China bribes and corrupts developing countries to extract key resources to fuel its explosive growth

by Ezequiel Doiny
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Professor Alan Brinkley described General MacArthur’s will to attack China and Truman’s reluctance during the Korean War “On June 24, 1950, the armies of communist North Korea swept across their southern border and invaded the pro-Western half of the Korean peninsula to the south. Within days, they had occupied much of South Korea, including Seoul, its capital.  

“…The Truman administration responded quickly to the invasion…On June 30, the United States ordered its own ground forces into Korea, and Truman appointed General Douglas  MacArthur to command the overwhelmingly American UN  operations there.

“…After a surprise American invasion at Inchon in September had routed the North Korean forces from the south and sent them fleeing back across the 38th parallel, Truman gave MacArthur permission to pursue the communists into their own territory. His aim, as an American-sponsored UN  resolution proclaimed in October, was to create “a unified,  independent and democratic Korea.” 

“…For several weeks, MacArthur’s invasion of North Korea proceeded smoothly. On October 19, the capital, Pyongyang,  fell to the UN forces. Victory seemed near—until the new communist government of China, alarmed by the movement of American forces toward its border, intervened. By  November 4, eight divisions of the Chinese army had entered the war. The UN offensive stalled and then collapsed.  Through December 1950, outnumbered American forces fought a bitter, losing battle against the Chinese divisions,  retreating at almost every juncture. Within weeks, communist forces had pushed the Americans back below the 38th  parallel once again and had captured the South Korean capital of Seoul a second time. By mid-January 1951 the rout had ceased; and by March the UN armies had managed to regain much of the territory they had recently lost, taking back  Seoul and pushing the communists north of the 38th parallel once more.

“…From the start, Truman was determined to avoid a direct conflict with China, which he feared might lead to a new world war. Once China entered the war, he began seeking a  negotiated solution to the struggle, and for the next two years he insisted that there be no wider war. But he faced a  formidable opponent in General MacArthur, who resisted any limits on his military discretion. The United States was fighting the Chinese, he argued. It should therefore attack  China itself, if not through an actual invasion, then at least by bombing communist forces massing north of the Chinese border. In March 1951, MacArthur indicated his unhappiness in a public letter to House Republican leader Joseph W.  Martin that concluded: “There is no substitute for victory.”

Brinkley, Alan. American History: Connecting with the Past Vol 2 (p. 745). McGraw-Hill Higher Education

Truman did not listen to General MacArthur and fired him for his insistence on the need to attack China but today we can see that General MacArthur was right. The consequences of Truman’s inaction are catastrophic:

1. China has reportedly assisted both Pakistan and North Korea with their nuclear weapons program. 

2. Vietnam: How many lives could have been saved during the Vietnam war if Truman had attacked China during the Korean War?

Chen Jian wrote in the Cambridge University Press website “The Vietnam War was an international conflict. Not only were the Americans engaged in large-scale military operations in a land far away from their own, but the two major Communist powers, China and the Soviet Union were also deeply involved. In the case of China, scholars have long assumed that Beijing played an important role in supporting Hanoi’s efforts to fight the United States.”

2. China would not have been able to continue its occupation of Tibet if Truman had attacked China during the Korean War.

In 1949, China invaded Tibet and initiated a massive transfer of Chinese civilians into Tibet.

In his 5-point peace plan the Dalai Lama stated:

“When the newly formed People’s Republic of China invaded Tibet in 1949/50, it created a new source of conflict.  This was highlighted when, following the Tibetan national uprising against the Chinese and my flight to India in 1959, tensions between China and India escalated into the border war in 1962.  Today large numbers of troops are again massed on both sides of the Himalayan border and tension is once more dangerously high.

“The real issue, of course, is not the Indo-Tibetan border demarcation.  It is China’s illegal occupation of Tibet, which has given it direct access to the Indian subcontinent.  The Chinese authorities have attempted to confuse the issue by claiming that Tibet has always been a part of China.  This is untrue.  Tibet was a fully independent state when the People’s Liberation Army invaded the country in 1949/50…

“To improve relations between the Tibetan people and the Chinese, the first requirement is the creation of trust.  After the holocaust of the last decades in which over one million Tibetans – one-sixth of the population – lost their lives and at least as many lingered in prison camps because of their religious beliefs and love of freedom, only a withdrawal of Chinese troops could start a genuine process of reconciliation.  The vast occupation force in Tibet is a daily reminder to the Tibetans of the oppression and suffering they have all experienced.  A troop withdrawal would be an essential signal that in the future a meaningful relationship might be established with the Chinese, based on friendship and trust…

“The massive transfer of Chinese civilians into Tibet in violation of the Fourth Geneva Convention (1949) threatens the very existence of the Tibetans as a distinct people.”

