Alex Lo
SCMP Columnist
My Take
by Alex Lo
My Take
by Alex Lo

China’s dollar diplomacy preferable to West’s military interventions

  • France, the European Union and the US are withdrawing their failed military interventions from the African Sahel region and Afghanistan. China is stepping up, but it’s doing so with capital investment and developmental aid – and in the case of the Taliban, even diplomatic recognition – rather than bullets and bombs
For years, I have left my shares in Chalco for dead. Then suddenly, in recent weeks, stocks of the Aluminum Corporation of China have started going through the roof. It turns out the military coup in Guinea has a lot to do with it. Who would have guessed? It has been a most educational experience.

That is, actually, one reason I play the stock market, even though unlike cleverer investors, I usually lose money, either a lot or a little (which for me is a win). But when you have skin in the game, the connections between economics, corporate actions and geopolitics become so much more vivid. I know, I know, there must be a cheaper way to get a proper education, one that doesn’t threaten your retirement.

Bauxite, you see, is the raw material for alumina, which in turn is used to produce aluminium. Guinea is the second-largest producer of bauxite, accounting for 22 per cent of world production. The global market is supposedly unnerved by the coup, which could disrupt production, hence the price volatility that sent aluminium prices to a 10-year high. Somehow, I have doubts about that explanation.

The first priority of the coup plotters, I imagine, is to make sure production levels are maintained. Otherwise, what’s the point of staging a coup? You want to make sure the money flows into your pockets, instead of those of your former boss – that’s Military Coup 101. That’s why the Chinese are terribly unfazed, contrary to whatever you read in the international press about Chinese interests being exposed by the coup.

China’s appetite for Australian bauxite may climb after Guinea coup

It’s true that China has a major stake in the country’s bauxite and iron ore production, just like it has similar investments across the Sahel, the vast region south of the Sahara. But, it’s only money. Worse comes to worst, you lose some investments. Don’t believe the international media about China in Africa; you just get the wrong impression while your information is usually put out of context.

France has been by far the bigger investor, in blood and national prestige, both of which it is losing fast, in the region. In this, it has been a lot like the Americans in Afghanistan. The series of military takeovers in the Sahel – Chad, Mali and now Guinea – undermines the military-political calculus of Paris a lot more than it does Beijing. That’s why President Emmanuel Macron has announced an end to Operation Barkhane, a seven-year-old anti-terrorism operation and is drawing down French troops, across the Sahel.

The problem with France is that it still thinks the West African region, its former imperialist glory, is still its own backyard. To understand this geopolitical fetish, you will have to go back to Charles de Gaulle during the post-war years. A comparison of France’s and the European Union’s doomed efforts in the region with America’s in Afghanistan has been made, and it’s not idle.

Both involve Western powers trying to prop up weak, unstable and often corrupt governments to fight Islamic jihadist groups who are convinced, probably correctly, that time is on their side. Rising troop casualties and resentment, and dwindling public support at home have made any multi-year military campaign unsustainable.

Having long realised it lacks the resources like the Americans, France has at least managed to convince the rest of the EU to take part in what it has sold as military-political operations to combat terrorism, drug trafficking, smuggling, corruption and mass migration from northwestern Africa. More cynical observers have pointed out France’s own geopolitical objectives or obsessions.

So, as France, the EU and the United States are withdrawing from their imperial or liberal-interventionist ventures or whatever you care to call them, China is stepping into the vacuum. But it’s doing so with capital and developmental aid and investment, rather than bullets and bombs.

Some of those projects will pan out; others will fail. Some may benefit the locals, others or perhaps the same ones will end up lining the pockets of corrupt local political bosses or fanatical Islamic militants. Who knows? But it’s only money.

And if I were a dirt-poor local, it’s a lot better than having unmanned drones dropping bombs on my home and wiping out my wife and children. What’s the point of democracy when you can’t vote because you and your whole family are dead?