The Weekly Pigeon (September 9, 2018)

9-9 Brief

Debt-trap diplomacy in Africa?

This Monday, President Xi pledged another $60 billion package in aid, investment, and loans to Africa at the Forum on China-Africa Cooperation. Additionally, President Xi suggested that the debt of the poorest nations may be written off, lending credence to Senegal’s President Macky Sall’s statement that “Everything we do with China is perfectly under control, including on the financial and debt side.” Nonetheless, there are still suspicions that China will abuse the “asymmetry of power in the negotiations of the transactions” and ultimately undermine African development.

Retrenchment in Chinese overseas investment?

This Wednesday, Reuters reported that Chinese conglomerate Dalian Wanda is seeking to reduce its stake in cinema operator AMC. It is unclear whether this move is economically driven or government compelled. As of the end of Q1 2018, Chinese outbound investment still appeared set to grow, suggesting there will not be a sudden stop in Chinese investment flows. However, the impact of potential US investment restrictions is difficult to forecast as trade war tensions continue to escalate.

Education crisis in China’s cities?

Education, especially in China’s first-tier cities, presents hidden costs that weigh heavily on the minds and wallets of parents. Perhaps as a consequence, online education is growing in popularity and market size. The unique education situation in China can be attributed at least in part to China’s culture, as mothers are willing to undergo cesarean sections to give their children an advantage against academic competitors.

 

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