“Today, in the whole of Tibet 7.5 million Chinese settlers have already been sent, outnumbering the Tibetan population of 6 million. In central and western Tibet, now referred to by the Chinese as the “Tibet Autonomous Region,”

“Chinese sources admit the 1.9 million Tibetans already constitute a minority of the region’s population. These numbers do not take the estimated 300,000-500,000 troops in Tibet into account – 250,000 of them in the so-called Tibet Autonomous Region…For the Tibetans to survive as a people, it is imperative that the population transfer is stopped and Chinese settlers return to China. Otherwise, Tibetans will soon be no more than a tourist attraction and relic of a noble past…

“Human rights violations in Tibet are among the most serious in the world.  Discrimination is practiced in Tibet under a policy of “apartheid” which the Chinese call “segregation and assimilation”.  Tibetans are, at best, second-class citizens in their own country.  Deprived of all basic democratic rights and freedoms, they exist under a colonial administration in which all real power is wielded by Chinese officials of the Communist Party and the army.

“Although the Chinese government allows Tibetans to rebuild some Buddhist monasteries and to worship in them, it still forbids serious study and teaching of religion.  Only a small number of people, approved by the Communist Party, are permitted to join the monasteries.

“While Tibetans in exile exercise their democratic rights under a constitution promulgated by me in 1963, thousands of our countrymen suffer in prisons and labour camps in Tibet for their religious or political convictions… ”

Truman had an opportunity to stop China during the Korean war, because of Truman’s inaction China assisted North Korea and Pakistan’s nuclear programs and brought much suffering and destruction to Tibet. Because of Truman’s inaction now China, the evil Communist regime that oppresses its own people is on its way to making real its strategic goal to “surpass and replace the United States as the world’s premier superpower.”

In August 2016 Andrew Miller wrote in the Trumpet “Americans think in four-year election cycles. Chinese leaders think in terms of centuries. Just leaf through the glossy, cream-colored, gold-flecked pages of The Governance of China. This anthology of political theories by Chinese President Xi Jinping is considered almost sacred scripture in Beijing.

“Across 18 chapters about leading the most populous nation on the planet, Xi outlines his utopian vision for the Chinese people. In the world he describes, the Chinese are heirs to an ancient and unique civilization entitled to a privileged position among nations. In this world, China is an economic, cultural and military superpower, while the United States is no longer a major geopolitical power.

“If the Chinese people dutifully follow the program their paramount leader has laid out in The Governance of China, Xi promises they can achieve what he terms the China Dream by the year 2049—exactly one century after the founding of the People’s Republic of China during the Chinese Communist Revolution.

“Achieving the China Dream has become a trademark slogan of Xi’s administration since he first publicly uttered the phrase in a November 2012 speech. When Xi refers to the China Dream, however, he isn’t making empty political promises like so many Westerners assume. He is actually making a subtle reference to a geopolitical strategy. Nationalist hawks in the Chinese military have been pushing this strategy since the days of Chairman Mao Zedong.

“In a book actually titled The China Dream, People’s Liberation Army (pla) Col. Liu Mingfu outlines a strategy for China to On August 2016 Andrew Miller wrote in the Trumpet, “Americans think in four-year election cycles. Chinese leaders think in terms of centuries. Just leaf through the glossy, cream-colored, gold-flecked pages of The Governance of China. This anthology of political theories by Chinese President Xi Jinping is considered almost sacred scripture in Beijing.

“Across 18 chapters about leading the most populous nation on the planet, Xi outlines his utopian vision for the Chinese people. In the world he describes, the Chinese are heirs to an ancient and unique civilization entitled to a privileged position among nations. In this world, China is an economic, cultural and military superpower, while the United States is no longer a major geopolitical power.

“If the Chinese people dutifully follow the program their paramount leader has laid out in The Governance of China, Xi promises they can achieve what he terms the China Dream by the year 2049—exactly one century after the founding of the People’s Republic of China during the Chinese Communist Revolution.

