August 31, 2019

The Promise of 'Belt and Road'

https://us.matthewsasia.com/perspectives-on-asia/market-updates/matthews-asia-perspectives-view/article-1630/The-Promise-of-Belt-and-Road.fs?

August 21, 2019

China's ambitious infrastructure initiative points to the potential of global cooperation.

Read the article, The Promise of 'Belt and Road' 

China's Belt and Road Initiative is a repackaging and acceleration of a policy that has been in place for some time. Officially announced in 2013, it simply gave a name to a pattern of development that had been evident since the turn of the century.1 But this repackaging comes as other parts of the world are turning in on themselves—the United States is going down a protectionist route; Europe is splitting apart as the lack of a real fiscal union exacerbates the divisions between rich and poor parts of the European Union. China, with its economic outreach across central Europe and its embrace of international trade and economic cooperation, increasingly is the standard bearer of globalization. In doing so, China is putting Asia at the center of global economic activity and putting itself at the center of Asia. History suggests that, often, the country at the center of global trade enjoys a period of economic prosperity and cultural enlightenment. It may also be the case for China. However, it is a case that few in the West embrace; it is almost as if they are jealous of China's new role.

In 2017, at Davos, China's President Xi Jinping ended his speech with a call for greater economic cooperation:2

“We Chinese know only too well what it takes to achieve prosperity, so we applaud the achievements made by others and wish them a better future. We are not jealous of others' success; and we will not complain about others who have benefited so much from the great opportunities presented by China's development. We will open our arms to the people of other countries and welcome them aboard the express train of China's development.”But this did not persuade many people in the Western intelligentsia. I remember being at a conference where the speaker before me gave a view on the state of the global political economy. Never once was China mentioned during the hourlong presentation, until the last sentence—and then, only to pour cold water on the idea that China was serious about globalization. I had to follow with my own presentation on China and globalization. I think the ensuing years have been more kind to my view. I would like to share why the Belt and Road Initiative is key to China's development and why China is serious about global economic cooperation.

Let me first point out, however, what the initiative is not. It is not an attempt to become a global policeman, like the role played by the U.S. China has neither the resources nor the will to take on such a role. It is not about British-style imperialism of the 19th century. China has suffered at the hands of such an aggressive approach and is sensitive to the backlash it can cause. Nor is China embracing the tenets of democratic liberalism—and I think it is this part of the ethos of globalization that the intellectual West finds hard to stomach. They fear that China is not serious about the West's notions of democracy—and they are surely correct in that. But their fear that China seeks to spread dictatorship is wrongheaded and a misunderstanding of what China really seeks. What China seeks is secure borders and friendly neighbors. It seeks to offset an aging population by investing in young labor. It seeks to pursue a knowledge and services-based growth and to find a cheaper way to manufacture goods. It seeks to increase wages and demand outside its borders as a way to increase the wealth and prosperity of all, including its own citizens. China is following a well-trodden path to prosperity that it has created within its own borders: build the infrastructure, open the markets, learn how to mechanize, create a manufacturing base and watch productivity grow. These are the building blocks of China's own growth and the platform upon which it stands ready to create a modern, services-led domestic economy.

The Economics — Youth, Manufacturing and Ascending the Value Chain

China's population has an average age of 37.4 years. That of Vietnam is 30.5 years; Indonesia is 30.2 years; Malaysia is 28.5 years; Pakistan is 23.8 years.3

 

These younger countries also have economic living standards that vary from the equivalent of 19th century U.S. to perhaps the 1950s. Many of these economies suffer from a low ratio of manufacturing to GDP. With a global average of 15.6% of GDP in manufacturing, China stands at 29%—a manufacturing powerhouse. Vietnam is at 16%; Indonesia at 20%; Malaysia at 22%; and Pakistan at 12%.So, China, by allowing its companies to move their labor-intensive operations into these regions of Southeast Asia and Central Asia and the subcontinent, can at one fell swoop mitigate the effects on productivity of an aging workforce, allow its own workers to move up the value-added chain into knowledge-intensive industries, and create increases in productivity and real wages in neighboring countries that will increase both the demand for Chinese goods and services and the supply of goods to China itself.
 
China is well-placed to partner with these countries in their development. Not just because of its geographic proximity but also because of the Chinese advantage of economies of scale. Building infrastructure at low cost and selling high-quality capital goods at low cost offers exactly the capital stock these countries need to develop at the price points they can afford. It is exactly what economic cooperation should deliver—prosperity for all based on the relative advantages and weakness of each country's inhabitants. Its very essence is the kind of economic cooperation that is lauded elsewhere in the world for the political stability it has created along with the wealth it has generated.

2019 will be the eighth-consecutive year in which the services sector is the largest part of the domestic economy in China. Leisure, media and entertainment spending, particularly online, continues to outpace growth in GDP.5 China is changing as it gets richer—the lives of its citizens are changing. Chinese today have more intellectual and spiritual freedom than they dared imagine when I was a student in Beijing in the late 1980s. Chinese now want quality of life—and what that means for environmental, social and artistic advancement. Yes, all of this has to take place under a single-party regime that is anathema to the Western idea of justice, but we cannot deny China's achievements in offering many other freedoms to its people. The Belt and Road Initiative is helpful to expanding these economic freedoms across China's population and ensuring the popularity of the regime by offshoring some of the more menial and less-skillful jobs in China's economy.

Politics, the Stabilizing Influence of Global Trade

China's domestic growth story is one of the greatest humanitarian achievements in history. In 1981, 835 million people lived in poverty in China, out of a total population of 1 billion people. Today, 30 million Chinese live in poverty, out of a population of 1.4 billion.6 This stunning reversal has taken China from developing-nation status to a middle-class nation in one generation. Among the regions around the world that can be pulled upward to join this global middle-class normality, four stand out: Latin America, Africa, Southeast Asia and Central Europe. Whereas Latin America may be forced to rely on a change of heart in the protectionist-leaning U.S. to kickstart its growth, Southeast Asia, Central Europe and the east coast of Africa are precisely those areas targeted by the Belt and Road Initiative. The potential humanitarian implications are huge as the areas within the embrace of the Belt and Road infrastructure initiative account for perhaps two-thirds of the world's population.

The map above shows the arm of relative poverty reaching out westward from China's borders toward Europe. Chinese investment, not European or American, is forging a bridge between the global rich and poor. And Chinese investment is now reaching into Europe itself. For ever since the Global Financial Crisis of 2008, parts of Europe have struggled to perform economically, given the straightjacket of European fiscal policy. Where the EU won't spend, China will. In March of this year, Italy signed a memorandum of understanding that will give China the ability to develop the ports of Genoa and Trieste, more closely linking Europe to Central Europe. Greece, too, has signed onto the initiative as China has transformed Piraeus, a defunct port outside Athens, into Europe's sixth-largest container port.7 In a global economy that is stuck with low interest rates (negative through much of Europe) and central bankers who are reluctant to improvise too much with monetary policy, China's fiscal power can sustain demand in parts of Europe that would otherwise keep falling behind.

The Complaints

There has been a lot of pushback to China's Belt and Road Initiative. Much of it is from Western governments and the media, who fear the rise of China. I suspect they fear that China is trying to use infrastructure development to influence countries politically. This may be true in the sense that China wants to achieve détente with these nations; but there is no sense, to my mind, that China is looking to interfere in the political and legal systems of these countries. Perhaps Western fears go even further—that China will not seek to spread the values of Western liberalism as part of its massive globalization initiative. Here, the concerns are surely right. We are seeing the globalization of the so-called Washington Consensus8 being replaced with a globalization that seems much more pragmatic, or non-prescriptive, and non-interventionist. This may result in hurt pride but it is not necessarily a step backward. Even the most ardent supporters of free-market economics and liberal democracy must admit that there is a trade-off between achieving these worthy goals and having enough calories to consume and enjoying a sense of hope for the future.

