Chinese Cash That Powered Silicon Valley Is Suddenly Toxic

[canoe]

Alternately one could assert that government suppression who I can choose as an investor based on the fact that the government doesn't like the views of the investor has some pretty serious First Amendment implications. I don't disagree at all that China does and represents a lot of bad things. And the government is certainly free to exclude any security risks from bidding on federal contracts. Beyond that, I'd argue that it's far safer for our democracy and way of life if public pressure forces companies to stop accepting VC money from China rather than making it "a crime" with the First Amendment suppression onus on the government. That's a big step in making our government guilty of the very things we dislike about China's! And from what I know of the VC industry this article is pretty accurate, the public pressure thing is working just fine to achieve the final results you and I both agree on.

absolutely. there's been a trend among americans to continuously rely on and give endlessly more power to the US government to solve our problems and look at how well that's worked out. it's a huge slippery slope. now some problems I agree do require more federal involvement but this is not one of them.

for federal contracts like Sig said, or other state/municipal contracts, government suppression is fine. but for individual decisions as to whether to accept chinese investments for their personal businesses, it would be an affront to our American values and the 1st amendment to let the federal government control who we can and cannot accept investment from. we need to stand up to China but not by becoming more authoritarian.

 

[newbreak]

China is a trillion to invest. and for 1 billion people with high saving rates and low debt. A lot of that 'investment' by Chinese investors was money laundering.. to move billions out of China. The Chinese gov't doesn't allow companies or individuals to move money out of the country. there is no private land ownership in China and no foreign ownerhship of companies and many industries are STATE owned. and STATE controlled. unlike American were entire country is owned by corporations, hedge funds ,and guys like Buffet who are parasites in the capitalist system. gov't and politicians are parasites producing nothing of value. same with wall street speculators producing nothing. but destroy companies and shutting down plants for more profit. lowering wages to slave labor wages etc.

 

[bone]

China is a trillion to invest. and for 1 billion people with high saving rates and low debt. A lot of that 'investment' by Chinese investors was money laundering.. to move billions out of China. The Chinese gov't doesn't allow companies or individuals to move money out of the country. there is no private land ownership in China and no foreign ownerhship of companies and many industries are STATE owned. and STATE controlled. unlike American were entire country is owned by corporations, hedge funds ,and guys like Buffet who are parasites in the capitalist system. gov't and politicians are parasites producing nothing of value. same with wall street speculators producing nothing. but destroy companies and shutting down plants for more profit. lowering wages to slave labor wages etc.

You kinda fell apart there. China is levered to the gills - $40 Trillion and counting. The PBOC has already injected over $1 Trillion worth of stimulus into the economy in 2019 - and I’ve read that they will likely have to do more of it now that export tariffs are a reality.

You are quick to criticize capitalism (that’s fair) but you pull your punches regarding the nefarious activities of the Chinese Communist Party beyond mentioning that they own everything and that they restrict capital flows.

 

[Sig]

I watched a 60 Minutes Australia piece on “one belt one road”. It’s a bit more nefarious than that. Many of these projects are deep water ports that Countries like Myanmar don't really need - but if Myanmar can’t pay China back guess who gets the port. China pitched it to Myanmar as a cruise ship destination but no cruise ships came calling. More like a Chinese Navy Cruiser destination.

Again, in all fairness, we spend many billions a year building deepwater ports for our navy all over Centcom and increasingly in Pacom, hell we have 30,000 troops in South Korea and regularly practice for an invasion of a country on China's border. Can you imagine how we'd feel if there were 30,000 Chinese troops in Guatemala or Belize and they had an annual full scale exercise focused on Mexico?

My real point though isn't that China's influence in Myanmar isn't nefarious, its that the U.S. has done something between jack and shit to invest in Myanmar since 2008 (looks like about $150M from all U.S. agencies per USAID (https://explorer.usaid.gov/cd/MMR?fiscal_year=2016&implementing_agency_id=1&measure=Obligations) and we have an administration that feels that any foreign aid that doesn't result in us getting commiserate dollars back from the recipient is foolish and anti-american so that's only going down. Why in the world should we be surprised, then, when for essentially pennies we give up our influence in Myanmar and the rest of the one belt one road countries because China is willing to invest there and we're not. Meanwhile, we spend over $700B a year on a defense budget. My assertion is that we're both being penny wise and pound foolish when it comes to winning friends and influencing people, and that it's naive bordering on hypocritical to suddenly be concerned about Myanmar when we could give FA about them before China became interested in them. Kind of like an ex who becomes jealous only after you get that hot new girlfriend!

