Realities which are coming to be obvious from the debts of local cities in the People’s Republic of China
This article is English translation of the Japanese version uploading on July 31, 2018.
Ａ．The groups unfinished skyscrapers in Tianjin
- On June 15, Reuters is reporting on the unfinished buildings groups in Tianjin City, “The rips in the economies of Tianjin are occurring.” In the cities and local cities of the People’s Republic of China, it is no wonder that there are unfinished building groups and roads, or facilities which were made for some use but not fulfilling their use. In their economic calculations, they are admirable goods and works-in-progress, and they may be wondering why we call them ghost towns. In fact, in our economic calculations, too, there are calculations which we sort like so as the completion constructions or unfinished constructions, product goods, parts, works-in-progress for buildings and goods, therefore their time scale is different, maybe. However, such rough calculations must be kept in their country alone. Their vision which they call “One Belt, One Road”, too, to put it simply, is the theory that expands from China to Central Asia and West Asia the theory which had been advocated by the former Prime Minister of Japan Tanaka Kakuei in 1972. And it was called “The Japan Islands Remodeling Theory”. Their intention is in infrastructure constructions which they make main force of them and making their profit. (If we express this with economic terms aesthetically, it is to gain the revitalization and ripple effects for regional economies through infrastructure constructions.) And, what kind of this real example is it, let’s take a small country, Sri Lanka which exists on the vision of “One Belt, One Road”. Sri Lanka built a port (Hambantota port) with a construction cost of approximately $ 1.3 billion. Its construction was financed by the People’s Republic of China with 85% of the construction cost (It is said that the annual interest is 6, 3%), and construction was carried out by the country-owned enterprise of the People’s Republic of China, ‘China Port and Harbor Process Public Corporation (zhōng/zhòng guó gǎng wān gōng chéng gōng sī 中国港湾工程公司)’. However, in repaying this loan, in the end, Sri Lanka signed a contract last year to lend out 80% of the stock of the port management company to company of the People’s Republic of China for 99 years at about $ 1.1 billion. Let’s call this the business of People’s Republic of China style. This is the methods that has not changed since ancient times, these are the methods themselves that vicious merchants subjugate the poor by peeling off the clothing of poor, squeeze poor earnings from the poor, degrade to the male and female servants, slaves, harlot. I may have been coming overestimated the People’s Republic of China. Even in this blog, before, I wrote as “The end of the socialism” but maybe that China did not even exist its socialism. Also, considering “One Belt, One Road”, AIIB (Asia Infrastructure Investment Bank) was established, but it seems like the pheromone of infrastructure construction led by the People’s Republic of China. And, as for the plan that the People’s Republic of China shows, its corresponding countries must be thoughtful enough. For example, in the case of trunk roads or railroad construction, the countries located on the way of the cities of the starting and ending points have to work with doing good judgment; what kind of plan is, and it can be really realized, who bears the construction cost of home country route, if constructions are financings, who will do the loan, its loan is fair or not. Otherwise, on the time axis of economic calculation in the People’s Republic of China, when the progress of construction depends on the section, the bridge and the iron bridge have completed in country A, however by the case of all routes, there may occur circumstances that say that the prospect of completion cannot make. In this case, if A country has a city that is a hub connecting Central Asia and West Asian cities, the completed bridge will be able to connect to those road networks and will be beneficial in those economic zones. If these bridges and iron bridges have built over the canyon, and if the operation of these bridges awaits completion of the construction section of another country B, how country A will be able to make the next step? Moreover, the line of country B has become the ‘Deadline’ which even the plan of construction cannot make by circumstances of country B. And the debt of infrastructure construction heavily has remained in country A. So what shall we do? Shall we apply for this bridge or iron bridge, to the future world heritage as the remains of the 21st century? Even if I write like this, this is not a satire. It can be predicted as a reality that actually happens. And there is a possibility that country A will be the second and third Sri Lanka. However, this result will satisfy the original intention of the leaders of the People’s Republic of China. They have further increased their ruling country by financing of construction fund and its long-term loan.
Ｂ．Proceeding of creditize (retention of claim right) to Chinese land by enterprises
- Today’s main subject is not “One Belt, One Road”. Let’s get back to the subject.
- Reuters writes.
ａ）Some country-owned enterprises in Tianjin are under debt default or they are being chased for raising of money for debt repayment.
ｂ）In the financial institutions, it is appearing some financial institutions which are refusing loans to local enterprises.
ｃ）This has been arising according as the Chinese government tightens high-risk loans and restrains bad loans.
ｄ）The finance affairs of Tianjin is getting worse due to the restraint of real estate investment.
ｅ）Tianjin has relied the debt interest payment which has caused by the construction boom on the income earned by the sale of the land use right.
ｆ）Local officials said the debt problem of Bang-hai (the name of the development project area in Tianjin City) is serious but it is possible to “solve” 40% of the debt by expanding the sale of the land.
- Reuters does not reveal the news source that said the sale of land in 2 – f) above. But what is spoken here is not limited to city in Tianjin, but in the People’s Republic of China, the retentions of claim (right) to land are proceeding by the enterprises, it is able to say that its situation will proceed further.