Beware of Chinese bearing gifts

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Since taking over the Presidency of the European Union on July 1st 2019, Finland has surprisingly found themselves receiving a great deal of attention from China in the form of delegation visits and official invitations. The high level representatives from Beijing, and their communist leaders, have not turned up empty handed either, arriving with gifts of offers of investments and “capitalist partnerships”. They have come baring offers of funding for infrastructure projects, contingent on the use of imported Chinese construction worker, and offers to buy up hectares of forestland, thus allowing China to capitalise on large sources for wood, which is essential for China’s growth.

The Finnish people recently learned, to their surprise, that a Chinese consortium has proposed the use of Finnish government loans to finance the construction of a tunnel between Helsinki and Tallinn, the capital of Estonia. The Talsinki tunnel project is the dream of every Finn, as their Baltic neighbour is the only foreign country with some semblance of a shared language. It is a kind of tourist’s paradise, a second home where the cost of living is “cheaper”. The Talsinki tunnel would be more than 80km long, forming a “sea serpent” across the Gulf of Finland. It has been promised by generations of Finnish politicians, especially since the tragedy of 1994 in which an Estonian ferry sunk on the same route killing 852 people. But this is a very expensive project, amounting to several billion Euro. The Chinese have taken advantage of this long outstanding ambition and plan to turn a dream into a reality. However, this dream could very quickly become a nightmare – the Chinese never invest without nefarious strings attached and the historical reputation of Chinese construction projects often being rushed and made to subpar standards should make any partner concerned.

Finland must pay attention to lessons learned the hard way by other countries. The small republic of Kyrgyzstan, in Central Asia is a good example. This former Soviet republic, bordering on China’s Xinjiang region, has been the focus of a power struggle between Moscow and Beijing since the fall of the USSR. Kyrgyzstan has increasingly become a Chinese colony, a fact that Westerners have avoided acknowledging, as they are blinded by their anti-Russian obsession. But recently, a scandal was reported that shed light on the troubling behaviour of Beijing and its pattern of manipulating neighbouring countries. When deciding what to do about an old Soviet-style power station that supplied the majority of the Kyrgyzstan’s power, and which was in urgent need of being replaced, the Bishek authorities awarded the contract to the Chinese company TBEA Co Ltd. The formerly named Tebian Electric Apparatus, (TBEA) is a Chinese manufacturer of power transformers and other electrical equipment. This firm had no notable experience in the energy sector but was still chosen over a well-known Russian company already operating in Kyrgyzstan. TBEA quickly built a power plant that, only a few months after its inauguration, broke down and left the majority of the population without heating for an entire winter.

As it turned out, Kyrgyzstan is amongst the most democratic countries in the region, and their opposition party was able to create of a new parliamentary commission to investigate this case. The conclusions of this commission have only recently been released. The conclusions shed some much needed light on the influence and priorities of Beijing in this matter. It was the Chinese ambassador had insisted upon the selection of TBEA, the rushed timeline for the construction project, and the dismissal of safety precautions in return for loans for the construction. The reason for the rush was to quickly accomplish a prestigious milestone for the famous “new silk road”. Bribes were paid to local politicians, including former Prime Minister Sapar Isakov, who signed the contract, and who has now been imprisoned on charges of corruption. It has been shown that the Russian company’s offer, which was favoured by local engineers, was much more detailed, not only technically, but also financially.

By conducting some simple internet research, Finland can carry out its own due diligence and find other similar case studies – Montenegro’s road to nowhere which had to be stopped after the first 41 km were already completed. This was because Montenegro’s debt rose and forced the government to raise taxes, partially freeze public sector wages and end a benefit for mothers to get its finances in order. Kenya’s railway, built and financed by China, which connects Nairobi to the port city of Mombasa, was grossly overpriced at $3.2bn, three times more than the industry standard. Other countries, such as Sri Lanka, Pakistan, Maldives, Djibouti and Mongolia, have found themselves dictated to and manipulated by China’s sharp power and corrupting influence and so heavily weighed down by debt that they are forced to either suspend projects mid way or seek loan renegotiations.

The Oxford Review of Economic Policy highlights that over half of China’s infrastructure projects are under-performing, damaging rather than fuelling growth and leaving an enormous debt burden for the domestic economy. A report on EU-China ties published by the European Council on Foreign Relations in December 2017 concluded there was “no doubt that the 16+1 is part of a broad ‘divide and rule’ practice” referring to China’s increasing influence in the Western Balkans and beyond.

Finland will make its own choices but should consider its proverbs wisely “Ei kaikki ole kultaa mikä kiiltää eikä kaikki ole hopeata mikä hohtaa.” – Not all that shines is gold, nor all that glows is silver.

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