This is a good critical analysis, but I don’t think it’s entirely fair.
China are absolutely dominating on the world stage because they’ve played western countries at their own game, and are utterly beating them. It won’t really be in a practical position to be a serious anti- imperialist force until it exceeds western powers on its own feet, which it is some years away from yet.
China is doing far more to help third world countries than the odd euro-currency investment. But dominating the western currencies as well as your own gives you enormous global influence, whereas converting to solely yuan may keep them wealthy and independent, but have less stranglehold on the west.
For context 15 billion CFA Franc = 25 million USD. At a state level for China its literally nothing, probably couldn’t buy a couple of Mcmansions in any Chinese T1 these days. Its pennies and as you said perfectly on a imperialist backed currency.
If there is any silver lining perhaps it should be taken not at face value but as a sign of possible future cooperation and bigger loans/investments.
If that wasn’t the intention they would have considered @shipwreck@hexbear.net 's points before hand.
The problem is currency swapping, China effectively put more money into circulation in their economy and assuming a standard capitalist economy that leads to inflation etc. As that money circulates, some of it will sit on banks, may earn interest which will have to be paid in that currency etc.
It obviously isn’t a malicious act, it just that China can’t realy understand or act outside the current mainstream economic principles or perhaps they simply thought this wouldn’t be an issue.
Its entirely possible both countries agreed a currency which the borrower has easier access to is better, perhaps that was even Burkina Faso’s request we don’t know.
I think the best solution would’ve been for China to directly build whatever is necessary through its own funds and hand over the project once its finished. It would still create local currency(local economy would be involved) but not a massive cash injection, they would repay via direct trading instead.
In the end if Burkina Faso may request to pay in yuan, doubt it though, mainstream economics is omnipresent.
deleted by creator
This is a good critical analysis, but I don’t think it’s entirely fair.
China are absolutely dominating on the world stage because they’ve played western countries at their own game, and are utterly beating them. It won’t really be in a practical position to be a serious anti- imperialist force until it exceeds western powers on its own feet, which it is some years away from yet.
China is doing far more to help third world countries than the odd euro-currency investment. But dominating the western currencies as well as your own gives you enormous global influence, whereas converting to solely yuan may keep them wealthy and independent, but have less stranglehold on the west.
deleted by creator
For context 15 billion CFA Franc = 25 million USD. At a state level for China its literally nothing, probably couldn’t buy a couple of Mcmansions in any Chinese T1 these days. Its pennies and as you said perfectly on a imperialist backed currency.
If there is any silver lining perhaps it should be taken not at face value but as a sign of possible future cooperation and bigger loans/investments.
deleted by creator
Does China have to demand repayment in USD or CFA Francs?
If that wasn’t the intention they would have considered @shipwreck@hexbear.net 's points before hand.
The problem is currency swapping, China effectively put more money into circulation in their economy and assuming a standard capitalist economy that leads to inflation etc. As that money circulates, some of it will sit on banks, may earn interest which will have to be paid in that currency etc.
It obviously isn’t a malicious act, it just that China can’t realy understand or act outside the current mainstream economic principles or perhaps they simply thought this wouldn’t be an issue. Its entirely possible both countries agreed a currency which the borrower has easier access to is better, perhaps that was even Burkina Faso’s request we don’t know.
I think the best solution would’ve been for China to directly build whatever is necessary through its own funds and hand over the project once its finished. It would still create local currency(local economy would be involved) but not a massive cash injection, they would repay via direct trading instead.
In the end if Burkina Faso may request to pay in yuan, doubt it though, mainstream economics is omnipresent.
Good post
Join the BRIC and tell western creditors to piss off.
Unrelated, but I wanted to ask you, since I’ve seen you mention this before. In MMT, how does taxation reduce the money supply?