Non-interventionism has a cost, though. With so much public spending, the risk of corruption is high. Many of the participating countries are lower-income countries with weak institutions and governments with little incentive to investigate or expose their own elites to transparency. China's disinclination to hold local elites accountable risks higher-than-usual rates of corruption in the infrastructure spend—an activity known for its susceptibility to wastage and theft. These practices could well detract from the overall mission and efficacy of China's efforts, in addition to potentially shoring up some regimes that might otherwise not be tolerated. The world is trying to put pressure on the Chinese to improve governance, but I suspect China will move slowly to meet their concerns.9

Governments have also pushed back against some of the Belt and Road projects. They have legitimate concerns about the amount and terms of the debt accrued to make the investments. In this case, however, the Chinese have time and again renegotiated. Since 2010, 24 countries have been able to renegotiate loans with China as part of the initiative, including write-offs, deferrals and extensions. In addition, Malaysia renegotiated the terms of a deal to build part of its railway system.10 Recipient countries are able to borrow from international markets and institutions such as the IMF; China's economic clout is constrained by this competition. Also, a sense of China's own history prevents it from seeking punitive lending. It is seeking to build relationships over the long term, not to destroy them.

Misrepresentation of the debt issue is common. The Sri Lankan port of Hambantota, for instance, is often cited as a sign that the Chinese are trying to seize assets. The story falls apart under scrutiny, however, as the Sri Lankan government was actually under pressure to repay IMF loans. The failure of the port after Chinese investment can be explained partly by sluggish world trade since the Global Financial Crisis. It is hoped that a new investment by China, in the form of a 99-year lease, will turn around the port's fortunes. This is hardly a tale of overbearing Chinese debt burdens and aggressive asset seizures that the Western media would like to present.11

The Investment Case

For investors like us, what does this mean? Well, in many senses the investment case for the Belt and Road Initiative is very strong. If you think of all that the Chinese government can achieve through these investments, in terms of economic diplomacy, secure borders, maintenance of high living standards at home and the continuing development of modern lifestyles, then the initiative has high returns indeed. But these are not the kind of returns that interest private investors. This does not speak of a return on invested capital measured in dollars. No, the opportunities to profit from the infrastructure development are not likely to lie in direct participation in the project itself. For here, one is likely serving the interests of one government or another. Returns are measured in political stability and national pride.

As the Belt and Road Initiative continues, however, it will cut shipment times and potentially lower transport costs. Taking the railway from East China to Europe is much faster than using the container shipping routes.12This will draw many more people into global markets, increasing efficiencies and driving up productivity and wages. Investors might profit by owning shares of private businesses, in China and other countries, that make use of these productivity improvements to lower costs. Investors might also look at companies that sell directly to local consumers across the various Asian parts of the Belt and Road Initiative. As wages rise, demand for their products and services will rise, too. Private businesses that use the new infrastructure to transport and market goods may also profit. All sorts of businesses may arise that meet the desires of newly globalized populations for a better life. The investment case and the humanitarian case are intertwined at this degree—a degree once removed from the initial investments. But the opportunities for profit and human advancement both are real; they just require a little patience.

China as a Standard Bearer of Globalization

China is no paragon of virtue. And perhaps up to now, no country has done more to shape the lives of the 20thcentury global population than the U.S. But the U.S. has done so partly because of its influence on China itself. And it is somewhat ironic that it is now China that is the driving force for extending many of these values of globalization into areas of the world that have perhaps lagged a little behind. China's rejection of liberal democratic principles and some of the West's political institutions perhaps blinds us to the great potential for humanitarian good and economic advancement that the Belt and Road Initiative offers. No, it is not perfect—nor was the Washington Consensus. However, China, in the eyes of the participating countries at least, which have voted with their labor and their capital, today represents one of the best hopes for economic advancement through global collaboration.

Robert Horrocks, PhD
Chief Investment Officer
Matthews Asia 

1 The World Bank
2 CGTN America
3 World Population Review
4 The World Bank
5 Statista
6 Gapminder
7 PortEconomics, data as of 2018
8 Wikipedia
9 The World Bank
10 Rhodium Group
11 Hellenic Shipping News Worldwide
12 BBC

The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. Investment involves risk. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Past performance is no guarantee of future results. The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information. 

KASHMIR: Indian Counter operations a glimpse

Will have to shoot your son if he doesn't drop guns... Army officer tells Kashmiri terrorist's family

https://youtu.be/pRdANQ8k7tw

A calm and no nonsense message to family of a terrorist in Kulgam by an Indian army officer, warning them to conduct the Janaza (burial) of their terrorist son without causing more deaths. He gives them 2 choices, either ask your boy to surrender or plan for a peaceful funeral for him soon.

“Made in China 2025” Unmade?



Eliot Chen

Eliot Chen was an inaugural MacroPolo Summer Associate, where he spent 10 weeks in Chicago conceptualizing and executing on this project. Eliot is now completing his studies at Princeton University, where he is majoring in political science. The analysis and findings are solely his. All questions and follow-ups should be directed to Eliot at eliotchen@princeton.edu. You can follow Eliot on Twitter @eliotchen97.

“Made in China 2025” Unmade?
Visualizing Beijing’s Response to US Pressure Through Media Analysis

Key Findings

The sudden purging of “Made in China 2025” coverage in Chinese official media was likely a direct response to the escalation of US-China trade tensions after March 2018.Media analysis of MIC2025 shows how the ebb and flow of coverage can be deliberate and calculated, particularly as Beijing responds to pressure and backlash from abroad.Official media is inherently a political tool, so the fact that Beijing proactively dialed back media coverage of its cherished MIC2025 may be considered a modest concession of sorts. But Beijing’s move appears to be more of a “concession in perception” rather than meaningfully weakening the policy.Continued references to MIC2025 in media coverage of China-European relations throughout 2018, as well as frequent usage of related catchphrases, suggest Beijing is still pursuing some version of the industrial policy as part of its foreign relations.More similar cases and data are needed to better determine how China manages its media when confronting external pressure and to offer some predictive utility of Chinese behavior in these instances.

 

US and Chinese Media Coverage of the “Made in China 2025” Initiative

Chinese media coverage

US media sentiment

Negative
Positive

CHINAUSJulyAugustSeptemberOctoberNovemberDecember2015FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember2016FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember2017FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember2018FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember2019FebruaryMarchAprilMayJune

Methodology in Brief

Articles in Chinese and US media were sourced from People’s Daily, Xinhua, The New York Times, The Washington Post, The Wall Street Journal, Politico, and The Hill, with dates ranging from the earliest mention of “Made in China 2025” to July 1, 2019. The total sample size is 2,975 (CN = 2,542; US = 433).

On the US side, sentiment analysis was conducted on the contents of each article using the AFINN lexiconto pair each word with an integer score on a positive-negative scale of 5 to -5. Chinese articles were not subject to sentiment analysis because tools are still insufficient to properly and accurately conduct such analysis on Chinese language content.

A full explanation of the methodology can be found at the end of the analysis.

 

Introduction

When China launched its 21st century industrial policy under the banner of “Made in China 2025” (MIC2025) in May 2015, few in the United States were paying attention. While China specialists may have examined MIC2025’s contents and analyzed its significance, it took about three years before the plan became a focal point of US-China trade tensions.

One factor that changed significantly in those three years was the intensity of US media coverage of MIC2025. The spotlight that was eventually placed on the plan got Washington’s attention: from think tanks and business groups to Congress and policymakers, MIC2025 quickly became short-hand for China’s “Sputnik moment” aimed at surpassing and then replacing US technological leadership.

The timing also aligned with a shift in China strategy under the Trump administration, where MIC2025 became the embodiment of Beijing’s unfair competitive practices that included subsidizing state enterprises and crowding out foreign competitors.

The outcome of the convergence of US mainstream media and policymakers’ intense focus on MIC2025 is now well known. MIC2025 became a central target of the US Trade Representative’s Section 301 report in March 2018 that effectively launched the trade war. On the Chinese side, shortly after the issuance of the report, all coverage of MIC2025 in domestic official media virtually disappeared.

