China's Crumbling Economy is Collapsing! Real Reason China's World Domination Plan Failed

The Philippines and Italy have withdrawn from the Belt and Road Initiative (BRI), indicating the project's collapse. One of the biggest backers of the BRI was Italy, the only G7 nation to take part in the initiative.

Nov 27, 2023 - 15:51 Updated: Nov 27, 2023 - 15:53

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China's Crumbling Economy is Collapsing! Real Reason China's World Domination Plan Failed

The Belt and Road Initiative (BRI) is collapsing, with the Philippines and Italy abandoning the project. Italy, the only G7 country to participate in the BRI, was one of the project's most significant supporters. However, Italy's decision to leave the initiative will have a cascading effect that will crush the CCP's hopes and dreams of becoming the world's dominant force. The initiative was doomed to fail long before Italy left because other nations had discovered the CCP's dark intentions and began actively sabotaging it before the CCP had a chance to seize power.

Italy had always had economic ties with China, and in the 1980s, Prime Minister Romano Pra served as president of the country's Institute for Industrial Reconstruction. He led an enormous trade delegation to China, encouraging collaboration in various fields. Italy was worried that if it stayed outside the BRI, it would miss out on economic opportunities and run the risk of having its company stolen by other countries. By joining the BRI, Railways Italy sought to address the imbalance in trade between China and Italy. However, after four years, Italy realized that Britain was not as powerful as the CCP had said and that the BRI served as a means for China to support its economy at the expense of other nations.

China's Belt and Road Initiative (BR) was launched in 2013 as part of the Belt and Road Initiative, a massive infrastructure plan aimed at expanding China's global influence. The initiative was initially referred to as One Belt and one road, but it was later renamed to B. The initiative aimed to provide over one trillion dollars to over 100 countries, most of which were impoverished and struggling. China controlled key resources such as gold, silver, and oil and was in charge of Taiwan's gold and silver mines, Pakistan's ports, and Shanka's Hant Toto Port.

However, loans are not always beneficial, as they can lead to economic disaster if the project fails. The World Bank attaches conditions to loans it extends to developing nations, ensuring that the funds are used responsibly and that it makes sense to allocate them to specific initiatives. This helps reduce corruption and misinvestments from these loans, which can lead to further economic problems.

The World Bank has been cautious in providing loans to developing nations, as it has shown little concern for the viability of the projects it funds. However, the initiative has raised concerns about the potential for corruption and misinvestments, as seen in the case of Sri Lanka's Hont Too Port project.

China's loans to developing countries were intended to exert influence on their governments rather than boost economic growth. Politicians with the ability to make decisions for the nation, influence public opinion in favour of China, and advance China's agenda internationally would disburse loans without oversight, allowing recipients to use the money to win elections and maintain their positions of power. This was evident in the construction of the HTO port near the hometown of former President Raza, which caused Sri Lanka's economy to collapse due to corruption. However, the Chinese Communist Party (CCP) does not care about how these loans are spent as long as politicians refuse to meet with Chinese officials.

China has also influenced leaders in African nations by employing similar strategies, such as establishing a military facility in Ethiopia and constructing the African Union's headquarters in Ethiopia. However, many of these projects turn into unproductive sectors of the economy, leaving emerging nations saddled with paying the costs. The main cause of these failures is that there is no market for these services, and the loans supporting them drain funds from the local budget due to interest and debt repayment. This has become a terrible scenario for several nations, leaving governments obligated to use their money to repay these debts rather than putting them back into productive endeavors.

China's loan arrangements have harsh repayment requirements, with interest rates as high as 7% and a short repayment period of 15 years. Many financially distressed nations defaulted on their loans, leading to economic blackmail by the Chinese Communist Party (CCP). China then developed a remedy by taking over resource mines or leasing important ports, extending the loan for more time. When countries failed to pay for the theft, China demanded that nations cease acknowledging Taiwan as a separate entity and support China's policy in crucial UN votes.

