The Chinese Economic Strategy

Chinese strategy has evolved over the years. They have silently strengthened themselves economically, making the world reliant on them for manufacture of every type of commodity from electronics and apparel to medicare and engineering. Tempted with their cheap pricing, every country in the world has either outsourced their manufacturing, or purchased Chinese goods extensively. This has helped them accumulate billions, maybe trillions, of dollars of foreign exchange reserves.

China has used this foreign exchange in a calculated and strategic manner. They have invested in developing countries across the world, by lending them money for infrastructure projects, ports, dams, etc. These countries, who do not qualify for loans from banking agencies due to their inability to pay back, remain loyal to China. Due to the gestation period of these ‘China-invested’ projects and their long payback tenure, these projects quickly become unviable and threaten the country’s economic stability. China once again steps in as the good guy, and writes off these loans, in exchange for ‘additional benefits’. The additional benefit includes use of their ports, establishment of military base, research and development facilities, factories, etc. The country, having been saved from a possible bankruptcy, is indebted to China and readily agrees. This has happened in Asia and Africa.

This is an ‘economic war’ that China is waging over the world, by smoothly entering countries with their permission and mushrooming their presence across the world.