But when exactly did China kill all mentions of MIC2025? And why did Beijing take this action? Was it a response to US pressure?

This case study seeks to offer some preliminary answers, in part by reconstructing the sequence of events that led to the eventual outcome on both the US and Chinese sides. Based on a first-of-its-kinddataset, this case captures both the blow-by-blow and the scale of US and Chinese media coverage of MIC2025 from 2014 to 2019. The data is complemented by sentiment analysis to determine whether the extent of negative or positive US media coverage may have also factored into Beijing’s response.

Media analysis can be a useful approach that yields insights on how behaviors and perceptions could affect policy actions and responses. Existing literature has shown how media coverage, headlines, and public discourse can shape mutual perceptions and influence elite opinion. Elite opinion, in turn, tends to affect policy actions. For instance, research has shown that foreign affairs coverage in US media tends to mirror the current administration’s preferred policies.

My analysis attempts to quantify and explore the correlation between American elite perceptions and whether they affected Chinese responses specific to MIC2025. The findings offer some inferences of this relationship, but additional case studies and data are needed before general conclusions or causal linkages can be established.

Nonetheless, this approach can potentially be applied to other areas of policy interest in the future, particularly where media has a disproportionate impact on how particular issues are viewed and characterized.

What Happened to MIC2025, and How Did It Happen?

MIC2025 (中国制造2025) first cropped up in Chinese official media at the end of June 2014, and then steadily picked up in 1Q2015, expanding significantly after the plan’s formal launch in May of the same year. From 2015 to 2017, Xinhua and People’s Daily published over 1,400 articles referencing the plan, with the coverage peaking in 4Q2015. During that period, MIC2025 was referenced in more than four articles a day.

By contrast, US media coverage of the plan was minimal over the same period. All told, the five media outlets from 2014 to 2017 published just 17 articles that mentioned MIC2025. When coverage finally shot up in 1Q2017 (up 50% compared to the previous quarter), negative news reports of the plan also began to emerge. The change in quantity and tone of coverage followed shortly after Berlin-based think tank MERICS published its 76-page report on MIC2025 in December 2016.

One of the first major criticisms of the plan actually came from the European Chamber of Commerce, which cited the MERICS report. Senior Chinese officials then responded andpublicly defended MIC2025 for the first time. This sequence underscores how American media outlets appear to be rather slow in recognizing the significance of Chinese policies, even a plan as expansive and exhaustively covered in Chinese media as MIC2025.

Figure 1. Peak US Coverage Lagged Peak Chinese Coverage By 10 Quarters

Sources: People’s Daily, Xinhua, The New York Times, The Washington Post, The Wall Street Journal, Politico, The Hill.

At this point, the US media’s attention intensified. Coverage of MIC2025 saw mostly continuous growth from 2017 to about the end of 2Q2018. That quarter marked peak MIC2025 coverage, likely directly related to the issuance of the Section 301 report that referenced the Chinese plan a full 116 times. For the first time in 2Q2018, US media coverage of MIC2025 surpassed that in the Chinese official media.

Notably, the sentiment of the US media’s coverage began to tilt negative at this time as well. My data show an increasing amount of negative coverage referencing the plan emerged after the Section 301 report, suggesting that the tone of media’s coverage started to converge with the critical view of the Trump administration.

However, net sentiment was still in positive territory in the aggregate, even after the release of the Section 301 report. While this may suggest that the tone of MIC2025 coverage had little effect on perceptions, it’s worth noting that negative sentiment articles spiked dramatically and suddenly from essentially zero. As a result of the low-base effect, policymakers that began paying attention to MIC2025 coverage around this period would likely feel bombarded with negative coverage of MIC2025 even if the aggregate is net positive (see Methodology for further explanation of sentiment analysis).

For the rest of 2018, US media coverage of MIC2025 remained relatively consistent before petering out in 2Q2019. This could be due to the fact that for the previous three quarters, mentions of MIC2025 basically vanished from Chinese official media.

Why Did Beijing Scrub MIC2025 from Official Media When It Did?

Based on this data, MIC2025 coverage in the Chinese official media basically disappeared on May 17, 2018, more than a month before US newspapers began reporting on its suspension at the end of June 2018.

The timing of this cutoff is noteworthy, because it followed a flurry of activity in US-China relations, including the release in March of the Section 301 report, the Trump administration’s April announcement of slapping tariffs on $50 billion of Chinese goods, and trade negotiations from May 2-4 that ended with no deal.

Figure 2. Coverage of MIC2025 Abruptly Suspended

Sources: People’s Daily, Xinhua, The New York Times, The Washington Post, The Wall Street Journal, Politico, The Hill.

It’s curious why Beijing chose to make the move of preventing all mention of MIC2025 in Chinese media. Although it’s impossible to know exactly what transpired during trade negotiations, this retreat from Beijing on the domestic front did not seem like one of themajor demands from the US side. Washington instead wanted Beijing to halt subsidies to MIC2025 industries and to accept US restrictions of Chinese exports from MIC2025 industries.

Although difficult to infer correlation, the week that MIC2025 coverage ceased in Chinese media was the same week the US President announced on Twitter that ZTE would get amnesty. Just two weeks earlier, China had pressed the US to relax its ban on the supply of American components to ZTE, which had been punished for violating US sanctions on Iran.

A subsequent leak of an official directive in June 2018, picked up by China Digital Times, re-emphasized that the media should not report on MIC2025, confirming that China’s Central Propaganda Department had earlier issued a media gag order to not mention the plan. While the timing of the gag order may have been mere coincidence, it’s possible that Washington’s leniency on ZTE factored into Beijing’s response on MIC2025 at that time.

What Coverage of MIC2025 Remained?

Coverage of MIC2025 in Chinese media did indeed decline significantly after May 17, 2018. What little remained–about 40 articles over an entire year–were mostly stories about factories launched or new schools built to further MIC2025 goals. More than a quarter of these articles were editorials or op-eds, often condemning the US position in the trade war.

At least one article, published in both Xinhuaand People’s Daily, stands out because it incorporated MIC2025 as part of a historical account celebrating the 40th anniversary of Reform and Opening Up. The fact that MIC2025 is being directly linked to Reform and Opening Up suggests that Beijing continues to attach significance to the plan, if not in name then in substance and spirit.

Figure 3. MIC2025 Articles Still Trickled Out After the Ban

Sources: People’s Daily, Xinhua.

Of some note are the five out of the 40 articles that mention MIC2025 in the context of China-European relations. These articles date from mid-2018 to spring 2019, and include pieces about strengthening ties with Italy, cooperative dialogues with the EU, and ameeting between President Xi and French President Emmanuel Macron. The latter pieces were published in both Xinhua and People’s Daily with identical headlines and content, suggesting that the inclusion of MIC2025 was no accident but a deliberate move.

Even though a major European business group was the first to criticize the plan, Beijing appears to believe that MIC2025 is not nearly as controversial or sensitive in China-EU relations. It’s possible Beijing believes that some EU countries would be more willing to work together on MIC2025.

Is MIC2025 Really Dead or Just Replaced?

The term MIC2025 may have been put on the “endangered terms” list but its spirit seems to live on under different guises. To determine whether the spirit of MIC2025 is still alive, Ilooked at relevant phrases often associated with MIC2025 to see whether there was any corresponding increase in their usage after May 2018. 

Two terms that relate to MIC2025 are “indigenous innovation” (自主创新) and “core technology” (核心技术). These are not new—the former has been used officially since the Jiang Zemin era (1989-2002)—but analysts believe they have gained renewed significance under President Xi’s new development priorities and are closely associated with MIC2025.

Figures 4 & 5. References to “Indigenous Innovation” and “Core Technology” vs. MIC2025

Sources: People’s Daily, Xinhua.

The data show that after the official retirement of MIC2025 in mid-2018, mentions of “indigenous innovation” remained steady, while references to “core technology” actually saw an uptick on average. But 2Q2019 saw a spike in both terms, up 200% and 400% respectively since April, suggesting that these terms could again dominate discourse on industrial policy priorities, with or without MIC2025.

