
Contrasting the US’s severe urban decay with China’s extraordinary infrastructure development
In the following article, originally published in the Morning Star, Roger McKenzie contrasts the economic priorities of the US with those of China.
EMPIRES always end. All of them. The only question is about the nature of that end. We can see this before our eyes as the United States empire reaches its inevitable end, internationally and domestically.Reporting from Washington DC and New York City, and reflecting on the recent Friends of Socialist China delegation to China, he compares the level of investment in infrastructure in the two countries. A train journey between DC and NYC “revealed a picture of severe urban decay in supposedly the world’s most important and richest nation” – a reflection of the fact that, in the US, “the government, of any colour, prefers to spend immense amounts of money on the military as opposed to the people.”
The article continues:
The US is visibly decaying economically as well as politically, while China is clearly stable, able to act on behalf of the people and on the way up. The transport infrastructure, road, rail and airport systems in China have undergone a massive upgrades in length and quality over the last decade. This is a sentence you simply can’t apply to the US.
In the five cities I visited during my 10-day visit to China I never saw a single homeless person and felt entirely safe to walk the streets and speak with anyone I wanted. Nobody stopped me from doing any of those things. I never felt the same level of safety in DC — or New York for that matter.
Roger notes that the US could learn a great deal from China. If it were willing to adapt to a multipolar reality and give up on its dream of a New American Century, it could prioritise the needs of its people over those of the military-industrial complex. However, he warns that the current trajectory is towards leveraging the US’s military power to maintain its global dominance, even as its economic power wanes. “The temptation will be for the empire to strike back as its power crumbles. Unfortunately it is something I think we are already seeing in Ukraine and in its attempts to stoke up tensions in the breakaway Chinese province of Taiwan.”
The challenge for the left is therefore to build a powerful mass movement that combines the struggle for socialism at home with the struggle against imperialism and war.
Roger will be among the speakers at the upcoming webinar China proves that a new world is possible! on 16 June.
We can see it happening in front of our eyes if we choose to look. One of the advantages of travelling by train instead of flying is you get to see much more of the reality of a country.
The Acela Express train ride of 230 miles or so for three hours from New York City to the US capital, Washington DC, was depressing in so many ways.
The train itself was better and more comfortable than many I have travelled on in Britain, but the journey revealed a picture of severe urban decay in supposedly the world’s most important and richest nation.
You could see the wealth on the skyline represented by the skyscraper office blocks of the major cities we passed through — Philadelpia and Baltimore — but much of the rest was a picture of severe urban decay.
The industrial base of the country has been gutted. It reminded me of the train journey through the once thriving Black Country in Britain. Once a hive of industrial activity, now hollowed out with miles of left-to-rot former factories.
In the US the choice has clearly been made that the government, of any colour, prefers to spend immense amounts of money on the military as opposed to the people.
I can’t believe that the minority of the US population that actually bother to come out and vote don’t understand this. It’s no secret that the US spends by far the largest amount on the military of any country on Earth.
The US spends more on the military than China, Russia, India, Saudi Arabia, Britain, Germany, France and South Korea combined.
Between them China and Russia account for only around 13 per cent of the world’s military spend. Not the vast amounts the corporate media would have you believe.
But while content to project its power abroad, the US is crumbling. One visit to the vast and imposing US embassy in London will show you just how much the US is intent on projecting its power. To the US size really does matter.
The Romans, along with every other past empire, knew the importance of not just having the means to exercise power, but having the symbols and institutions that constantly remind everyone of this.
As I arrived in DC and left Union Station, everything looked amazing. As the cab left the station, the Capitol building, the scene of the Trump-inspired attempted coup on January 6 2021, peeked out above other buildings.
It acts as a symbol to remind you of what the main business of the city is — the gathering and exercise of power on behalf of capitalism.
A stone’s throw from Babylon Central (the White House) nestled the World Bank, which I didn’t know was actually a group of banks, and the International Monetary Fund. In many ways the three institutions that run the world.
