|PRC investment in African continent sky-rocketing, overtakes Asia as largest development market, trade partner with 2 million Chinese nationals living there.|
Posted by: LateForLunch ® |
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Now, this does embody some risk, mostly because they are not being permitted to build or maintain major military bases. So even if the locals decide to screw them on their debt payments or nationalize the Chinese holdings, the locals are not stupid enough to let the Chinese government bring in any sort of potentially destabilizing military forces.
So there is a significant risk that their investments will never be recouped. The corruption and brutality of sub-Saharan African nations is book.
Those nations which have invested in those places have often had to write them off because the governments were so unstable/transitory that any deals done with one, were cancelled by the subsequent ones.
Many Western banks have been shy about taking such risks with their money. China has a lot of cash, so they may feel that they can afford the risk since the return is potentially that they have a place to export excess population and a platform for building foreign "infrastructure" to harvest resources, money from outside their nation going forward into the next century.
Even though there has been a significant increase from China, I believe there is still as much or more investment in all areas by European/Russian/Japanese/U.S.-multinational firms - just not as large as China's.
When you are cash rich, I guess you feel like you can absorb more risk in your global investments.
Modified by LateForLunch at Tue, Dec 31, 2019, 20:33:42
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