In fact, even MIC2025 may be seeing a mini revival since May 2019, following the abrupt end of yet another round of US-China trade negotiations. References to MIC2025 have resurfaced in Chinese official media not only in spirited denunciations of the US trade warposition but also in the type of regular domestic news that were common before May 2018.

The Remaking of MIC2025?

The sudden purging of virtually all coverage of MIC2025 in Chinese media was likely a direct response to escalating US-China trade tensions after March 2018. However, rather than conceding to US demands to significantly weaken the policy, Beijing’s move appeared to have been more of a “concession in perception.” That is, the term may no longer be discussed much, but the industrial policies around which MIC2025 is built have not disappeared, as evidenced by the continued referencing of “indigenous innovation” and “core technologies.”

More broadly, media analysis of this particular policy shows how the ebb and flow of coverage can be deliberate and calculated, particularly as Beijing responds to pressure and backlash from abroad. This points to the possibility that media coverage is more than just a blunt instrument of propaganda—it is often used tactically for marketing policy priorities and to manage perceptions, both domestic and foreign. Since official media is inherently a political tool in China, the fact that Beijing proactively dialed back media coverage of its cherished MIC2025 can be considered a political concession.

Whether this is sufficient to permanently shift the spotlight away from MIC2025 in trade negotiations is a question that needs further investigation. Moreover, to move beyond the preliminary insights contained in this analysis will require examining more cases of Chinese policies that are considered controversial in the West. 

Some of these cases may include the Belt and Road Initiative or the notion of “self-reliance.” With more cases and data, a pattern may emerge in how China manages its media when confronting external pressure and may even offer some predictive utility for Chinese behavior in these instances.

Appendix: Methodology

Data Sources

On the Chinese side, data collection focused on Xinhua News Agency and the People’s Daily—the official media of the Chinese government and the Chinese Communist Party’s Central Committee, respectively. On the US side, data was collected from five mainstream media outlets: The New York TimesThe Washington PostThe Wall Street JournalThe Hill, and Politico, which were selected based on their authority, elite readership, and coverage of foreign policy.

Data Collection and Processing

I used the internal search engines of each of the five US newspapers to identify every article that contained the term “Made in China 2025” in either its title or body. The URL of each article was recorded, and then the websites were scraped in R using the httr and rvest packages. Headlines and body paragraphs were scraped separately, along with their online date of publication. Any duplicates within the same newspaper were identified and deleted.

In terms of the data from People’s Daily and Xinhua, the titles and publication dates of every article that referenced “中国制造2025” from June 2014 to end of June 2019 were scraped.  In cases where the two publications had identical articles, both copies were retained in my database.

Sentiment Analysis

The sentiment analysis for this dataset focused on the body paragraphs of English-language news articles. Because sentiment analysis in Chinese language is still being developed and remains relatively imprecise, I opted not to include it for Chinese sources.

Headlines were initially excluded and analyzed separately. This was intended to avoid skewing sentiment scores due to headline sensationalism or exaggeration. When it came to the body text of the article, the sentiment analysis was applied to the entire article rather than only focusing on specific paragraphs that contained references to Made in China 2025. This is because context matters: the overall sentiment of the article influences readers’ feelings and views about the plan itself.

Each paragraph was tokenized (strings broken into individual words) and stop words (the most common English words, including connectors and prepositions) were removed. Following this, each word was matched with a sentiment ‘score’ from the pre-constructed AFINN lexicon to score words on a positive to negative integer scale of 5 to -5. (The methodology for calculating individual word sentiment in the AFINN lexicon is documented here.) Aggregating the scores for each article, I then calculated a net integer score that represents the overall sentiment of each article.

To be sure, this method of measuring sentiment is imperfect. Breaking sentences and smaller strings of text into individual words strips them of their context, and as every word is taken literally, the analysis fails to recognize negations, exaggeration, or irony.

My selection process also necessarily entailed trade-offs: in order to capture the context of the article, each one was analyzed in its entirety, even if any reference to Made in China 2025 constituted a minor portion of the piece. Therefore, the primary determinant of the article’s sentiment score may not necessarily be references to Made in China 2025 itself, but something else in the article entirely. This may also partially explain why the sentiment scores turned out net positive in the aggregate.

In an attempt to mitigate some of these limitations, I repeated the sentiment analysis process for the subset of articles that included “Made in China 2025” in the first half of the article. This is based on the assumption that readers generally don’t read articles from top to bottom, and most only read the first 50%. Another analysis was conducted exclusively on headline content.

Comparing the distribution of sentiment scores using all three methods, I found similar distributions of sentiment scores in the full and half articles, with the headline-only sample exhibiting slightly more negative results. This probably reflects the fact that some headlines are more provocative or sensational than the actual article itself.





https://macropolo.org/analysis/made-in-china-2025-dropped-media-analysis/

Bridging Perceptions: China in Mozambique

Lauren Baker

Lauren Baker was an inaugural Summer Associate at MacroPolo, where she spent ten weeks in Chicago working on this project. Her work is based on on-the-ground insights and sources she cultivated during the year she spent in Mozambique as a Boren Fellow. A graduate of the University of Chicago’s Committee on International Relations, Lauren now resides in Washington, DC. All views and analysis are solely those of Lauren. All follow-up and questions about this project should be addressed to Lauren: lebaker23@gmail.com.

Executive Summary

Concern about China’s role in Africa’s economic development is mounting. Chinese finance and investment on the continent is frequently folded into all-encompassing neocolonial narratives about Beijing’s Belt and Road Initiative (BRI) and so-called “debt-trap diplomacy.” Yet African governments by-and-large do not endorse these concerns and many continue to pursue closer ties with China.

Mozambique is one such country at the nexus of East and Southern Africa. The government in Maputo, the capital, has seen a raft of preferential loans and direct investment from Chinese state and private companies flow into its struggling economy. The Mozambican case deserves attention because the Chinese presence in the country, an under-developed former Portuguese colony, is barely known relative to its wealthier and English-speaking neighbors.

Unlike the US-China relationship—in which economic and trade issues are often intertwined with geopolitics and national security—Mozambique offers a case of China in Africa where elites by and large do not share these concerns. The Mozambican government embraces what one business elite describes as a “symbiotic” relationship with China. It actively encourages Chinese projects in the country and enjoys basking in the diplomatic spotlight that Beijing affords the country.

Where there is skepticism, it resides among the non-government elite demographic. But theirs is a skepticism largely borne out of how they view their own government: very corrupt. Therefore, Beijing’s high-level linkages with the notoriously corrupt Mozambican government leads these non-government elites to assume that a capitalist conspiracy or backroom deals are in the works. When Chinese firms seemingly finance white elephant projects in the country, the non-government elites tend to not take it at face value and believe that such projects must lead to preferential treatment elsewhere where China benefits or profits.

This kind of elite cynicism runs counter to prevailing critiques of China in Africa because it is a concern aimed squarely at China’s commercial motives rather than the debt and political influence issues that preoccupy Western capitals. For Washington, it might view the disconnect between the Mozambican government and non-government elites on China’s presence as an opportunity to bolster America’s image among this demographic. Moreover, the United States could consider investing in economic development efforts that avoids the perception of being complicit in extant corruption.

Introduction

Fireworks lit up the sky and reflected over the longest suspension bridge in Africa. Clearly visible from the rooftop I found myself on, the Maputo-Katembe bridge, opened in November 2018, linked Mozambique’s capital city to the underdeveloped beachfront community on the other side of the Maputo bay. Sidewalk vendors hawked merchandise with images of the bridge emblazoned on polyester t-shirts imported from China, all to celebrate a flagship project built and financed by—who else?—the Chinese.

Source: Author.

All over Mozambique, signs and banners emblazoned in Mandarin and Portuguese are raised daily, affixed to scaffoldings, storefronts, and even podiums that host presidents and ambassadors. If Filipe Nyusi, the sitting president, continues to be anything like his predecessors, Chinese activities will become common sights in the former Portuguese colony.