The area, to be fair, was immaculate, as was much of the Georgetown area where I was staying — but not everywhere.
At the other end of Pennsylvania Avenue from the White House I saw makeshift campsites on waste ground that people on their way to the swanky shops and restaurants of Georgetown cannot fail to see. No doubt a fair number of these passers-by work at the White House or elsewhere for the administration of the day.
Of course homeless people living rough in a capital city isn’t peculiar to DC, but the fact that it’s so close to the seat of power of the empire is notable.
Last year there was a 39 per cent increase in crime in DC. Earlier on this year data showed an outbreak of armed carjackings, many carried out by desperate teenagers. Put all of this alongside crumbling road and rail infrastructure and a strong picture of decay is painted.
But it isn’t just economic decay. The inability of the (mis)leadership of both main political parties to pass any kind of meaningful legislation for the people, the blatant gerrymandering of voting areas, a political rather than legal Supreme Court makes the case for political decay.
The January 6 attempted coup three years ago illustrates the point better than anything I am able to write. The problem for the US is that few others believe in the power they attempt to project.
The global South is looking elsewhere because it is fed up with being bullied and told who they can and can’t have trade or political relations with. They are sick of having the real decisions about their economies taken by the troika on Pennsylvania Avenue.
One such country the US warns the global South off is China, the world’s other major economic and political superpower. The comparison between the US and China is startling.
I was in Beijing just a few weeks ago, so it is still fresh enough in my mind to be able to compare the two. In reality there is no comparison between the two capitals or, indeed, the two countries.
The US is visibly decaying economically as well as politically, while China is clearly stable, able to act on behalf of the people and on the way up. The transport infrastructure, road, rail and airport systems in China have undergone a massive upgrades in length and quality over the last decade. This is a sentence you simply can’t apply to the US.
Figures from 2022 show the length of China’s highways exceeded 109,982 miles. The length of the country’s high-speed railways expanded by an additional 27,961 miles. The country had some 254 civil airports in operation.
China is clearly a beacon for the rest of the world in understanding the importance of strong domestic infrastructure. The growth shows no sign of slowing.
In the five cities I visited during my 10-day visit to China I never saw a single homeless person and felt entirely safe to walk the streets and speak with anyone I wanted. Nobody stopped me from doing any of those things. I never felt the same level of safety in DC — or New York for that matter.
Making sure people have somewhere to live is also a priority in China. You notice the high-rise buildings on the outskirts of the major cities. The aesthetics of these buildings may not be to everyone’s tastes — it was fine by me — but I think people in China would take the fact that they have somewhere decent to live rather than the tents that I saw in DC.
Instead of warning about a non-existent economic collapse of China — mainly because of its failure to compete — the US needs to look to itself and its own economic priorities. The choice is a simple one. It can continue to prioritise spending money on projecting and using a power that nobody now believes in or it can decide to prioritise the good people of the US.
The temptation will be for the empire to strike back as its power crumbles. Unfortunately it is something I think we are already seeing in Ukraine and in its attempts to stoke up tensions in the breakaway Chinese province of Taiwan.
But it doesn’t have to be that way. The mainstream politicians, already bought and paid for by big business, will not make that choice without grassroots organising forcing them to do it.
The task for socialists of all persuasions is to build the united front that will be necessary to make this happen in the US and elsewhere.
https://socialistchina.org/2024/06/03/c ... velopment/

Breakthrough by Shanghai doctors uses stem cells to cure diabetes
The following article from China Daily reports on an extremely promising Chinese innovation in the treatment of diabetes: “Doctors in Shanghai have, for the first time in the world, cured a patient’s diabetes through the transplantation of pancreatic cells derived from stem cells.” The patient has been able to function normally without insulin injections for nearly three years.