 

[bone]

Again, in all fairness, we spend many billions a year building deepwater ports for our navy all over Centcom and increasingly in Pacom, hell we have 30,000 troops in South Korea and regularly practice for an invasion of a country on China's border. Can you imagine how we'd feel if there were 30,000 Chinese troops in Guatemala or Belize and they had an annual full scale exercise focused on Mexico?

My real point though isn't that China's influence in Myanmar isn't nefarious, its that the U.S. has done something between jack and shit to invest in Myanmar since 2008 (looks like about $150M from all U.S. agencies per USAID (https://explorer.usaid.gov/cd/MMR?fiscal_year=2016&implementing_agency_id=1&measure=Obligations) and we have an administration that feels that any foreign aid that doesn't result in us getting commiserate dollars back from the recipient is foolish and anti-american so that's only going down. Why in the world should we be surprised, then, when for essentially pennies we give up our influence in Myanmar and the rest of the one belt one road countries because China is willing to invest there and we're not. Meanwhile, we spend over $700B a year on a defense budget. My assertion is that we're both being penny wise and pound foolish when it comes to winning friends and influencing people, and that it's naive bordering on hypocritical to suddenly be concerned about Myanmar when we could give FA about them before China became interested in them. Kind of like an ex who becomes jealous only after you get that hot new girlfriend!

I take your point.

My impression from the 60 Minutes Australia piece was that the Chinese OBOR program isn’t a grant in aid - it’s a Loan where China takes over the port facility if the loan doesn’t get paid back. And Myanmar has no way of paying back the loan.

 

[Sig]

I take your point.

My impression from the 60 Minutes Australia piece was that the Chinese OBOR program isn’t a grant in aid - it’s a Loan where China takes over the port facility if the loan doesn’t get paid back. And Myanmar has no way of paying back the loan.

I don't know that our aid has to be direct aid. You and I both would probably be able to round up a pretty big chunk of change in private funds to spend money in the power sector in Myanmar, for example, if we had some federal guarantees to cover the risk that the counterparty disappears over the next 15 years. That's certainly a federal liability but over a portfolio of 50 countries it would probably cost very little over time.

 

[bone]

I don't know that our aid has to be direct aid. You and I both would probably be able to round up a pretty big chunk of change in private funds to spend money in the power sector in Myanmar, for example, if we had some federal guarantees to cover the risk that the counterparty disappears over the next 15 years. That's certainly a federal liability but over a portfolio of 50 countries it would probably cost very little over time.

I’m afraid that US foreign aid (and military spending for that matter) is likely to become a casualty regardless of which political party holds power - domestic priorities like single payer health care and infrastructure are going to require intensive re-prioritizing. I’m not going to say that’s necessarily a bad thing / but I don’t see how foreign aid and military spending don’t get severely curtailed.

Both Parties are talking about big ticket spending priorities that will essentially create a more isolated, domestically focused America.

 

[JSOP]

In all fairness, those countries were mostly ignored by the west which made them easy pickings for China. Now we're only interested in them because China is. Kind of echos the worst of the imperialism from the past and doesn't make for great policy on the part of the west.

Yeah but what China is doing is not so much different with what the West did during the Imperialism period. The only difference is China is using money and the West used violence and weapons but the end result is the same, exploitation of weaker economies for resources, natural or human or both for the expansion of its own economy while doing nothing beneficial for the weaker economies. The way that China is carrying out precious metal mining in those African countries destroying those countries' environment, creating toxic health and environmental hazard at the same time wiping out many times permanently its otherwise lucrative and sustainable local ventures by destroying the resources that these local ventures depends on thus decimating economic diversity leaving no recourse for the local economy once the mining operation is done leaving the countries at a worse off state struggling on their own while China has gotten what it needed to expand its own economy. This is no different from what the Western Imperialists did with their colonies. China has forced all the western companies who want to set up shop in China to transfer technology to China but do they do technology transfer their mining technology with these African countries for them to carry out their own mining operations? China is doing exactly what it always accuses the Western "Imperialists" were doing back in the 19th century and has become exactly the Imperialists that they loathed and no better. It's amazing what and how money can do to people!

