwise can't afford and that Chinese will build with no locals" debt trap for countries to China.
2 weeks is also no replacement for ships, because of scale. It's something in the middle where there is no alternative.
It's also insignificant alternative in the scale against ships.
Especially given the CCP's documented history with bribing foreign leaders to agree to similar deals.
Some part of the cooperation is on development of Africa which probabley is part of China's current plan or even part of OBOR. We know that Italy is major victim of the wave of iligle immigrants accross the ocean. An inductrialized and stable Africa is also in the interest of Italy. That could explain why Italy is more interested in OBOR than other Eurapian countries.
Does that make sense?
But it's also easy to just keep walking to the country you want to be in since all the border controls are gone once you reach schengen area. Few easily avoidable exceptions. Further compounded by all these countries retaining their own asylum protocols, so even if a country is landlocked or access is limited by some other geographical feature, if you are able to show up then you are able to request asylum.
For one, borders are difficult for migrants to cross: trains and coaches near borders are often checked for migrants, some borders are under police surveillance (like between France/Italy), etc.
Second, Dublin agreements force migrants to apply for asylum in the first EU country that they give their fingerprints in (ie the one where they have their first encounter with police). Most migrants have fingerprints in Italy, Bulgaria, Hungary, Greece, Spain, ie the countries on the outskirts of Europe. So migrants can’t just walk to the country of their choice and claim asylum, as they will be “deported”, as a rule, to a country they explicitly don’t want to be in (Italy had high acceptance rates until recently but can offer no work, Hungary is known for extreme racism and violence against migrants, etc.)
Your (b) is on point though. Italy has been asking for a fairer distribution of migrants among the Member States for some time, but the most powerful Member States like their South/Eastern European moat a lot
It’s much more likely after decades of poor economic management and a weak economy, Italy is willing to sacrifice some principles/accept some risk in return for Chinese investment in ports and businesses. China has invested heavily in Greece as well for the same reasons.
Europe is now just doing the paradigm shift, urging its member states to act as a unified front against China. Something that Canada, Australia, Japan, Taiwan, India, New Zealand, and Vietnam has started to do
Britain, France, Germany, Poland, Canada, Australia, New Zealand, Japan, South Korea, Philippines, etc. Those are allies of the US. I don't think there's actually much confusion in the difference between a US ally relationship like Britain and the modern US relationship with China.
Yes, the difference being "when it suits the US it's OK, when it suits somebody else, it's bad".
Yeah, more proving my point.
https://www.bloomberg.com/opinion/articles/2013-02-01/piracy...
https://foreignpolicy.com/2012/12/06/we-were-pirates-too/
Not to mention that the same exact argument was once leveled at the "subpar" "copycat" "ripoffs" of Taiwan and Japan (regarding cars, electronics, etc) back in the 60s and 70s. Funny how that turned out...
Also, it looks like this account is using HN primarily for political and nationalistic battle. We ban accounts that do that, because it destroys the intellectual curiosity HN exists for. Would you mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the spirit of this site to heart? We'd be grateful.
We detached this subthread from https://news.ycombinator.com/item?id=19470535 and marked it off-topic.
So... like many European companies and even entire sectors?
Whether the states are authoritarian or not is irrelevant to me and to the question.
In this new world we may need to accept that our individualistic nature has become that very same weakness that dooms our way of life in the great game of life.
What is the its you are referring to when you say technology hampered its effectiveness.
Secondly, I don't believe it is widely accepted that our nature is individualistic. Individualism is a moral stance, political philosophy, ideology, social outlook.
However, in the age of instant global communications, it may be that effective central planning is "better," or at least possible.
And now, the individualistic model may not be compatible with the planet-scale adjustments we need to make to prevent catastrophic environmental change.
Also, I agree individualism is not necessarily humans' natural state. We probably self-organize into loosely affiliated extended family units in the absence of imposed hierarchy, but humans are nothing if not adaptable.
And I will add one more thing other than instant global communication. Big Data. You can now have Data Real Time and see the Trend and changes being plotted in real time as well.
I also don't know what is the difference between Central Planning and Keynesian.
However, centralized planning has one fatal evolutionary flaw -- any errors from the top are amplified. The biggest example of this was China closing its ports in the 1400s following imperial decree, which started China's long path to civilizational decline because it cut off trade and new ideas. (China's thinking was: we're big and diverse enough internally -- we don't need no one else. This kind of insularity always brings about downfall.)
In Europe, because there wasn't a single monolithic power but instead many independent jurisdictions, as a whole it was more robust to errors. When a certain nation-state was on the rise, another declined, but overall there was progress. There were many golden ages, e.g. Portuguese, Spanish, Dutch and English, and they each had their time in the sun. Europe as a whole progressed.
Centralized planning is always more efficient; but if the leaders get it wrong, errors can be catastrophic.
Decentralized/democratic systems are always less efficient; but are ultimately more robust to changing environments and errors in the system. They are self-correcting to some extent.