Up to now, it has been possible to treat severe diabetes patients with pancreatic cell transplantation, but the shortage of donors and the complexity of the technology have meant that clinical needs are not currently being met. The doctors at Shanghai Changzheng Hospital have shown that it is possible to restore normal insulin production using pancreatic cells derived from the patient’s own stem cells – thus not requiring a donor. Yin Hao, director of the hospital’s Organ Transplant Center, commented: “Our technology has matured and it has pushed boundaries in the field of regenerative medicine for the treatment of diabetes.”
Timothy Kieffer, a professor in the department of cellular and physiological sciences at the University of British Columbia, Canada, is cited by South China Morning Post describing the study as “representing an important advance in the field of cell therapy for diabetes.” If the results of the Shanghai study can be reliably reproduced, “it can free patients from the burden of chronic medications, improve health and quality of life, and reduce healthcare expenditures”.
The funding sources for the study were the Chinese Academy of Science, the National Basic Research Program of China, the National Natural Science Foundation of China, the Science and Technology Commission of Shanghai Municipality, and the Shenkang Project. The study has been published in the journal Cell Discovery.[/quote]
Doctors in Shanghai have, for the first time in the world, cured a patient’s diabetes through the transplantation of pancreatic cells derived from stem cells.
The 59-year-old man, who had Type 2 diabetes for 25 years, has been completely weaned off insulin for 33 months, Shanghai Changzheng Hospital announced on Tuesday.
A paper about the medical breakthrough, achieved after more than a decade of endeavor by a team of doctors at the hospital, was published on the website of the journal Cell Discovery on April 30.
It is the first reported instance in the world of a case of diabetes with severely impaired pancreatic islet function being cured via stem cell-derived autologous, regenerative islet transplantation, the hospital said. The most common pancreatic islet cells produce insulin.
Diabetes poses a serious threat to human health. Medical experts said that poor blood sugar control over a long period can lead to severe complications, including blindness, kidney failure, cardiovascular and cerebrovascular complications, and amputation. Life-threatening situations may also occur due to hypoglycemic coma, and ketoacidosis, which happens when the body begins breaking down fat too quickly.
China is the country with the largest diabetic patient population. There are 140 million diabetes patients in the country, of whom about 40 million depend on lifelong insulin injections, according to the International Diabetes Federation.
Experts said severe diabetes patients struggling with blood sugar control can only be effectively treated by minimally invasive transplantation, which injects islet tissue extracted from the pancreas of a donor.
However, due to factors such as a severe shortage of donors and the complexity of the islet isolation technology, it is hard for such transplantation to meet current clinical needs. That made how to regenerate human pancreatic islet tissue on a large scale in vitro a worldwide academic focus, the team in Shanghai said.
Yin Hao, a leading researcher on the team and director of the hospital’s Organ Transplant Center, said they used the patient’s own peripheral blood mononuclear cells and reprogrammed them into autologous induced pluripotent stem cells. They used technology they devised to transform them into “seed cells” and reconstituted pancreatic islet tissue in an artificial environment.
“Our technology has matured and it has pushed boundaries in the field of regenerative medicine for the treatment of diabetes,” said Yin, whose team conducted the research with scientists from the Center for Excellence in Molecular Cell Science at the Chinese Academy of Sciences.
He said the patient, who was at serious risk of diabetes complications, had a kidney transplant in June 2017 but had lost most pancreatic islet function and relied on multiple insulin injections every day.
The patient received the transplantation in July 2021. Eleven weeks after the surgery, he was weaned off external insulin, and the dose of oral drugs for sugar-level control was gradually reduced and completely withdrawn one year later. “Follow-up examinations showed that the patient’s pancreatic islet function was effectively restored, and his renal function was within normal range,” Yin said. “Such results suggested that the treatment can avoid the progression of diabetic complications.”
https://socialistchina.org/2024/06/04/b ... -diabetes/

On China’s overcapacity
The article below, written for Friends of Socialist China by Shiran Illanperuma, addresses the latest ideological weapon in the Biden-Trump trade war against China: that of ‘overcapacity’. According to Western politicians and neoliberal economists, China’s industrial subsidies and production capacity are to blame for the US’s trade deficit and its apparent inability to reindustrialise its economy.