And in addition to what @bone said, China's "one belt one road" is not just nefarious but also unscrupulous. Countries with weaker economies are "persuaded" to incur high amount of debt lent to them by the good peaceful China who knows fully well that are well beyond those countries' ability to pay for those "infrastructure projects" on geopolitically strategic sites such as ports, train networks and etc. And when those countries can't pay, China of course forgives the debt but in exchange for those strategic sites. This is nothing short of blatant invasion and is even worse than invasion. Those countries just lost part of their sovereign territory permanently to China and would have no recourse to get it back. At least in an outright invasion, if you ever get strong enough and fight back and kick the invaders out, you can get your land back and the invaders are seen as the bad guys, the aggressor. But once you sold your land out for debt repayment, the land is gone, forever lost. You can never get it back and China is seen as the nice guy, there to "help their fellow brother countries to repair and improve their country's living standards". For all the invasions that the west had to carry out with weapons and human lives lost, China just did it effortlessly without even using a single gun or a soldier and with all the "positive images" to boot. And the country that just lost their land can't even fight back because China's action would be considered legitimate because they are bound by contracts. And if the country that lost the land wants to get their own land back, all of sudden they are the bad guys because they would be in breach of contract!! Isn't that amazing? You want your own house back and you are all of sudden the bad guy!!

USA should really copy this strategy from China to woo over those strategic countries with $$ instead of using aircraft carriers, lot more effective that way and lot more "positive". USA should invest more in the State Department instead of Pentagon, train more diplomats and businessmen instead of soldiers. There is a reason why you make love not war because love is lot more powerful; it truly does conquer all.

 

[JSOP]

Again, in all fairness, we spend many billions a year building deepwater ports for our navy all over Centcom and increasingly in Pacom, hell we have 30,000 troops in South Korea and regularly practice for an invasion of a country on China's border. Can you imagine how we'd feel if there were 30,000 Chinese troops in Guatemala or Belize and they had an annual full scale exercise focused on Mexico?

My real point though isn't that China's influence in Myanmar isn't nefarious, its that the U.S. has done something between jack and shit to invest in Myanmar since 2008 (looks like about $150M from all U.S. agencies per USAID (https://explorer.usaid.gov/cd/MMR?fiscal_year=2016&implementing_agency_id=1&measure=Obligations) and we have an administration that feels that any foreign aid that doesn't result in us getting commiserate dollars back from the recipient is foolish and anti-american so that's only going down. Why in the world should we be surprised, then, when for essentially pennies we give up our influence in Myanmar and the rest of the one belt one road countries because China is willing to invest there and we're not. Meanwhile, we spend over $700B a year on a defense budget. My assertion is that we're both being penny wise and pound foolish when it comes to winning friends and influencing people, and that it's naive bordering on hypocritical to suddenly be concerned about Myanmar when we could give FA about them before China became interested in them. Kind of like an ex who becomes jealous only after you get that hot new girlfriend!

To be fair China is not that "hot new girlfriend" (certainly not hot LOL) and is more like the controlling domestic abuser who's only going after your ex because of her connections to wealth and power. That would be a more fitting metaphor, I think. And it shouldn't be jealousy that the West feels right now (nothing to be jealous about really, the ex is not really getting any benefits, Myanmar is still poor still suffering), it should be deep concern and sense of urgency to come up with our more effective strategies. Taking on mountains and mountains of debt to spend billions after billions on the military to build aircraft carriers roaming around in the sea all around the world has proven to be far less effective and costly than just throwing a bunch of money to less developed countries in feined loans to take over permanently parts of their land strategic to world domination it seems.

So now the choice rests with USA. Whether it's willing to rechannel the money from Pentagon to the State Department and how fast is the most important decision that USA has to make. Democracy is a great political structure but one of its most important flaw is its speed because it makes decisions jointly and collectively by everybody not just by one person or one organization. Is the West willing to forgo or "modify" the democratic process to sacrifice the interests of others to achieve a certain goal faster? That's another important decision that USA has to make. I am glad USA has started the first step though: cut off the financial revenue source of China via more equitable trade deals and stopping IP thefts and IP transfers.