“Achieving the China Dream has become a trademark slogan of Xi’s administration since he first publicly uttered the phrase in a November 2012 speech. When Xi refers to the China Dream, however, he isn’t making empty political promises like so many Westerners assume. He is actually making a subtle reference to a geopolitical strategy. Nationalist hawks in the Chinese military have been pushing this strategy since the days of Chairman Mao Zedong.

“In a book actually titled The China Dream, People’s Liberation Army (pla) Col. Liu Mingfu outlines a strategy for China to surpass and replace the United States as the world’s premier superpower. This book is a bestseller in China…”

China is succeeding in its strategy to surpass and replace the United States as the world’s premier superpower. This represents the beginning of the dark ages, a victory of tyranny over freedom.  

 Truman’s inaction against China during the Korean war made the World a much more dangerous place since China assisted both Pakistan and North Korea to obtain nuclear weapons; China consolidated its takeover of Tibet causing much suffering. Lives could have been saved in Vietnam if Truman had attacked China during the Korean War. Inaction has its price. 

On August 17, 2022 Judith Bergman wrote in the Gatestone Institute “China Is Winning the Economic Race with the US…The [Harvard Belfer Center] report, “The Great Economic Rivalry: China Vs. the US,” predicts that at the current rate China will overtake the US economically within a decade.  

“When it comes to trade, China has now displaced the US. “When this century began, China was knocking on the door of the WTO and the U.S. was the leading trading partner of most major economies. Today, China has overtaken the U.S. to become the largest trading partner for nearly every major nation… by 2018, 130 countries traded more with China than they did with the U.S…..” — The Belfer Report.  

“China’s trade policies are not a matter of simply creating more wealth for China, but as with most things that China does, a way to increase China’s power and other countries’ dependency on it.  

“Today, the U.S. is the world’s largest debtor; China is the largest creditor.  

“When it comes to manufacturing, China already displaced the US a decade ago.  “China is now the world’s largest manufacturer and exporter of scores of essential goods, including 90% of refined rare earth minerals, 80% of solar panels, 50% of computers, and 45% of electric vehicles.” — The Belfer Report.  

“Crucially, China is severely challenging the US when it comes to innovation…. In 2013, the US was the number one top innovating country, according to the Bloomberg Innovation Index, but by 2020, it was not even in the top 10, having fallen to number 11…. China’s laser-like focus on frontier technologies has positioned it to dominate races like 5G and AI in the future.

 “China is determined to see this development to its goal of becoming the dominant power in the world by 2049.  

“What this new world economic order means for the future is probably difficult to imagine for the many who have grown up with the US as the leading world power and the accompanying celebrated values of freedom, democracy, and capitalism, taken for granted by so many. 

“China’s economic rise and the US response — or lack of such — will determine the predominant values of the 21st century — will it be China’s authoritarianism and disregard for freedom, democracy, and human rights or those of the US and the West?”

China is succeeding in its strategy to surpass and replace the United States as the world’s premier superpower. How did we reach this point? 

To understand this it is important to observe how China uses bribes to corrupt countries that have the resources it needs to fuel its explosive growth.

On April 27, 2021 Børge Bakken & Jasmine Wang wrote in  Crime, Law and Social Change an article titled “The changing forms of corruption in China” in which they explain

“China’s famed growth has created a paradox of huge proportions that is associated with how this development could happen despite the well-documented issue of vast corruption. This growth has come through a specific form of corruption, changing from petty theft and speed money to grand theft and access money. The new forms of corruption were made possible through the access to assets like land, mines and State-Owned Enterprises (SOEs) after land-, property-, and SOE reforms that were implemented during the 1990s. The opaque character of these reforms has led to what can only be described as a climate of grand collusion where officials use their access powers to redistribute what was formerly state-owned assets to themselves and crony entrepreneurs. While the character of corruption has changed over the last decade, the problem has not diminished despite continued official “anti-corruption” campaigns…” 

On February 8, 2022 Vincent Tawiah, Jeleta Kebede and Anthony Kyi wrote in the Journal of Emerging Market Finance a paper titled “Corruption, Chinese Investment, and Trade: Evidence from Africa” in which they describe the effects of Chinese bribes in Africa “…We use data from a sample of 49 African countries between 2000 and 2018 to investigate how the level of corruption in these countries affects three important channels of economic engagement with China, namely: Foreign Direct Investment (FDI), trade, and construction… 