In 2021, Lithuania asked Taiwan to open an office under the name Taiwan and establish a diplomatic presence there. The CCP initially outlawed all imports and exports to Lithuania, but this had little effect. In December 2021, Beijing began putting further pressure on international businesses to cease doing business with Lithuania. This unofficial, secondary sanction increased the financial burden on local Lithuanian businesses.

China's aggressive lending practices have led to a high rate of default in many nations, with China often extending extra loans to keep nations afloat. Between 2019 and the end of 2021, Beijing approved rescue loans totaling $104 billion, nearly twice as much as China's global bailout funding for the preceding two decades.

China's aggressive lending practices have led to countries like Pakistan and India facing financial crises, with China impeded in negotiations to restructure debts. The country's foreign debt has increased by about 50% to $100 billion since 2015, with Chinese lenders holding the lion's share of the loan.

The Paris Club, a group of major creditors, has invited China to negotiate debt for struggling countries. However, China has consistently refused to cooperate with other creditors to assist financially troubled nations. The CCP, the largest bilateral lender, is now requesting that others help China recover. Zambia, for example, has approximately $bn in external debt, with China accounting for about $6 billion. The IMF and Zomia have agreed to a support agreement, but China refuses to budge on conditions, making debt restructuring in Zambia unfeasible.

World powers have taken action to thwart the CCP's objectives, such as the International Development Finance Corporation (IDFC), the European Union's Global Gateway, and India's own investment fund. The US initiated the Build Back, Better World (B3W) initiative in 2021 to provide low-interest loans to developing nations to finance global infrastructure projects. However, the BTW program's value-driven methodology, prioritizing quality loans over quantity, has been damaging to values and has not been able to compete with China's trade.

The US launched the Initiative for Global Infrastructure and Investment (PG2) in 2022, aiming to raise $200 billion and $600 billion with other G7 members by 2027. The business sector will need to provide the majority of the money.

The G7 is investing in Africa to close the infrastructural gap and increase its influence. The US and its allies are also recognizing the potential of developing nations, particularly those in Africa. The US is strengthening bilateral commercial ties with the Prospera Africa Initiative and investing in infrastructure through PG2. The private sector's support will help the US in its competition with China. Other countries, including India, the UAE, Singapore, and the EU, are also interested in making investments in Africa.

The European Union introduced the Global Gateway Investment Charter in response to China's Belt and Road Initiative. The initiative aims to support emerging nations by creating digital networks for infrastructure and transportation. The EU plans to allocate a maximum of 300 billion euros towards its worldwide initiative until 2012, with 150 billion euros designated for African nations.

However, the European Union's initiative has faced criticism for being a publicity gimmick. China's investment is much larger than 300 billion euros, and Europe's initiative focuses on sustainability and eco-friendly energy options. The Kenya standard-gauge railway project failed due to inadequate planning and implementation, and the European Union has an advantage over building minor hydropower facilities in Nigeria and a solar energy facility in Djibouti.

In conclusion, the G7, US, EU, and other nations are making investments in Africa to close the infrastructural gap and increase their influence.

China's Belt and Road Initiative (BRI) is a significant investment project that has been gaining attention in Europe due to its potential to connect the Indian Ocean to the Red Sea. However, the EU faces challenges in funding these projects due to its bureaucratic nature and the wide range of political beliefs within the EU.

India, a key opponent of the CCP, has been working to counter China's efforts to restrict its access to the region. China has constructed pipelines, obtained long-term port leases, and established a military installation at Jibuti to control the strait. This strategic military advantage has led to concerns about India's economic interests and the potential for conflict.

India has formed its own coalition, known as the Necklace of Diamonds, to encircle China and strengthen ties with strategically located nations. In 2018, India collaborated with Indonesia and Singapore to gain access to their naval stations in Changi and Sabang, which increased India's impact and availability of pure mala. Additionally, India gained access to the port of Dukum in Oman in 2018.

In conclusion, while the EU faces challenges in funding these projects, India has been working to protect its economic interests and strengthen its ties with strategically located nations.

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