An enthusiastic recipient of Beijing’s financing and a strong proponent of Chinese private investment, Nyusi is one of many African leaders who recognizes an opportunity for a symbiotic relationship when he sees one. The shiny new Maputo-Katembe bridge would not, could not, have been a reality without such a relationship. Without the bridge, Mozambicans would still be resigned to the crowded rusty old ferry or driving hours around the bay.

Why then, as I stood among the educated, well-to-do residents of Maputo on a downtown rooftop, were so many people so upset about the bridge?

Maputo’s Official Warm Embrace…

The Beijing-Maputo relationship is strong, fortified through decades of political linkages and a mix of investment and preferential lending to a country wracked by debt and a challenging business environment. Even though Mozambique is one of the least-developed and the few non-English speaking countries in East and Southern Africa, it is a region today that is of crucial importance to China’s Belt and Road Initiative (BRI).

Among a long list of memoranda of understanding, trade assurances, and aid agreements, two facts worth noting are that Mozambique was the first African country to sign a Global Strategic Partnership Cooperation and Agreement and is a member of the Maritime Silk Road countries.

Maputo is hardly shy about publicly touting this bilateral cooperation every chance it gets. Not only do government officials regularly sing the praises of Chinese aid and investment, every president since independence has made multiple trips to China. In turn, Mozambique has hosted every Chinese president and almost every premier for official state visits.

Various unofficial linkages exist as well. Former President Joaquim Chissano chairs the political arm of the newly formed China-Africa Institute, and a brand new Confucius Institute is currently being built at Eduardo Mondlane University, the country’s most prestigious. According to data fromDevelopment Reimagined, East and Southern Africa are the most visited regions by Chinese delegations across the continent. This makes sense given the importance of the east coast for BRI and South Africa’s membership in the BRICS Forum.


Source.

Even though Mozambique is surrounded by powerful and wealthier African economies that are more important to China’s business and trade interests, it nonetheless enjoys Beijing’s enduring political and diplomatic favor. In many ways, the fact that high-level Chinese officials frequently visit Mozambique shines a spotlight on a country that has received little of it on the international stage. The Mozambican government seems to understand that well and actively encourages it.  

…But Mozambicans’ Skepticism

But a wide gulf exists between Mozambique’s official embrace of China and the pervasive skepticism found among non-government elites.

The focus on non-government elites is deliberate. In a predominantly poor and rural country such as Mozambique, non-government elites represent a uniquely important slice of public opinion: those with access to rich information on national political and economic matters, but with no obligation to toe the official line.

It’s worth noting that the opinions of non-government elites do not always align with the results of national public opinion surveysfrom Pew and Afrobarometer. Those surveys, which sample a much larger percentage of rural and typically low information voters, paint a rosier picture of Mozambicans’ perception of China, with 36% of respondents listing China as the best model for development. Those macro-level surveys constitute an important reference, but it remains inherently difficult to assess the relative position and influence of those holding either positive or negative views.

Conversely, among non-government elites—those who are socially mobile, educated, and wealthy enough to work in government-adjacent and private industry with some exposure to Chinese firms—it would be hard pressed to find positive attitudes toward China. This demographic’s views and perceptions have a higher potential to shape the country’s policies and priorities because their skills and networks make them much more likely to enter Mozambique’s business and political spheres.

The unifying sentiment among this cohort of elites is the deep cynicism they have about China. But it’s a cynicism that is wholly detached from the “debt-trap diplomacy” rhetoric espoused in Washington, DC and other Western capitals. Their fear isn’t over neocolonialism or that China might build military bases—it is a skepticism borne out of their belief that how Chinese enterprises operate in Mozambique is a reflection of their own government’s endemic corruption. In short, this perception exists largely because of the intimate nature of state-to-state cooperation.

As one of the least developed countries in southern Africa, Mozambique is an embryonic democracy beset by corruption and electoral integrity issues, and is classified by EIU’s Democracy Index as an authoritarian regime. Such nominal democracies tend to have weak bureaucracies and immature political infrastructure that can be easily captured by other interests and veer into crony capitalism. And the opaque and seemingly transactional nature of Chinese overseas financing and investment simply reinforces the public’s default assumption that its own government is working out sweetheart deals with Chinese investors.

The implications of this relatively entrenched perception may be important as China seeks to expand markets in developing countries across Africa and to win “hearts and minds” with initiatives like the Forum on China-Africa Cooperation (FOCAC). But the Mozambique case can also inform the current debate about China’s role in Africa and the US response, where cultivating soft power and elite alignments, as well as aid and development, have been important components of Washington’s strategy.

This case study is based on interviews and roundtables with 15 sources I cultivated in the non-government elite demographic, ranging from students at top universities to professionals in agribusiness, telecom, and the extractive industries. It is organized around three high-profile Chinese projects, each illustrating certain factors that have led to the divergence of views on China’s presence in Mozambique. To provide additional color and details of the sources’ experiences, this case also incorporates commentary from social media and other channels where this elite demographic shares views.

The first project, the Maputo-Katembe bridge, illustrates just how closely Mozambican government officials align themselves with China in the public eye. The second, a model farm and testing center, demonstrates how elite Mozambicans view Chinese as shrewd businesspeople, which leads them to question how Chinese-backed commercial projects can turn out to be financially unfeasible. The third, a commercial fishing port, serves as a prism through which speculation veers into conspiracy, revealing non-government elites’ suspicions that Chinese firms are benefitting from their own government’s corruption.

Irreconcilable Figures, Partial Portraits

Typical of low-income developing countries, Mozambique’s official data do not inspire confidence in their credibility. This is especially so when it comes to foreign economic involvement, where data are contradictory, often irreconcilable, and should be taken with a large grain of salt.

Take Chinese financing. China is Mozambique’s largest bilateral creditor at $2.2 billion, a trend that applies to Africa writ large. China has forgiven and restructured debts that Mozambique owes on a semi-regular basis ($36 million in 2017), though neither government disclosed which projects’ debt was forgiven. At a minimum, the data show that China’s lending frequently takes the form of soft loans directed towards mega projects that almost always involve additional direct investment by Chinese firms.

Figure 1. Debt to China as Proportion of Mozambique’s Total Sovereign Debt

Sources: UNCTAD; Johns Hopkins CARI.

When it comes to Chinese direct investment, the data, too, is inconsistent and often conflicting. The Mozambican government frequently reports total investment figures that are orders of magnitude higher than those from UNCTAD (most third-party figures are generally in line with UNCTAD’s). For example, in 2016 the government reportedly approved projects worth over $600 billion, while UNCTAD reported just $35 billion. The Chinese ambassador to Mozambique also claimed in 2018 that China was the biggest foreign investor in the country, which could be true if all the various soft loans and concessional financing were counted as “investment.”

Figure 2. Total FDI Stock Much Higher Than China-held Debt in Mozambique

Sources: UNCTAD; Johns Hopkins CARI; Anuário Estatístico de Moçambique.

Even accounting for these discrepancies, the level of foreign investment is still substantially higher than the level of Mozambique’s debt (see Figure 2). But overall, Chinese investment and its financing actually pale in comparison to the massive amounts of money pouring into the country from Western companies, particularly energy-related players. In 2017, for example, only 5% of all FDI flows into Mozambique came from China, while Chinese FDI stock was just north of 2% of total FDI stock. In fact, Chinese investment has averaged well below 5% of total FDI stock and flows over the past decade, according to UNCTAD and CARI.

Figure 3. Chinese FDI Stock and Flows vs. Total FDI Stock and Flows

Source: UNCTAD; Johns Hopkins CARI.

In the other direction, Africa makes up a growing but still minor part of China’s global economic interests. And Mozambique is, in turn, even smaller, especially when compared to regional economic powerhouses like South Africa, Kenya, and Tanzania. For instance, Africa as a whole runs a trade deficit with China, and Mozambique is in the same boat.