Many successful countries start out with centralized systems, and often transition to decentralized/democratic systems (often not without some upheaval). The United States (and a few other countries) are unique in the sense that they started with a democratic ideal, but as far as I can tell they are exceptions to the norm.
But such a thing would probably require forming a new society from scratch. As you mentioned, the USA was the "Great Experiment" that many old-world royalists scoffed at. Maybe the time will come for another?
Italy was something of model for alleged central planning efficiency in the last century. Now it's broke, taking money from the next credit-binging central planning state. It's credit, not proof of either side having superior economic policy.
The truth is that humans are social creatures that prefer the company and support of other humans. The way we spread around the globe as hunter gatherers was through cooperation and mutual support. A lone wolf cannot support themselves if they are hurt, or sick, or lack a skill, or simply didn’t save enough food in hard times. But a community can.
So, I don’t think our nature is individualistic so much as capitalism is individualistic.
First social creatures that "discovered" hierarchies were lobsters about 300 milion years ago. This is before even trees existed. Very long time from the evolutionary perspective, i.e. they do provide advantage to species that employ it.
The biggest problem is people who insist one of those stances is the only correct one in practice, as well as morally, and deride other proven better options simply because of an ideological distaste for it.
A lot of us here are from the Tech and specifically software industry, and one of the most common refrains is to use the best tool for the circumstances. Sometimes that may be a functional language like Haskell, and in other cases may be Javascript.
The same concept applies to central planning vs markets. Both are just a few of many tools, and the correct approach is to pick the best tool for the specific job.
What China learnt in the past 4 decades was how to manage the beast, not behead the messenger and have an effective planning anchored in true market signals.
Another point worth mentioning is that the Four Tigers are working with a planning and investment horizon of 30-50 years. Since they don't have to justify every four years about what they've been up to, they can be more effective in chasing bigger investments that have a longer-term ROI such as research, education, strategic industrial branches.
Now how do you compete with that?
I think saner governments manage that pretty well, they know research is good and beneficial so there's no questioning.
Meanwhile in the USA, coal is or is not a health risk as policy dictates.
The ECB monetary politics was never meant to "save" any specific country (a whole system, maybe. You could argue abut this).
On Beijing giving away money to Italy: it is a commercial deal we are talking about. The political implications of this deal are way more complex than a passing statement.
If you're China in 1980 or 1990 (ie third world infrastructure), vast infrastructure spend will faciliate your decades-long growth explosion. Without that, you can't become China of 2019, you can't actually go from a $400b economy to a $14t economy. The ports, roads, rail, bridges, utilities, energy generation, et al. is a requirement and produces extraordinary returns in a context like that. It drastically boosts economic productivity and raises your maximum output potential by a lot.
As another recently discussed (on HN) example, Romania has had one of the world's fastest growing economies in recent years. Economically it's attempting to push into a solid middle-tier economic nation, in the footsteps of countries like Poland, Chile or Slovakia. Romania simultaneously has a horribly lagging roads network that is in desperate need of expansion and improvement. It's very likely that properly building out their roads infrastructure would help facilitate their economic boom continuing; and that not doing so, would act as a serious point of friction on growth long-term. You can't get to $25k GDP per capita, with roads built for a $2k GDP per capita economy.
(See also: Stalinist industrialization. It was easier for central planners to focus on the hypothetical exponential impacts of "building machine tools to build machine tools", or to focus on building as many T-34 tanks as possible, than to actually design a self-sufficient war economy, which they never really had--there was a very strong reliance on imports of Allied food, radios, and other small goods.)
Thus China currently has a 400% debt to gdp, private firms defaulting and failing while state firms hoards and makes inefficient investments, most of the free world economies aligning against China, more than 1/3 of rich people in China wants to/ are in the process of leaving, etc
Only if you have competent leadership (which they seem to have right now). When you have a bad leadership and a dictatorship, there's no safeguard to prevent a total disaster to happen. The main advantage of a democracy isn't the power to the people but the separation of power, that's sometimes the last safeguard available to prevent a country to collapse.
Centralized / decentralized planning and democratic / autocratic decision making are orthogonal concerns.
It was my understanding that the Post-Mao creation of free-market-like conditions in China was an admission by Communist leadership that the Hegelian model of history could not be short circuited (as Lenin and Mao attempted), and capitalist style economics was required to industrialize, but that the capitalist economics was a temporary solution.
I could be mistaken though, and I'm curious why you thought they arrived there by luck.
However there's one exception, China. The gross output of China will soon be equivalent to the rest of the world combined. China consumes more cement and steel in five years than the US did in the last 100 years, and China has built more than half of the world's high-speed rails, in just 20 years. It's really a miracle.
That's why I think the BRI could be a real opportunity for many, where China tries to replicate its model of development to other countries through infrastructure building, and investment that those countries desperately need. The new silk road project will be the project of the century. For sure the Chinese will build influence upon it, even a new world order. Time to perfect your Mandarin skill!