Thursday, November 4, 2010

Insert Dragon Cliche Here - China's New Colonies

The Dragon's talons extend into Europe! The East is Red - Eastern Europe that is! Chairman Mao's Magic Wok Hits Sofia! Pun-laden stereotypes aside, China's presence in Eastern Europe is steadily growing. Also, I could have had a glorious career as tabloid headlines writer. Sigh...

China has now (as I have been predicting for ages. Well, two months anyway!) seriously begun to take advantage of the economic chaos still gripping the economics of the Western world, by using the hunger among European and North American economies for hard cash to snap up some cut-price investments. The Asia Times reports on China's growing business interests in Eastern Europe, with Great Wall Motors establishing a factory in Bulgaria, while Huawei and ZTE are heavily involved in the strategicly sensitive upgrade of the country's telecommunications network. Interestingly, Bulgaria has a corporate tax rate of 10%. So if the EU does push our tax rate up from 12.5%, Ireland is really in trouble.

True, like any tabloid hack I may have overstated the case by claiming that Bulgaria and its ilk east of the Carpathians are now colonies of China. After all, this is only economic engagement; yellow stars on a red background do not yet fly over Sofia, no Xia class subs patrol the Black Sea, and no J-11's roar of runways near Bucharest. But is such a thing possible?

Judging from China's engagement in the "Developing World" (to use what I believe is now the PC term) military engagement can follow economic investment. has a great post on the so-called "String of Pearls", China's system of naval bases throughout the Indian Ocean (not to be confused with a "Chinese pearl necklace", which is very different, and only allowed in some "nightclubs" in Hong Kong). It is important to remember that these facilities have tended to go hand-in-hand with infrastructure developments in the countries concerned, for example Hambantota, which represents both a commercial investment by China in Sri Lanka, and the development of a PRC military presence in the country.

But, and let's not be politically correct here, these are all poor countries that China is investing in, right? No rich, Western country would be so desperate for cash as to open its gates to that kind of investment! Oh by the way, did I tell you that Ireland's bond yields today are at 7.68%?

It's certainly something to bear in mind as Ireland slowly goes broke; just what will we be desperate enough to do if and when the ECB cuts off our funding? Could we see considerable Chinese investment in Ireland's economy, and what military strings would come attached to the commercial goodies concerned? What would a cash-strapped, hard-pressed US be able to do about a Chinese military presence in Europe (alright, maybe not Ireland, but possibly in Eastern Europe)? After all, Chinese bases in Europe (especially Western Europe) would be an awesome comeback for that whole Opium War thing.

Suprisingly, China failed to see the funny side.
Have I gone mad? Probably. Or do I really see a Xia class out there in the Irish Sea?

Oh my God! The sea view from Dalkey is, like, totally ruined!


  1. Nah, I think that's just the HMS Triumph run aground off the coast of Ireland now...

  2. Oh you Americans! Just because you win your independence from someone, then "SAVE THEIR ASSES IN DUBYA DUBYA TOO" you think you can tease them mercilessly. Well, you can, so please continue.

  3. Hehe.

    It should be said I'm an equal opportunity teaser, hence my tirade against American beer :)

  4. Yes indeed, you are the soul of diplomacy. The new breed of American warrior!