Figure 4. Like Africa Writ Large, Mozambique Runs a Trade Deficit with China

Source: Johns Hopkins CARI.

So if Mozambique is but a minor slice of China’s FDI portfolio, even within Africa, then why do Chinese-backed projects receive disproportionate attention—much more than other foreign investors—among elite Mozambicans?

The answer lies in the nature of Chinese investments and how the locals encounter and interact with Chinese presence. Three different cases illustrate how Mozambican elite perceptions are shaped, one project at a time.

The Bridge: High-profile Intrigue and High-level Political Linkages

The Maputo-Katembe bridge—the longest suspension bridge in Africa—perfectly exemplifies the high visibility of Chinese projects. Now the most recognizable landmark in the capital’s skyline, the bridge would never have been built without China. It was financed almost entirely by the China Exim Bank and built by the state firm China Road and Bridge Company.

As an expat consultant in the extractive industry told me, “The Chinese build a bridge and a road and everyone can see that they did it. Not everyone can see the impact of a European petrol company even if it’s bigger in the long term.”

It is true that American and European offshore LNG projects are literally more distant, whereas many more Mozambicans personally experience the bridge. But the real reason this infrastructure project receives so much attention is because the Mozambican government asks for it.

Over the course of the highly fraught construction process, official publicity kicked into high gear, effusively praising the project. When it finally opened five months late and tens of millions over budget, the government rolled out the red carpet. President Nyusi held a televised ribbon-cutting ceremony attended by the Chinese ambassador and other high-level politicians that closed roads and involved fireworks. The bridge only connected Maputo and Katembe, but the official pomp and circumstance surrounding it would lead you to believe that it symbolically linked the entire nation with China.

Source: Presidente Filipe Nyusi via Facebook.

Such mega projects are possible in part because of the extensive connections at the highest levels of the Chinese and Mozambican governments. The official embrace of China means that many Chinese investments, which tend to be tangible products and services, turn into highly lauded affairs. For example, the receipt of buses that China donated merited another ceremonyheld by President Nyusi, complete with ribbons and a full press conference in a municipal transportation lot.

The flip side of this level of publicity, however, means that Chinese initiatives also invite heightened public scrutiny, particularly in terms of their feasibility and motivations, as evidenced in heated Facebook debates.

Source: President Filipe Nyusi via Facebook.

I witnessed how that public scrutiny unfolded firsthand at the bridge opening confab. Over the pop and sizzle of distant fireworks, the well-to-do young professionals at a rooftop party scoffed at the lavish ceremony. They assumed the entire bridge project, as well as its many delays and cost overruns, was a profiteering scheme on the part of the Chinese state-owned construction company.

Artist rendering of the bridge before completion.
Source.

A graduate student at Eduardo Mondlane University bought a bridge t-shirt as a gag gift for a friend, who wore it to the party and got plenty of laughs and pointed comments. “Boondoggle” unfortunately has no direct translation in Portuguese.

But the reality is that the Chinese most likely lost on, rather than profited from, the bridge. The project was not financially feasible, evidenced by the dissolution of the state holding company three months after it was built due to lack of revenue. This means Maputo has been saddled with additional debt from the bridge, though it’s possible China Exim Bank could forgive those loans, as has happened in the past. In that case, China would eat the entire cost of the bridge. As one professional in the Mozambican aviation industry said, “There is no way to pay for these things [the bridge and road] and no way to pay back the creditors but the country still needs them.”

In short, non-government elites understood that toll revenues wouldn’t pay for the bridge project and no one thought the China Exim Bank would ever see their money back. So if China didn’t profit from the bridge, then why do the elites insist that there must be a profit-motive somewhere? That such a view has become prevalent has much to do with the reputation the Chinese has earned in Mozambique.

The Farm: Growing Mistrust

The elites’ skepticism of the bridge project as a bad investment decision wasn’t fortified overnight. It falls squarely in line with the general reputation that Chinese firms and entrepreneurs have earned in Mozambique. That is, they are generally viewed as profit-driven capitalists above all else. Such irony isn’t lost on elite Mozambicans, as one agribusiness expert noted that “for a communist country they are strictly capitalist in Africa.”

Chinese firms, state-owned or not, are noted for their hustling, profit-oriented business culture. In general, many sources point to Chinese firms’ propensity to eke out profits even in difficult environments and to not abide by Western labor practices. In labor-intensive industries like agriculture and construction, the perception among non-government elites tends to be that Chinese firms run a rigid and demanding workplace.

As an agribusiness consultant remarked about Chinese workers at a farm, “It’s good for the development of this country but it’s not very humane, it’s extremely long hours working very hard.”

Given their reputation for business acumen and profiteering, when Chinese firms make bad investment decisions, local elites find it difficult to believe that’s even possible. This is because they are usually convinced the Chinese firm must be profiting somehow and that these projects are only a “loss” on the face of it.

This pattern is illustrated by the Agricultural Testing and Development Center (ATDC) initiative that is meant to promote food security and raise agricultural yields by transferring Chinese technology and expertise across 23 African nations. Sponsored by China’s Ministry of Commerce and situated a couple hours outside of Maputo, the Mozambique ATDC was the very first that opened in 2012. It is essentially a public-private partnership (PPP) that hosts representatives from Chinese and Mozambican ministries, convenes research agronomists and Chinese state firms, and operates a commercial farm on a government land concession.

Source: Instituto de Investigação Agrária de Moçambique – IIAM.

Source: Instituto de Investigação Agrária de Moçambique – IIAM.

The PPP was intended to educate local farmers while making a healthy profit. But in practice, it has accomplished neither and was described by one management expert as “a scattered mess.” That’s because while Chinese companies had built the shiny new ATDC testing center out on the machamba and managed the transition to commercialization, the goals of the project remained murky.

Though the ATDC is officially considered development assistance, directives from the Chinese Ministry of Commerce emphasized profitability as the goal of the commercial farm project. The emphasis on profit seemed to have come at the expense of Chinese-led agricultural research and community outreach efforts. These goals confounded Mozambican government counterparts unaccustomed to working with a profit mindset and left many observers scratching their heads over what, exactly, was the point of this ATDC.

An observer familiar with the project said that “Mozambicans never had a clear perspective on what the goals of the Chinese were; it was clear what the donor’s role was, what the implementers were doing, but there was no clarity from the high-level Chinese counterparts.” The same source said research progress was slow and the diffusion of knowledge to the local communities was uneven—an observation reinforced in a UNDP report. It stated that although local farmers gained some valuable techniques, fewer than half returned to the ATDC after their first training session.

One of the main reasons the ATDC floundered was due to linguistic and cultural barriers, which participants at the model farm described as “immense.” Even after many years of operation, the farm didn’t have Chinese employees who could speak Portuguese comfortably and fluently. The lack of proper language skills created resentment on both sides and proved to be a productivity nightmare.

The Chinese government seems to be slowly recognizing the need to close the linguistic gap. It recently poured massive amounts of money into a Portuguese language training program based in Macau, a former Portuguese colony, and paid for an enormous Confucius Institute within Eduardo Mondlane University in Maputo. Although these efforts are likely aimed at growing relationships with Brazil and Portugal, it will of course have spillover effects for Chinese operations in Mozambique. But until those initiatives are fully realized, the reality remains that Mozambicans can’t easily work with and differentiate among the many Chinese firms in the country.

Perhaps the ATDC could learn from the success of private Chinese agribusiness Wanbao. The entity began as a PPP, with financing from the China-Africa Development Fund, but managed to set itself apart from the state-backed programs that birthed it through effective localization.

Wanbao now sells its rice under a Portuguese brand name, Bom Gosto, with packaging that features the logo rendered in the Latin alphabet. Over time, Mozambicans stopped associating Wanbao with the Chinese government and began accepting Wanbao as a local brand of rice. Consequently, Wanbao has become one of the largest and profitable rice-growing operations in Mozambique.

Source.

