Chinese investment in Africa

Much of the Chinese investment in Africa is probably good for Africa, like some of the West's investment in the 3rd world. But the instances of over-charging for infrastructure development (such as the Railway the FT mentions) creates an indebtedness that is also reminiscent of the U.S. model, especially the IMF/world bank play book, as long as the debt to China is in RMB or USD. Debt in local fiat is far better for Africa, as it gives them the option of printing away (inflating) the debt, giving a fiat to China that China can only off-load by spending on things from that same country, employing it's people and businesses. The "inflating away" is not a a total cheat because China can use it to gain some control over that country's people. But it does motivate china to not make bad loans, motivating them to remain interested in the productive success of whatever the loans were for, so that the debt does not need to be inflated away.

Africa investment in USD is alternative to risky U.S. treasury debt. They have to offload excess USD from U.S-China trade imbalance. They can't buy U.S. stocks & real estate. To repay loans, Africa will give resources to China, exported on those same over-priced railways.

If most the money (RMB or USD) is spent on Chinese intellect or labor, they don't even lose the money "loaned"...it goes back to China....so the resources are obtained for the cost of the infrastructure in a way that keeps their trade surplus.

China is graduating 10x more engineers per year than U.S. and building about 10 tons per year per U.S. citizen in its infrastructure. If it continues to grow 3% per year faster than U.S. for the next 40 years (as I expect), that will be 1.03^40 = 3.2x bigger than it is now, compared to U.S. They are not likely to lose their empire edge as fast as Spain, U.K., and U.S. did in prior centuries because they really understand the economics and importance of protectionism better than we ever did. They will not let their manufacturing base slip away as easily as the U.S. did.

But even China is irrelevant compared to on-going rise of the machines.