Shiran, citing fellow Marxist economist Michael Roberts, observes that the US and EU have sustained trade deficits since decades ago, before China’s emergence as an industrial superpower: “In a previous era, it was Japan and Germany that were the source of the US’s protracted trade deficits.” This rather suggests that “the main problem is the decline in the competitiveness and productive capabilities of the US itself rather than China’s (or, for that matter, anyone else’s) industrial policies.”
The article shows that China’s capacity utilisation and inventory levels almost exactly match those of the US. Hence, according to standard metrics, China is no more guilty of ‘overcapacity’ than the US itself. What is true is that China is actively working to contain excess capacity in mature industries such as coal and steel. However, in emerging technologies – particularly those required for solving the climate crisis – China is leveraging its socialist market economy to rapidly innovate and develop its productive forces. It should be noted that this strategy is responsible for a decrease in solar PV and wind energy costs of around 90 percent over the last decade. From the standpoint of maintaining a habitable Earth, the accusations of Chinese ‘overcapacity’ are beyond absurd.
Ultimately, what’s driving these accusations is that “Western imperialism is in crisis and can no longer sustain the position of its old labour aristocracy.”
The thesis of Chinese overcapacity therefore serves a dual purpose. First, it provides the Western ruling class with a means to deflect criticism of its own neoliberal policies in order to scapegoat China for the destruction of its industrial base. Second, it allows that same ruling class to resort to protectionism and subsidies on behalf of monopoly capitalists.
Shiran concludes:
For its part, China is developing technologies that are crucial for the future of mankind. It has done so while the ruling elite in the West gamble away wealth produced by workers through stock buybacks and real estate speculation. It is up to the Western Left to organise workers against imperialism and anti-China chauvinism, and to fight to liberate the productive forces necessary to address the socioeconomic and ecological challenges of this century.
Shiran Illanperuma is an independent journalist and researcher. He is currently reading for a master’s degree in economic policy at SOAS University of London.[/quote]
In the last few months, there has been an intensified campaign by Western politicians, academics, and mainstream media to popularise the narrative of “Chinese overcapacity.” Like the disproven narrative of the “Chinese debt trap” before it, this appears to be a coordinated attempt by the West to scapegoat China for structural problems and imbalances in the world capitalist economy.
The thesis of China’s manufacturing overcapacity has been in circulation since at least the global financial crisis. In short, the argument goes that China’s investment-driven growth model creates both local and global imbalances. It is argued that higher investment suppresses consumption (as a share of GDP) and drives income inequality and excess production capacity within China. It is further argued that such imbalances are to blame for China’s excessive exports and massive trade surplus, which is said to be at the cost of the United States’ trade deficit.
In academia, this argument has been popularised by Keynesian economist Michael Pettis, who is a Professor of Finance at Peking University. Brad Setser, a former senior advisor to the United States Trade Representative, has also been a champion of this argument. Notably, the overcapacity thesis has also been a consistent theme of the IMF on China.
In May, the IMF Mission to China published a report stating that in order to ensure growth, China’s key priorities should include “rebalancing the economy towards consumption by strengthening the social safety net, liberalising the services sector, and scaling back distortive supply side policies that support the manufacturing sector [emphasis added].”
The IMF is, of course, a Western-dominated institution, where China controls just 6% of voting shares despite contributing to 18% of global GDP.
The overcapacity thesis has been an increasing source of diplomatic tension. US Treasury Secretary Janet Yellen has attempted to rally the G7 on the issue and coax Global South countries such as India and Mexico into the debate. Meanwhile, European Commission President Ursula von der Leyen has argued that Chinese industrial policy is distorting the EU market for electric vehicles (EVs).
