naked capitalism

don says:

This is what has been termed neo-colonialism: not occupation and/or a puppet government, but capital penetration to get what’s wanted without getting one’s hands dirty.

China, though, may find it difficult for reasons you state, especially in Latin America where the tradition of US colonialism is all to familiar to allow a new colonial power to emerge.

donna says:

http://online.wsj.com/article/SB120994205702565995.html?mod=googlenews_wsj

Experts attempting to understand the strategic aims behind China’s aggressive military expansion have generally focused on Taiwan. But a new naval base points at Beijing’s significant and growing interest in projecting power into waters far from the Taiwan Strait. China, in fact, is equipping itself to assert its longstanding and expansive territorial claims in the South China Sea, and this plan could raise tensions well beyond the region.

The new base is near Sanya, a city on the southern tip of Hainan Island. It’s an ideal place for a naval base, and a significant expansion compared to the nearby naval base in the port city of Yulin. Sanya features much larger piers for hosting a large fleet of surface warships, a new underground base for submarines and comfortable facilities that would attract technically proficient soldiers and sailors. Its location will allow China to exert greater dominance over disputed territories of the South China Sea; to place a much larger naval force closer to sea lanes crucial to Asia’s commercial lifeblood; and to exercise influence over the critical Straits of Malacca….

Lune says:

IMHO, China is making the same strategic error that the U.S. has made with Iraq. If the Iraq war was about oil, it was a pretty stupid endeavor. We would have saved $500 billion (and counting), and kept oil prices lower by simply buying oil on the spot market, and investing in Iraqi oil infrastructure to increase their output (albeit at the cost of allowing Saddam Hussein to continue to rule).

The problem with empire is that if it isn’t done right, the external costs of maintaining your hegemony outweigh the benefits of whatever resources you’re extracting. As you hinted at, Yves, how much will it cost to maintain large mercenary armies in poorly governed, war-torn areas like Africa to secure these large tracts of land? And how much bribing will need to be done to keep governments docile while their own people are starving?

This is ultimately what happened to the Soviet Union: they created the Warsaw Pact countries as Soviet dominions, and treated them like colonies. But ultimately, the costs of suppressing independent streaks and developing local economies drained the Soviet Union of time, money, and attention, rather than contributing to its strength. What the Soviets had left was a consortium of weak states with crappy economies that needed constant support from the USSR. They ended up paying much more than they ever got from their allies.

For an example of empire done right, the U.S.’s European and Japanese suzerainty is a much better model. We helped rebuild their economies without a heavy handed colonial approach, and in the end, we have strong allies who contribute to the U.S. economically (through trade), militarily (NATO, pacific treaties), and geopolitically (by aligning with and supporting our foreign policies).

In the end, it is much easier and more fruitful to help develop a country, and then trade for its resources / products (i.e. the U.S. model), than to control a foreign govt and forcibly extract resources against the wishes of the local people (i.e. the Soviet model).

China (and the U.S., these days…) seems to be pursuing the old Soviet model, to its ultimate detriment…

Richard Kline says:

Buying the land is a bad play; it’s too visible, you’re tied to it, and too many people want it in the Third World. Buying the magnates and the politicians is a much better and more stable policy—but one that it doesn’t pay to advertise, no? After that, the magnate-politicians will act to protect their own stake and external relationships. It’s messy but flexible. China has shown talent for this. The US did once, but has been Ugly American and bigoted for sufficiently long we’ve lost our touch at ’soft imperialism,’ a misnomer, but.

Anonymous says:

Trying to enforce investments in South America could run into problems with the Monroe doctrine.

Africa could be more malleable but it will ultimately just increase instability. Perhaps they actually believe those laughable stats of 30% HIV-infected and expect land to be freed up soonish?

Perhaps China should invest in its backyard instead, ie Siberia. I’m sure that with global warming it should become an increasingly hospitable place for agriculture.

James says:

The Great Lakes are also governed by serious treaties. You’ll never be able touch that water ever.