When it comes to the ATDC, sources say its failures largely stemmed from productivity challenges, language barriers, disorganization, and managerial incompetence rather than some nefarious Chinese land grab plot. As the classic saying goes, echoed by one China-Africa observer, “Never assign to conspiracy that which is easily explained by incompetence.”

Even though incompetence and the inability to work well with Mozambican counterparts are likely the real reasons that the ATDC fell apart, elites can’t seem to square that with the perception of profit-oriented Chinese firms with their hardscrabble business culture. This seems to result in confusion over the true motives of the Chinese as uber capitalists in Africa.

The Port: Capitalist Conspiracy and Corruption

That confusion over Chinese motives begets speculation, and speculation is but a stone’s throw from conspiracy. In the absence of clear motives from Chinese players or officialdom, conspiratorial murmurings among elites have filled the vacuum.

Yet at the same time, Mozambican elites by and large do not assign neocolonialism or debt trap narratives to Chinese motives. Instead, these conspiracies are of a more prosaic variety: Chinese capitalists are in cahoots with the government to profit off of each other.

This is exemplified by the commercial fishing port in the city of Beira in central Mozambique. The Chinese government provided $120 million in concessional aid financing for a complete overhaul of the Porto de Pesca in 2017, doubling its docking capacity and increasing its fisheries production by more than 200 times. It was promoted by the president’s office and the Chinese embassy as a hallmark of state-to-state cooperation, with the expectation of bringing new jobs and significantly expanding exports to Asian markets.

But after the announcement, coastal residents started taking note of the apparent influx of industrial fishing ships and regularly reported sightings of ships that flew the Chinese flag. On many occasions, ships bearing other Asian nations’ flags were being lumped in as Chinese ships on social media like Facebook and WhatsApp, giving rise to claims of fake news and doctored photographs. Still, the fixation had been entirely on Chinese flags, as commentators loudly complained that the government sold out the coastline to the Chinese, giving them free rein to “drain our oceans” for profit in exchange for the gleaming new port.

One of the photos circulated online raised alarm about Chinese fishing vessels. Various commenters debated the legitimacy of the photo.

The narrative about government greed enabling Chinese fishing vessels to overtake the still nascent Mozambican fishing industry quickly became commonplace. The irony is that had the government not touted China’s refurbishment of the port as yet another example of bilateral cooperation and aid, the elites may not be holding such cynical views toward China.

This “capitalist conspiracy” fundamentally stems from the entrenched perception of Chinese players as shrewd profiteers and highly transactional. So, the assumption goes, flashy Chinese projects in partnership with the government, while ostensibly financially insolvent, can’t possibly be taken at face value. That is, there must be some sort of backroom deal happening, whereby the Chinese play the same algo para ti, algo para mim” game of “mutual benefit” that Mozambican officials play.

Mozambicans on social media consistently link high-profile Chinese investments or concessional financing schemes to Chinese industries they consider unethical or extractive, implying that debt-forgiveness or low-cost financing is made in exchange for licenses and export arrangements. For example, elites on social media frequently debate which land concessions will be granted next in order to “pay” for a new port planned south of the capital.

Views on China are Really about Domestic Corruption

A major factor shaping elites’ views of Chinese presence is basically projecting how they feel about their own government onto China. Mozambicans are deeply cynical of their authorities, in part because corruption dominates the news and in part because corruption is part of daily life. For instance, high-profile corruption cases like that of former Finance Minister Manuel Chang have soured public opinion and triggered civil protests among the educated and activists, many of whom have taken to social media to create satirical memes.

Mozambique ranks near the bottom 10% on Transparency International’s Corruption Perceptions Index. Its composite score of 23 is low even by sub-Saharan African standards, where the regional average is 32 (only 10 African countries, many of which are currently engaged in widespread conflict, score lower than Mozambique). It is even below the average of other Southern African Development Community (SADC) countries (see Figure 5).

Figure 5. Mozambique Perceived as One of the Most Corrupt Among SADC Countries 

Source: Transparency International.

On the ground level, the country is rife with retail corruption. For instance, 35% of Mozambicans had to pay a bribe to use a public service in the past year, according to Afrobarometer, making it the second-worst in southern Africa by a comfortable margin (see Figure 6). One foreign executive remarked that he had to fabricate a role for his local partner’s brother just to deal with the various government agencies, inspectors, and their arbitrary fines.

Figure 6. Mozambique’s Bribery Rate Is Surpassed Only by the Democratic Republic of Congo

Source: Afrobarometer.

As one European expat in the telecom industry revealed, “The local guys with small- and medium-sized businesses, they have to pay twice, three times, three different bribes but the larger businesses…the ones run by foreigners can go straight to the top and only pay once.” The Afrobarometer report bears this out: while only 50% of Mozambicans think an average person can bribe their way out of taxes, business registration, or court, 66% think a rich person can. 

If going “straight to the top” means cooperating intimately with officials who can make or break deals, then Chinese firms have long invested in building diplomatic and political relationships. Because of these linkages with the Maputo government, Chinese enterprises of all stripes have come to be seen as guilty by association and “…will do what needs to get done.” Even popular WhatsApp memes single out the Chinese as more willing than the Portuguese to work with a hypothetically corrupt Mozambican.

Other foreign firms seem to be exempt from this impression, because they aren’t viewed as having cultivated a “symbiotic relationship” with the Mozambican government. So the elites’ view of China is governed by something of a unique political transitive property: our own government = corrupt; anyone who works with the government = corrupt; China works with the government, so China = corrupt, or at least willing to put up with corruption.

Conclusion: The New Rules of The Game

Non-government elites in Mozambique fully understand that many Chinese investments and projects are insolvent but they do not ascribe neocolonial or debt-trap motives to them. Knowing their government to be highly corrupt, the elites instead view the Chinese as investing in some areas in exchange for long-term profits that are out of the public’s eye.

Rampant speculation about Chinese motives has taken on its own conspiratorial logic, though it is more prosaic than nefarious. No one assumes that the commercial fishing port will soon become a base for the PLA Navy, but rather there must be some other commercial motive behind it. As one politically connected source put it, “It’s not that the Chinese are playing by different rules than the Americans and Europeans, they’re not even playing the same game.”

Even if the actions taken by Chinese firms have perfectly sound explanations, assigning ulterior motives bordering on conspiracy isn’t likely to die down. That’s because compared to regional peers, Mozambique seems out of step with the amount of money and political capital China has expended in the country. This leads to questioning of the value proposition for China being present in Mozambique in the first place—they must be getting deals on the side to be able to continue investing in the country, so goes the thinking.

Like it or not, some non-government elites have become resigned to China’s growing presence. Instead, they are adapting to what they perceive as the new rules and new reality for success in the country: exploring opportunities tied to China. Students at Mozambique’s best university, for example, explained that they enrolled in the new Confucius Institute instead of learning English because they believe the best-paying jobs in their country will require Mandarin in the near future. This is in part because after a decade of investing in the country, many agree that Chinese firms now occupy a privileged position.

A Mozambican professional who completed her degree in China said that being viewed as “doors” by Chinese coming to establish ventures in Africa is a valuable position to be in. On the other hand, she also held the common suspicion that pervades elites, saying that “FDI comes with its own agenda. They might say there are no strings attached but I always see strings.”

One of these strings that Mozambicans point to is that Chinese investment too often functions as a jobs program for Chinese workers. One Mozambican civil engineer expressed skepticism that public works financing would be made available if the government contracted a non-Chinese company and said it’s easier to land foreign clients than domestic ones because the major domestic projects almost always go to Chinese private and state firms. The Twitter posting below captures the broad sentiment well:

This has some interesting implications for US-Africa policy, which under the Trump administration has explicitly positioned itself in opposition to China’s presence. The Prosper Africa initiative announced in Maputo at the 2019 US-Africa Business Summit incentivizes American businesses to invest on the continent. However, the initiative’s $50 million pledge pales in comparison to Beijing’s promise of $60 billion.