The Chinese side has reacted strongly to these allegations. Chinese President Xi Jinping said that there was no such thing as a Chinese overcapacity problem. Meanwhile, Chinese Ministry of Commerce spokesperson He Yadong has said that the accusation of Chinese overcapacity was a typical Western double standard. More recently, Chinese Foreign Ministry Spokesperson Wang Wenbin said, “Overcapacity is just a pretext the US uses to try to coerce G7 members into creating fences and restrictions for Chinese new energy products.”
Following in Trump’s footsteps, the Biden administration recently threw up a slew of new tariffs against Chinese products, including 25% on steel and aluminium, 50% on semiconductors, 50% on solar panels, and a whopping 100% on electric vehicles (EVs). As the US-led trade war against China intensifies, it is worth reflecting on the facts behind the overcapacity thesis.
Measuring China’s overcapacity
French entrepreneur and analyst Arnaud Bertrand has argued that the concept of overcapacity can be measured with a few standard metrics: 1. capacity utilisation rates; and 2. inventory levels.
In economics, capacity utilisation refers to the share of production capacity that is in use at any given time. Generally speaking, a prolonged period of high capacity utilisation can indicate a need to expand productive capacity. In contrast, a prolonged period of low capacity may indicate a need to reduce productive capacity. Bertrand points out that the capacity utilisation rate in China is 76%, which is around the same as in the United States, which is 78%.
Inventory levels are generally used as a measure of how well sales are doing. A growing inventory of goods might mean a combination of sluggish demand or overproduction, while a shrinking inventory might mean growing demand and underproduction. Bertrand points out that the finished good inventory index PMI for China stood at 49, while a similar index for manufacturing inventory for the United States stood at 50.
Neither of the above numbers suggests that China has any more overcapacity than the US. On the contrary, the fact that Chinese industrial profits continue to grow suggests that there is ready demand for Chinese manufactures. Several analysts have also argued that China’s drive to increase production capacity for new energy products makes it indispensable in the global fight for ecological sustainability.
Understanding consumption in China
Marxist economist and blogger Michael Roberts notes that while the proportion of household consumption to GDP in China may be low, absolute consumption has soared in the past few years. From 2008 to 2021, average annual private consumption grew by 8% in China, compared to just 5.7% in India, 1.7% in the United States, and 0.6% in the EU. Logically, China could never have lifted 800 million people out of poverty unless there was a substantial increase in their consumption!
Further, traditional statistics on consumption are misleading without taking into consideration the political and economic context. For example, in a situation where essential services are privatised, consumption figures may be misleadingly high due to households paying out of pocket for these services. In China, private consumption is supplemented by several social transfers in kind (including for healthcare, education, and food), which amount to up to 6% of GDP.
Finally, it should be noted that China has signalled that it does not seek to emulate the decadent and extravagant aspects of Western consumer societies. The turn to consumerism in the West has not staved off economic crises but rather led to an erosion in productive capabilities. By contrast, China’s emphasis on investment and productive consumption has helped it avoid major crises while improving the standard of living of its citizens.
China’s industrial production and the West’s trade deficit
Michael Roberts has also pointed out that the United States and European Union have had sustained trade deficits long before China’s industrial rise. In a previous era, it was Japan and Germany that were the source of the US’s protracted trade deficits. This is an important point, as it suggests that the main problem is the decline in the competitiveness and productive capabilities of the US itself rather than China’s (or, for that matter, anyone else’s) industrial policies.
While mainstream economists have often portrayed China’s rise as the result of “export-oriented industrialisation,” the facts are a little more complex. In China, exports as a share of GDP only rose above 20% between 2000 and 2016, the period immediately following China’s ascension to the WTO. In comparison, exports as a share of GDP comprise a much more significant 53% for Sweden, 51% for Germany, and 48% for South Korea, yet we never hear talk of their “overcapacity” distorting world trade in the mainstream media. Unlike China, these countries are US allies and fully integrated into US-led imperialist system and its military industrial complex.
China’s home market has always been a major basis for its development. It should be noted that even foreign companies operating out of China’s Special Economic Zones have been producing more for China’s home market than they do for export since at least 2005. According to research by Barry Naughton, an American economist who focuses on the Chinese economy, foreign companies in China sold 2.7 times more in the home market than they exported in 2017.
