Norwegian Airlines is now more Chinese than Norwegian 🤦
Luckily, the sword has been replaced by foreign investments
Hello and happy Friday 🥳
It’s been a long month, but France finally got the green light yesterday to open up… #thatfeeling
As I read about the seemingly never-ending drama with Huawei, involving China, Canada, the US, Norway and many other countries, I was inspired to write about modern day colonisation. It’s easy to think of colonisation as a medieval legacy, but in fact, it’s still ongoing. Scroll down to learn how China uses increasing economic power to dominate 👇
Favourite links of the week 🖇️
LISTEN 🎧 Spotify has launched Harry Potter At Home, where Daniel Radcliff and other actors are reading Harry Potter and the Philosopher’s Stone from their homes. We can literally hear them flipping pages and cars passing through their neighbourhoods. It’s an intimate and truly magical experience 🧙♂️
WATCH 📺 Netflix just launched a new TV-series, History 101, bite-size history lessons on anything from fast food and the space race, to the rise of China. It’s highly recommended if you want to get a little bit smarter in a short amount of time.
Norwegian Airlines is now more Chinese than Norwegian
For more than 1,400 years, the Roman Empire colonised Europe with the sword. Its emperors sought increased power and influence using armed soldiers and brute force, and would kill anyone who refused to become part of their empire. Today, less blood is spilled and soldiers play a smaller role, but colonisation continues—through foreign direct investment.
What’s going on? 🤔
Last year, the US forbade all American companies to sell to Huawei, a Chinese provider of smartphones and mobile-network infrastructure. Similarly, Norway didn’t award a nationwide 5G-contract to Huawei. The Norwegian Police Security Service (PST) advised against doing so, as the company has close ties to the Chinese Government. The US, Norway and many other countries worry that China will spy on their citizens 🕵️ They are protecting themselves against invasive investments.
We’ve recently seen how China increased its influence through investments in foreign companies. When the Covid-19 lockdown happened, the indebted Norwegian Airlines saw their revenue plummet, which disabled them from paying their creditors. Their only solution was to convert debt into shares. In other words, companies who had lent Norwegian Airlines money converted the loans into ownership.
Guess what! One of the main creditors was Chinese, and Norwegian Airlines is now more Chinese than Norwegian 🤦
China has used its growing economy to become the world’s biggest creditor, having lent about $1.5 trillion dollars to more than 150 countries. Big parts of the global economy is fuelled by Chinese credit, but it’s not just charity—being the biggest lender, renders significant political power.
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How do invasive investments impact us? 💡
African countries account for 25% of member states in the UN. Most of them are also indebted to China. Their already poor economies are crippled even more, as they pay interest on loans. China can leverage this position politically. For example, there’s nothing stopping them from cancelling some of their debts in exchange for favourable votes in the UN. Worst case scenario, China could directly sway the vote of a quarter of the UN.
Large debts also mean considerable interest payments. Countries such as Sri Lanka and the Republic of Congo have debt exceeding 25% of their GDP. That means 25% of their economy leaves the country, instead of being used locally to improve schools and roads.
Profits leaving the country and tax payer money used to pay down foreign debt lead to a vicious cycle; indebted countries are crippled from improving the lives of their citizens, and the lenders solidify their domination.
What’s the better approach? 🤝
China isn’t bad or evil—as every other country, they want to protect their people and improve their economy. China suffered greatly during the 20th century from multiple wars and tyrannical governments. Now, they’ve done a tremendous job at lifting people out of poverty. Between 2000 and 2012, the share of people in the middle class grew from 4% to 68%. Still, we can’t allow them to influence our countries’ sovereignty through aggressive investments.
There’s no easy answer to this problem. Some suggest wiping out national debts, but what stops the same countries to spin back into old habits? Some suggest forbidding trade with Chinese companies, but this approach leads to hostility and tension.
My view on this topic is similar to that on the ongoing China-US trade war; instead of retracting behind our borders and forbidding trade with foreign companies, we should engage in discourse and diplomacy 🤝 In danger of sounding naïve, I believe there is mutual ground between China, Norway, Sri Lanka and the rest of the world, where China can invest in foreign businesses without interfering in other nations’ sovereignty. For example, trade agreements could ensure that foreign investors are obliged to reinvest some of the profits in the local community.
The world has become global 🌎✈️ China is the most important trading partner to the West, and there is no reason to believe that’s going to change. Trade deals have never been perfect, but they’re the best approach to reconciling countries’ interests and avoiding domination by the largest players.
The Roman emperors were effective at expanding their empire, and its citizens benefited greatly from its vast power and influence. Colonisation never ceased, and the past 40 years, Chinese citizens have seen their lives and wealth improve dramatically. Luckily, the sword has been replaced by foreign investments—but we have to be alert so China doesn’t become the new Rome.
Thanks for tuning in this week! To wrap it all up, I’ve added a little personal touch this week: here’s me holding a delicious pizza that my beautiful wife made 😋
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