The World's Poorest Continent May Not Have Food, But It Is About To Have A Monorail

It is a well-known fact that the primary driver of China's hollow if scorching (and now slowing) growth over the past decade was an unprecedented surge in fixed investment - a surge so strong it has led to the proliferation of ghost cities across the mainland, and even the Beijing politburo is getting concerned that the epic overcapacity, which incidentally does not pay any cashflows even though it is funded by debt, will lead to an even more epic non-performing loan bust, hence the attempts to slow down Chinese "growth."

However, so far China has been unable to boost either consumption or its middle class to offset the capex expansion momentum, with the bulk of accumulated wealth going to the oligarchy at the very top of social strata (which has been doing its patriotic duty of buying up real estate... in London and New York) while the poor get even poorer.

So what is China to do? Why continue spending tens of billions on fixed investment.... In Africa.

We have shown previously that when it comes to "frontier markets" nobody has been as successful at exploiting Africa, as China. It was in August 2012 when we first showed how China quietly took over Africa.

Since then, Chinese penetration in Africa has merely accelerated and appears to have culminated with the news that China will extend over $12 billion in "aid" to Africa.

Not only that, but very soon the world's most impoverished continent may not have food, but it will have... a monorail.

Reuters reports that Chinese Premier Li Keqiang unveiled extra aid for Africa totalling at least $12 billion on Monday, and offered to share advance technology with the continent to help with development of high-speed rail, state news agency Xinhua reported. Li pledged the additional funding in a speech at the Organisation of African Union headquarters in the Ethiopian capital, Addis Ababa, which also doubles as one of the world's poorest countries.

So as the US increases its inventory of drones in such strategic places as Congo and the Central African republic, China will instead go the peaceful route and its increase credit lines to Africa by $10 billion and will boost the China-Africa Development Fund by $2 billion, bringing it to a total of $5 billion, Xinhua said. It provided no details of the timeframe.

And the piece de resistance: Li "depicted a dream that all African capitals are connected with high-speed rail, so as to boost pan-African communication and development," the report said. As China has advanced technologies in this area, Li said China was ready to work with Africa "to make this dream come true".

Because all the up and coming generation of debt slaves to the world's most capitalist country now needs is not food, but fast train connections.

It is Li's first visit to Africa since he became premier last year, and follows on from a trip to the continent by President Xi Jinping in March 2013, when he renewed an offer of $20 billion in loans to Africa between 2013 and 2015.

 

It was unclear if the aid announced by Li is already included in that figure or if this is new funding.

 

Chinese officials said last week that Li's trip, which also takes in oil-rich Nigeria and Angola, would not simply be for energy deals and Beijing will be seeking to help boost African living standards.

Some see right through this attempt by China to kill two birds with one stone - to find a new place where to allocate "fixed investment", and in the process, to soak up as much natural resources as possible before the restless natives pull a South African gold mine and go on strike:

Trips by Chinese leaders to Africa are often marked by big natural resource deals, triggering criticism from some quarters that China is only interested in the continent's mineral and energy wealth. Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for more balanced trade relations.

Too late. The Second Berlin Conference took place years ago and Africa has already been divided: sadly for the US, it is China that is now in control of this resource-rich continent, which may not have enough food for everyone but at least it is about to have a monorail.

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