To use more contemporary examples, companies like Tesla and BYD have exported only 36% and 8% respectively of the EVs they manufacture in China, with the rest being sold in the home market. This in turn may be due to China’s superior infrastructure for EVs, which raises another point: investment in infrastructure is itself crucial for facilitating consumption.
China’s industrial policy
The question of overcapacity has been the subject of debate within academic circles in China. Lan Xiaohuan, a Professor of Economics at Fudan University, has discussed the issue in his recently published book How China Works: An Introduction to China’s State-led Economic Development. Lan concedes that overinvestment is a downside of China’s industrial policy, which encourages local governments to enact preferential policies for strategic sectors.
However, he explains that, within the framework of China’s socialist market economy, this strategy has certain benefits. First, overinvestment in strategic sectors leads to the rapid development of productive forces in that area. Second, the initial buildup of firms in strategic sectors leads to competitive price wars, which are beneficial to consumers. In that sense, high levels of investment are a feature and not a bug of China’s industrial policy, and stand in stark contrast to Western monopoly capital, which thrives on artificial scarcity.
Given the diplomatic backlash from the West as well as the contradictions inherent in a market economy, the Chinese government has indicated that it will take steps to curtail overcapacity. For example, a work report that was delivered at the 14th National People’s Congress in March had this to say: “We will strengthen coordination, planning, and investment guidance for key sectors to prevent overcapacity and poor-quality, redundant development.”
From the Chinese perspective, however, it is far more urgent to contain overcapacity in mature or maturing industries (such as coal, steel, and perhaps real estate) than in emerging technologies, where there is still massive global demand and much room for innovation. It is precisely this that threatens the West, as China’s socialist market economy allows it to rapidly build up its productive forces in emerging technologies, which fundamentally threaten Western monopoly capital.
The political meaning of overcapacity
For many decades, large sections of the Western Left have taken a chauvinistic attitude towards the question of China’s Reform and Opening Up. As Marxist scholar Roland Boer has noted, the Western Left has tended to see socialism in abstract and idealistic terms as a classless society with collective ownership of the means of production. However, since most revolutions happened in the East, Marxists there were forced to contend with the blight of underdevelopment and to emphasise liberation of the productive forces as a precondition for socialist construction.
Today, there is a tendency towards the inversion of this situation. The development of the productive forces in China has allowed it to undertake more progressive reforms at home. Meanwhile, the West has undergone protracted deindustrialization during the era of neoliberalism, leading to the Western working class themselves demanding reindustrialization and decent manufacturing jobs. The Chinese overcapacity thesis needs to be understood in the context of this conjuncture.
Western imperialism is in crisis and can no longer sustain the position of its old labour aristocracy. The thesis of Chinese overcapacity therefore serves a dual purpose. First, it provides the Western ruling class with a means to deflect criticism of its own neoliberal policies in order to scapegoat China for the destruction of its industrial base. Second, it allows the that same ruling class to resort to protectionism and subsidies on behalf of monopoly capitalists. Such handouts are unlikely to benefit the Western working class, as they fail to adequately challenge monopoly capital and rentier interests, which constitute the main fetters to liberating the productive forces in the West.
For its part, China is developing technologies that are crucial for the future of humanity. It has done so while the ruling elite in the West gamble away wealth produced by workers through stock buybacks and real estate speculation. It is up to the Western Left to organise workers against imperialism and anti-China chauvinism, and to fight to liberate the productive forces necessary to address the socioeconomic and ecological challenges of this century.
https://socialistchina.org/2024/06/06/o ... rcapacity/
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Black Sea Port Becomes Geopolitical Battleground Between China and the EU
Posted on June 8, 2024 by Yves Smith
Yves here. This story, by what can politely be called a US mouthpiece, illustrates the degree to which China is seen as a strategic competitor and any move that advances their interest, even if arguably mainly economic, is a threat to the West.