China may carry a much larger checkbook when it comes to Mozambique, but its soft power remains weak among the non-government elites. This is a potential demographic the United States can integrate into its broader economic and political strategy on the continent. As Africa urbanizes and the population becomes more educated, winning political goodwill among the non-government elites can be an important part of competing with China in Africa. In other words, if the United States cannot adequately compete on building bridges and roads, then it should consider capitalizing on intangible areas where it is competitive.

For example, non-government elites are more likely to be good local partners and technical advisors, because they are not swayed only by dollars and cents. This can allow US companies and investments to operate relatively unfettered without much controversy.

Just take US energy giant Anadarko. It has invested in a massive $20 billion LNG project in northern Mozambique—the single largest project ever approved on the continent—yet Mozambicans pay much less attention to it, instead training their focus on much smaller Chinese endeavors. In short, US-backed projects assume a default level of legitimacy among elites that Chinese projects have to try very hard to earn.

But to meaningfully persuade non-government elites—the only high-information, political demographic in Mozambique likely to be receptive to US messages—Washington will likely need to shift its current narrative. Even as these elites are concerned about the cozy relationship between China and its government, they are also not persuaded by Washington’s explicitly political framing of China’s presence. The dire warnings about China in Africa tend to fall flat and do little to sway local sentiment in favor of the United States.

https://macropolo.org/analysis/china-mozambique-elite-perceptions/

August 29, 2019

Dear Pak, Kashmir Needs Solidarity – So Do ‘Missing’ Pakistanis


Dear Pak, Kashmir Needs Solidarity – So Do ‘Missing’ Pakistanis

TAHA SIDDIQUI

Today, on 30 August, the Pakistani government and the military will begin its first public solidarity campaign for Kashmir, themed at raising awareness about the revocation of the ‘special’ status the region enjoyed under India, and the subsequent lockdown in the valley.

On Monday, 26 August, Pakistan's Prime Minister Imran Khan announced that all Pakistanis would have to dedicate half an hour of their time every Friday to express solidarity with their Kashmiri brethren. Then, on Wednesday, the head of the Pakistan military's media wing, General Asif Ghafoor, said that in line with the government's announcement to observe 'Kashmir Hour', national anthems and sirens would blare across the country at noon on Friday.

30 August also marks the UN-recognised International Day of the Victims of Enforced Disappearances, which will be observed by the leading human rights organisations in Pakistan.


fbtw


Also Read : Kashmir Lockdown & Army ‘CALL’: How Lessons From 2008 Can Help

The Irony of Pakistan’s Kashmir Solidarity Campaign

While many Pakistanis have questioned the utility of such a move and what it may achieve – especially since Pakistan's failing economy currently needs people to work more rather than less – it also is ironic to mark such a day on 30 August.

30 August also marks the UN-recognised International Day of the Victims of Enforced Disappearances, which will be observed by the leading human rights organisations in Pakistan.

In the past, the Pakistani courts have pointed to the involvement of the Pakistan Army in ‘abducting’ the country’s citizens.


fbtw


The Human Rights Commission of Pakistan (HRCP) announced country-wide protests in several cities, including Islamabad, Lahore, Karachi and Quetta. The protests will advocate for the criminalising of enforced disappearances, recovering the missing persons, and holding those behind it accountable. HRCP says it will be tweeting with the hashtag #DhoondKarLao which roughly means ‘Find Them and Bring Them Back’, referring to those who have gone missing.

In the past, the Pakistani courts have pointed to the involvement of the Pakistan Army in ‘abducting’ the country's citizens on grounds of different suspicions, and then keeping them in custody for a considerable duration, sometimes even for years, instead of producing them in front of the courts. While thousands of Pakistanis have gone missing since the advent of this practice a few decades ago, it intensified under General Musharraf's dictatorship during the early 2000s. The Baloch were the most targeted, especially those accused of having nationalist sentiments living in Balochistan province, and elsewhere in Pakistan. The province has been conflict-ridden and facing an insurgency since Pakistan's independence in 1947.

Also Read : Why Pakistan Would Be Wise To Stay Out Of Kashmir Issue

Pakistan Military’s Expanding ‘Campaign of Abduction’ — With Impunity

But in recent years, human rights organisations in Pakistan say the military has expanded its ‘campaign of abduction’ and is now taking away people from mainstream Pakistan too, and for crimes less severe than before. For example, in recent years, Pakistanis who were critical of the military on social media, were taken away too. I also survived a similar kidnapping, and a possible assassination attempt in Islamabad in January 2018, allegedly carried out by the Pakistan Army. I had to subsequently go into exile to France with my family to stay alive. Till date, none of my perpetrators have been brought to book.

The Supreme Court of Pakistan, in 2011, even set up a commission to look into this phenomenon, called the Commission of Inquiry on Enforced Disappearances (CIED), which has around 2000 pending cases before it (although independent estimates put the number of missing persons between 10,000 to 20,000).

In such a scenario, where Pakistanis themselves are facing human rights abuses at the hands of its own military, expressing solidarity with the Kashmiris reflects nothing but double-standards.


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But the Commission has neither been effective in putting a stop to these abductions, nor making Pakistani authorities accountable, even though in some cases it has found the direct involvement of the Pakistani security and intelligence agencies. The UN Human Rights Committee, and the UN Working Group on Enforced or Involuntary Disappearances have also expressed concerns about the CIED's inefficacy.

Last year, during a Pakistani Senate committee hearing, when a legislator inquired if any action had been initiated against individuals who were thought to be involved in abducting people, the head of the CIEF, Justice Javed Iqbal, who was briefing the committee, said that action had been taken against 153 army personnel. Later, when the media pressed further about who these army officials were, no further information came to light, and the local media also went silent about the issue.

Also Read : Has Pakistan Lost the Kashmir Plot?

Pakistan PM’s U-Turn on ‘Enforced Disappearances’

Even Pakistani PM Imran Khan had spoken about enforced disappearances when he was not in power, stating categorically that “agencies are involved” in this practice, referring to the intelligence apparatus run by the Pakistan Army. “When I come to power, if agencies continue to abduct, I will resign,” he had said, in one interview.

It is important to show solidarity with Kashmir especially under the circumstances they are facing today, but without respect for human rights on the home turf, such ‘Kashmir Hour’ campaigns will be meaningless.


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Independent investigations have pointed to the existence of several secret military prisons across the country, where these missing persons are kept, incommunicado. They are tortured, and more often than not, don’t live to tell the tale. Mutilated bodies of such missing persons are then dumped near their homes, for their loved ones to discover. Some have also returned home, but have been too afraid to share their ordeals with the press, for fear of persecution.

Dear Pakistan, Charity Begins At Home

In such a scenario, where Pakistanis themselves are facing human rights abuses at the hands of its own military, asking them to express solidarity with the Kashmiris reflects nothing but the government’s double-standards.

Since the government's announcement for ‘Kashmir Hour’, many Pakistani celebrities like renowned cricketer Shahid Afridi and leading film industry names like Shaan Shahid, have taken to social media to call on Pakistanis to come out and support the initiative. However, these are same people who have remained silent on human rights abuses on their home turf.

But if Pakistanis really want India and the world to take their concerns for Kashmir seriously, then today they should join hands with those protesting outside different Pakistani press clubs against enforced disappearances, and ask for a just society — not just in Kashmir, but also at home. The people should also remind Imran Khan of his promises to criminalise enforced disappearances (even if few expect any real change after such a law is passed, given that earlier measures to stop this practice have failed too).

It is important to show solidarity with Kashmir, especially under the circumstances they are facing today, but without respect for human rights on the home turf, such ‘Kashmir Hour’ campaigns will be meaningless.

Also Read : While Kashmir Is ‘Under Control’, Trump Isn’t Going To Interfere

(Taha Siddiqui is an award-winning Pakistani journalist living in exile in Paris since February 2018 and is currently writing a book about Pakistan. He teaches journalism at SciencesPo and runs a digital platform calledsafenewsrooms.org, which documents censorship in the media. He tweets at@TahaSSiddiqui. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)