On Aug. 6, US Senator Marco Rubio urged China to immediately and unconditionally release Sun Wenguang (孫文廣), a professor at Shandong University, who was arrested after commenting on Chinese President Xi Jinping’s (習近平) spending spree in Africa in an interview with Voice of America.
This is yet another example of free speech being suppressed, but what is it about this spending spree that cannot be talked about?
During a visit to South Africa late last month, Xi committed China to invest US$14.7 billion in the country, which shows how his “Chinese dream” means buying up the whole world.
This should be compared to the revelation in late June by Li Xiao (李曉), a professor of finance at the School of Economics at Jilin University in China’s Jilin Province, that 80 percent of China’s US$1.9 trillion net foreign exchange reserves — according to Li’s definition, total foreign exchange reserves minus foreign currency-denominated debt — is held by foreign-invested companies.
If this number is correct, China can only make immediate use of about US$380 billion of its more than US$3 trillion in foreign-exchange reserves.
With China spending about 4 percent of that amount in South Africa, it is perhaps not such a mystery that Sun called for an end to the spending spree, saying: “There are so many poor people in China, having problems attending school, making a living in their old age and getting medical care, issues that must be urgently resolved.”
Sun’s disappearance is a sign that the spending spree is unlikely to come to an end, because it is the foundation of China’s global geopolitical strategy. This is the source of China’s interest in suppressing Taiwan and no one will ever know if there are other interests involved.
However, in view of this trend, the only way that the spending spree will come to an end is if there is no more money to spend.
Perhaps it is not so strange, then, that Ernesto Pernia, director-general of the Philippines’ National Economic and Development Authority, last month announced that although the country’s president brought back an earmarked US$24 billion of Chinese foreign direct investment and overseas development aid from his 2016 visit to China, the Philippines has only managed to strike a loan agreement with China over an irrigation project of US$73 million and inaugurated two bridges in Manila funded by China worth US$75 million — less than 1 percent of the earmarked amount.
This is a sign that money is running out and that China has entered a “post-spending spree” period; that is why this issue cannot be talked about.
Why has China entered this post-spending spree period? There are domestic, as well as international reasons, but in the end it is a matter of weakening economic momentum: Capital is no longer accumulating; it is even shrinking.
In 2015, JPMorgan Chase & Co estimated that exports to China made up about 40 percent of Taiwan’s total exports. Is Taiwan prepared for the arrival of the post-spending spree period? This is a question that Taiwan needs to tackle head-on.
Shih Ya-hsuan is an associate professor of geography at National Kaohsiung Normal University.
Translated by Perry Svensson
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