By Radio Free Liberty/Radio Liberty staff. Cross posted from OilPrice
China has won the bid to build a deep-sea port in Georgia’s Anaklia, marking the country’s first Chinese-built and operated megaproject on the Black Sea coast.
The deal strengthens Tbilisi and Beijing’s growing ties and pushes China’s presence closer to Europe.
It also influences the future of the Middle Corridor, a global trade route that Georgia serves as a strategic node.
Georgia announced that a Chinese consortium submitted the sole bid to build a sprawling deep-sea port in Anaklia, marking the first megaproject on the Black Sea coast to be built and operated by Chinese firms.
Finding Perspective: The development brings an end to a multiyear political saga inside Georgia over building a deep-sea port at Anaklia, while the role of the Chinese consortium pushes Tbilisi’s growing ties with Beijing into the spotlight.
Georgian Economy and Sustainable Development Minister Levan Davitashvili made the announcement at a May 29 press conference, where he said the government had received bids from a Swiss-Luxembourgish consortium and a joint offer from China Communications Construction Company and the Singapore-based China Harbour Investment.
He added that China Road and Bridge Corporation and Qingdao Port International will serve as subcontractors to build the port.
Davitashvili said Tbilisi only received a final proposal from the Chinese consortium, though, which now looks set to build the country’s first deep-sea port. He said more details would be revealed “in the coming days.”
Why It Matters: Georgia is no stranger to awarding high-profile infrastructure deals to Chinese firms, but the announcement could have far-reaching implications.
For starters, it’s another sign of how close Tbilisi and Beijing are becoming. In July 2023, they signed a strategic partnership pact, and Anaklia marks another attempt to bring Chinese companies to Georgia’s Black Sea after a bid around Poti’s port broke down in 2020.
This deal will also affect the future of the so-called Middle Corridor, a global trade network that ships goods between Europe and Asia in which Georgia serves as a strategic node. The European Union has said developing the route is a goal, especially since Moscow’s 2022 full-scale invasion of Ukraine where it provides trade links that bypass Russia.
But China’s new role with a deep-sea port in Anaklia — which would allow larger ships to transport increased volumes at a more efficient rate — changes things and marks a setback for Brussels.
“This is not good news for the EU, and I think the fact that [China is now building] the port shows a lack of strategic thinking in Brussels,” Romana Vlahutin, a former EU ambassador-at-large for connectivity, told me.
What We Know So Far: Many of the details are still to be revealed, as is the actual contract and total price tag. The government said previously it will retain 51 percent ownership of the port project, with 49 percent going to the other partners.
The Chinese companies involved also come with an interesting history. China Communications Construction Company is a massive player in global infrastructure and one of the largest firms involved in construction projects for China’s Belt and Road Initiative (BRI) over the last decade.
But from 2011 to 2019, the World Bank banned the firm and its affiliates from participating in World Bank-funded construction projects due to a fraud scandal in a road project in the Philippines in 2009.
For a more detailed look at the company’s history — and of some past scandals involving other firms involved in the Anaklia bid — check out this article by Luka Pertaia from RFE/RL’s Georgian Service and myself.
What To Watch: This deal marks the second attempt to build a deep-sea port in Anaklia.
Previously, a consortium formed between Georgia’s TBC Bank and the U.S.-based Conti International was canceled by the government in 2020 after years of political controversy that saw TBC co-founders Mamuka Khazaradze and Badri Japaridze facing money-laundering charges.
The pair were charged but released without jail terms, and Khazaradze has claimed the authorities were trying to sabotage the project. The contract for that deal was worth $2.5 billion.
Khazaradze is in the process of taking the Georgian government to an arbitration court in London over what he maintains were politically motivated charges to derail the port. He’s been an outspoken critic of the project’s revival and said in the past that he believes the legal roadblocks with how the previous consortium was pushed aside could derail the new attempt to build it.
https://www.nakedcapitalism.com/2024/06 ... he-eu.html