“Upon assuming office in 2013, China’s President, Xi Jinping, launched an anti-corruption campaign that was aimed at reducing the high levels of corruption that had bedeviled the country over the years. The campaign, among others, has resulted in strengthening the Central Commission on Discipline and Inspection (CCDI) and the investigation and arrest of public government officials who were, hitherto, considered untouchable (Chen & Kung, 2019). However, despite the widespread support for this campaign, some scholars cast doubt on its effectiveness. For example, it is mostly argued that the crackdown on corruption has largely been used as a tool to get rid of potential rivals, enforce loyalty and strengthen Xi Jinping’s hold on power (Shirk, 2018; Yuen, 2014). To date, whether and to what extent the anti-corruption campaign has altered the nature of China’s external engagement in the form of trade and investment remains largely unexplored as the impact has mostly focussed on internal outcomes at both macro and firm levels (Gan & Xu, 2019). Given that the campaign appears to assume more of a political dimension, we conjecture that the nature of China’s external financial engagement with African countries will not be altered by the campaign, especially when it involves a continent where China is more likely to be the biggest gainer…

“Prior studies suggest that China is in Africa to extract natural resources such as oil and gas to fuel its rapid industrialization (Kolstad & Wiig, 2012; Mourao, 2018). Hence, having a natural resource is likely to override the effect of corruption on any foreign investment and trade in Africa. In this section, we examine whether the existence of natural resources influences how China engages with African countries, given the level of corruption in the country. To do this, we introduce two additional variables into the model: Resource rent, which is a proxy for the amount of total resource rent as a percentage of GDP, was collected from world development indicators. We also include a moderation variable, which is a two-way interaction term between corruption and resource rent (resource × corruption). 

“… If the existence of natural resources influences the relationship between corruption and China’s financial engagement in Africa, then we expect the coefficient of the interaction variable “resource × corruption” to be significant.  The results on FDI, reported in columns 1–3 of Table 3, reveal an interesting finding. 

“The positive and significant effect of “resource × corruption” shows that the existence of natural resources overrides the cost of corruption on FDI inflow after the threshold level of total natural resource rent is reached.3 Hence, China invests in resource-rich countries with high perceived corruption. This is contrary to our baseline findings, where we find a negative relationship between corruption and FDI. This is because FDI in resource-rich countries is largely in the extraction of resources. Hence, paying bribes is a faster way to secure a license and gain access to the natural resource deposit than following long bureaucratic processes that are mostly met with resistance from the locals. In other words, corruption in resource-rich countries is a helping hand for securing licenses and gaining access to natural resources. The finding shows that after a threshold level of natural resource rent is reached, the transaction cost due to increased corruption is outweighed by the benefit of undertaking investment in the form of FDI, and hence, increasing Chinese investment in Africa.  The results, which are presented in columns 4–6 of Table 3, show that the interaction term (i.e., resource rent × corruption) significantly and positively affects trade under all the corruption measures. This implies that the impact of corruption on trade with China is more pronounced in resource-rich countries. Arguably, most trade with Africa involves the export of raw natural resources. And the extraction of these natural resources involves dealing with government officials and politicians. Therefore, it is intuitive to find a strong relationship between trade and corruption in resource-rich countries…”

China’s practices corrupt governments in countries which have resources they need to fuel Chinese explosive development, because of Chinese corruption multiple development countries fail to develop since their resources end up benefiting China instead of helping the local population. Chinese development is fueled by foreign exploitation.

In 2018 Johua Masey reported in the Heritage Foundation 

“Chinese President Xi Jinping’s official remarks during his recent tour of Senegal, Rwanda, South Africa, and Mauritius were replete with references to sincere friendship between China and Africa,1 In Senegal, Xi wrote of “good friends and partners who trust and help each other with sincerity.” In Rwanda, he spoke of how “China-Africa relations have always been defined by sincere friendship, unity and cooperation.” In South Africa, he wrote of his wish for the two countries to “stay forever as each other’s reliable good friend, good brother and good partner.”   

” …Beijing’s inaugural Africa policy paper unveiled in 2006 describes “sincerity, friendship and equality” as the first of four principles and objectives for China’s policy toward Africa.

