China loans $4 billion to Dominican Republic

$4 Billion Buys China a New Friend

Only a few days ago Taiwan counted the Dominican Republic as one of just 19 nations that recognise the island as an independent country.

Neither the US or Australia have been bold enough to take that step. Though the Holy See has.

But China has been busy wooing Taiwan’s friends away. And the Dominican Republic caved in to China’s ‘soft diplomacy’ this week. This came in the form of a US$3 billion (AU$4 billion) low interest loan to fund much needed infrastructure in the impoverished country.

Cash in hand, the Dominican Republic announced they will no longer recognise Taiwan.

Needless to say, Taiwan’s government is less than pleased. They’d pledged US$35 million of support themselves, but China outspent them. By almost 1,000%.

You can see how a small, poor nation like the Dominican Republic could be swayed by the sight of US$3 billion. But its government should be careful what they wish for.

Just ask Sri Lanka.

Chinese loans to Sri Lanka have begun to pile up. As Bloomberg notes, ‘China’s Belt-and-Road Billions Come With a Cost’:

The country [Sri Lanka] now spends 80 percent of government revenues paying down what Prime Minister Ranil Wickremesinghe has called “unprecedented” debts. Last year, Wickremesinghe — who took office after Rajapaksa lost the presidency — sold the port to a Chinese firm for $1.1 billion to ease the debt burden.’

In the 21st Century, the saying ‘Beware of Greeks bearing gifts’ may need to be amended.

PS: If you think your cash is safe in the bank…think again. Find out what you could do to protect your cash and financial privacy here.

Bernd Struben

Bernd Struben

Bernd Struben is the lead editor at The Australian Tribune. Bernd makes use of his extensive network to bring you the top stories you need to know about each day. Stories the mainstream may miss. Or bury somewhere you’re unlikely to ever read them. Bernd studied aerospace engineering and journalism at the University of Michigan, before graduating with a degree in economics. Over the past two decades he’s worked in media, management, and finance in the US, the Caribbean, Europe, and Australia. His other role, as the editor of the Port Phillip Insider, puts him in a unique position to read Australia’s most exclusive financial advice. Some of which he shares with readers of The Australian Tribune for free.
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  1. Whilst OT on this subject, of great relevance to the planets future
    A major element behind China’s sea floor grab in the South and East China Seas
    http://www.popsci.com.au/robots/industrial-robots/and-now-a-ship-that-can-mine-39000-tons-of-ore-from-a-mile-under-water,490046
    // Home // Robots // Industrial Robots
    And now, a ship that can mine 39,000 tons of ore from a mile under water
    Last month in China, the Mawei Shipyards launched the Deep Sea Nautilus, the world’s first ship designed for mining deepwater seabeds.
    The Deep Sea Nautilus is a 745-foot-long megaship capable of carrying 39,000 tons of ore—plus a 200-person crew and deep-sea mining robots. Nautilus Minerals, which owns the ship, plans to start gold and copper mining in the Solwara I, a mile-deep site in the coastal waters of Papua New Guinea.
    Nautilus Minerals is a Canadian company with an ambitious deep-sea mining plan, centered around high-tech underwater robots that wouldn’t look totally out of place in Star Wars. This February the company successfully tested its line-up of three robots at depths of 1,500 meters, or about 0.93 miles, or about 4900 feet.

    Two robots are purpose-built for preparing and pulverizing the metal rich seabed; a third robot will mix the pulverized ore into a slurry, to be pumped up to the Deep Sea Nautilus for further processing.
    Tongling Nonferrous Metals Group, a Chinese copper company, will be the first buyer of Nautilus Minerals’ ore. This kind of purchase further indicates ambitions for large-scale deep-sea operations by Chinese firms. Chinese mining companies already hold three mining licenses in the Pacific Ocean from the International Seabed Authority, while railroad equipment maker China Railroad Corporation purchased Soil Mechanics Dynamic, a leading manufacturer of underwater mining and construction equipment.

    On April 20, the Qianlong III dove to depths of 3,900 meters—or about 2.4 miles—to investigate the seabed and deep-sea wildlife.

    Xinhua

    China’s deep-sea mining would enable the nation to maintain sovereign control over strategic resources like copper and rare earth minerals. Activities in international waters would also extend Chinese commercial presence in the global commons as well as further solidify Chinese claims to waters in the East and South China Seas. And, of course, the vast amount of oceangraphic data gathered by deep sea mining could prove useful to military operations like submarine and anti-submarine warfare.

    What could go wrong, the consequences are potentially catastrophic for the marine environment and ultimately for us