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Saturday, 21 October 04:10 (GMT -05:00)



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China Invests Heavily In Africa


You probably know that has been investing in a number of countries of strategical importance. There is a lot of African countries on the list. According to several observers, Chinese banks have given such countries over 77 billion euros since 2000.

 

 

 

 
Not so long ago, there was a documentary broadcast on the national TV. The documentary is about a railway line in Kenya built by China Road and Bridge Corporation. It praises Chinese engineers and tells the viewer that the Chinese government is ready to support African countries on their way to economic growth.
 
Back in 1975, China built the first railway line in Africa connecting Tanzania and Zambia. The construction cost was around 450 million euros. Those funds were given as an interest-free loan by China.
 
In 40 years, the construction investments increased, and the new line opened on May 31st, cost around 3.2 billion euros. The line happened to be 5 times as expensive as any European peer. The launch took place 4 months after the launch of a similar railway line in Ethiopia. It cost 4 billion euros, which is roughly 25% of Ethiopia’s national budget. Even on favorable terms, servicing this debt promises to be rather challenging for the African state.
 
As for the 77 billion euros of endless loans to African states since 2000, most of them are paid off by shipping various commodities, which keep on decreasing in price. Almost 100% of the crude oil produced by Angola is used to pay off the debt to China, which is around 20 billion dollars. At this point, the country’s currency reserve is nearly exhausted, which means the country is about to go bankrupt.
 
The IMF predicts 2,6% and 3,5% economic growth in Africa for 2017 and 2018 respectively. After economically disastrous year of 2016, some growth is expected in Nigeria and South Africa. However, the experts doubt that the growth will exceed 1%, and they are afraid of the possibility of higher inflation and national debt.
 
Chinese Finance Big-Scale Projects In Africa
 
The World Bank is concerned that the cost of the Chinese investments in Africa is too high. In Kenya, for example, China Exim Bank sponsored 90% of the construction of a new railway line, even without tenders. Another important thing to note is that China is Kenya’s biggest lender. It holds 50% of the country’s external debt. The local government believes that the new railway line will help them to increase the national GDB by 1,5% and pay off the entire debt to China within the next 4 years. However, some of the local experts think this is unreal since Kenya’s external debt has nearly tripled over the last 3 years. With that being said, the only way out for the government is to raise taxes since it’s pointless to expect economic growth in the near future.
 
At the same time, the countries of Central Africa have virtually found themselves swimming in cash as China is manipulating those investments. Rich African banks can demand to pay off the loans or ease them at any minute.  South African economy, for example, is totally dependent on China. Other countries are Mozambique, Zambia, Angola and many others. As for Kenya, this country has a certain advantage since it’s a part of the so-called Chinese Silk Road, which is why the credit line for Kenya is literally unlimited.
 

 

The bottom line is that China has big plans when it comes to Africa. However, the Chinese government has stopped being the key component of the phenomenon. For African states, China is the key to opportunities. For them, it’s neither bad, nor good, some experts believe. For example, China makes up for 28% of the total investment in the African oil industry. Ethiopia and Kenya are the biggest winners when it comes to those financial opportunities.

 

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Referendum In Catalonia May Hit Europe Harder Than Brexit

The possibility of Catalonia exiting from Spain is dangerous to the integrity of the European Union, even more dangerous than the Brexit. This is what The Daily Telegraph thinks on the matter.

 

Publication date: 01 October 04:58 AM

Trump Announced Revolutionary Tax Cuts for Americans

On Wednesday, September 27th, President Trump announced a tax reform. The thing is that Donald trump promised this tax reform when making his election pledges in 2016.

Publication date: 29 September 07:51 AM

What is so precious about Ukraine for international investors? An American businessman shares his opinion

More and more international investors have been paying attention to Ukraine as a promising area for profitable investing. Cody Shirk, an American entrepreneur, traveler and investor, is now urging international investors to look at Ukraine as a country with really great investment potential, Market Leader reports.

Publication date: 27 September 03:16 AM

China’s Debt Bubble May Trigger Another Global Financial Crisis

The Chinese economy keeps on slowing down as China’s debt bubble is growing. International experts are concerned about that. They are afraid of a new global financial crisis, Market Leader reports. The thing is, the Chinese economy is not growing fast enough anymore. Beijing has to admit the economic slowdown. The entire international expert community is now closely watching this slowdown and expressing their concerns about China’s economic prospects amid the mentioned economic slowdown and inflating debt bubble.

Publication date: 25 September 12:44 PM

Why Is German Parliamentary Election Important to Europe?

Judging by the results of several sociological surveys, the chances of electing Angela Markel for the next 4 years is fairly high at the moment. Even though there is almost no intrigue in the election, the international community has still been closely watching it, Market Leader reports

Publication date: 24 September 12:55 AM

Bitcoin Market Cap Exceeds $150 Billion

Bitcoin’s market capitalization exceeded $150 billion the other day. At the same time, the international expert community keeps on pondering upon the near-term prospects of Bitcoin and other digital currencies.

Publication date: 03 September 11:22 PM

American Sanctions Will Cut Investments In Russia

Some experts say that the next round of anti-Russian sanctions imposed a couple of weeks ago is going to undermine the Russian economy. In particular, they are threatening the investment capital inflow.

 

 
A few weeks after Donald Trump reluctantly signed the new sanctions approved by the U.S. Congress, Russian and foreign investors are still trying to figure out what the actual consequences of this decision are going to be. For now, they seem to have understood enough to be afraid of long-term negative consequences for their existing or potential investments in the Russian economy, which has just started recovering after a 2-year recession.
 
Publication date: 31 August 01:44 AM

New U.S. Sanctions Against Russia Will Result In Geopolitical Changes

Political expert Lilia Shevtsova commented on the new sanctions against Russia imposed by the United States. She claims that the geopolitical situation in the world is going to change in the near future due to the sanctions.

 

She claims that introducing those sanctions was like a surgery. As the result of this surgery, the USA got rid of a foreign body. After that, Washington is probably going to reset their foreign policy. However, nobody can definitely say what exactly this event is going to result in. But one thing is sure – something is definitely going to change in the world order, and this creates certain threats for Russia.

Publication date: 28 August 03:32 AM

New Sanctions Against Russia Will Last Long

Russian political expert Leonid Shvets commented on the new round of anti-Russian sanctions. For starters, he claims that Russia has already turned into America’s biggest enemy. The thing is that the new law signed by Donald Trump not so long ago is designed to fight America’s enemies with the help of sanctions. North Korea and Iran are also on the same list.

 

 
Publication date: 28 August 01:02 AM

New Sanctions Will Hit Putin Personally, Piotrovskiy Says

This time, American sanctions are going to hit even Vladimir Putin himself, Andrey Piotrovskiy says. He says that the devil is in the detail. The thing is that the new sanctions approved by the U.S. Congress and signed by Donald Trump (even though he was against those sanctions), obliges the U.S. financial intelligence to provide the Congress with the information on all the known and probable assets belonging to the all the high-ranking Russian politicians, including Russian President Vladimir Putin. With that being said, it’s not accidental, that Putin is mentioned several times in the document.
 
Publication date: 27 August 11:35 AM