“…The rhetoric, however, is inconsistent with the reality that Chinese government-owned or government-linked companies frequently use dishonest practices to gain a business advantage in Africa. 

“Given China’s control of its state-owned enterprises and influence over large private Chinese companies, it is likely that Beijing directs, encourages, or tolerates their corrupt behavior, thereby perpetuating a system of corruption in Africa that harms ordinary Africans. Until Beijing stops this practice, its rhetoric about friendship and wishing the best for African countries and their inhabitants will be insincere.  

“Understanding Chinese Corruption in Africa Corruption is often a key element of Chinese economic engagement overseas, including in Africa. 

“A 2017 survey found that 60 percent to 87 percent of Chinese firms polled in Africa admitted to paying a bribe to get a license.3

” …Chinese companies scored second-worst in Transparency International’s last Bribe Payers Index that measured perceptions of how likely companies from certain countries are to pay bribes abroad.4 

“…A recent study found that corruption in general increases around active Chinese aid project sites in Africa, likely because of the Chinese effect on norms.5 

“… Another study found that countries that are more corrupt attract greater non-concessional official Chinese financial flows than do less-corrupt countries; one likely explanation for the finding is that Chinese companies are comfortable playing the corruption game.6 

“…Reports of Chinese corruption in Africa are too numerous to comprehensively list in a short paper. Over the past 13 years, two of China’s biggest telecom companies, Huawei and ZTE, have been implicated in corruption scandals in at least 15 African countries.7 The countries are Algeria, Benin, Cameroon, Ethiopia, Gabon, Gambia, Ghana, Kenya, Liberia, Nigeria, South Africa, South Sudan, Uganda, Zambia, and Zimbabwe. 

“…In 2017, the U.S. arrested the emissary, Patrick Ho, of CEFC Energy Company—a multinational Chinese company linked to the Chinese Communist Party—for bribing officials in Chad and Uganda on behalf of CEFC and the state-owned China National Petroleum Corporation. A scandal erupted in 2008 in Namibia when a Chinese company helmed by then-Chinese President Hu Jintao’s son bribed Namibian officials to win a contract.  Chinese companies pay off officials at the highest levels of African governments. Patrick Ho offered inducements to the Chadian President and the now-Ugandan Foreign Minister. China Sonangol and the China International Fund bribed the Guinean Minister of Mines and Geology to steer mining contracts their way. One of the world’s largest steel companies, Shandong Iron and Steel, allegedly offered former Sierra Leonean President Ernest Bai Koroma a $150 million sweetener to transfer to it the rights to rich iron mines from another company.8 

“…Chinese corruption in Africa takes more forms than paying bribes to win contracts. The Namibian government spent two years investigating more than 30 Chinese companies operating in its country over concerns they were hiding illegal earnings. The investigation bagged four Chinese tycoons who reportedly ran a $300 million tax-fraud scheme. Chinese nationals and, allegedly, even Chinese diplomats,10…are frequently important players in the poaching rings devastating Africa’s wildlife, while Chinese companies and workers are notorious for frequently transgressing the environmental and labor standards of various African countries. As just one example, as many as two-thirds of Chinese boats fishing in West African waters do so illegally, rapidly depleting fishing stocks and costing West Africa an estimated $2 billion a year.11 

“…The Costs of Corruption 

“These companies’ practice of using corruption to gain an advantage in Africa further entrenches a system taking a tremendous toll on ordinary Africans. A 2002 African Union report estimated that corruption costs Africa $148 billion annually, about three times the amount the continent received in net overseas development assistance in 2015.12

” …Corruption correlates with state failure and conflict,13 …and children are five times more likely to drop out of primary school—and the infant mortality rate is nearly twice as high—in highly corrupt countries than in countries with little corruption.14

“…Such corruption gives Chinese companies an unfair advantage over competitors, and—since a fair bidding process is usually the best way to secure the most cost-efficient delivery of a project—robs Africans of receiving maximum return on the investment of public money paying for Chinese-built projects. Corruption also subverts governance that is accountable to the people, as bribed leaders become more responsive to their patrons than to their citizens.”

China is succeeding in its strategy to surpass and replace the United States as the world’s premier superpower. This represents the beginning of the dark ages, a victory of tyranny over freedom.

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