Jan 06

Today’s News 6th January 2019

  • Mass Exodus: More People Left New Jersey Than Any Other State In 2018

    Over the last four decades, United Van Lines has published its National Movers Study, which tracks customers’ state-to-state migration trends over the past year, revealed a mass exodus of residents from New Jersey than any other state in 2018.

    Last year, New Jersey displaced Illinois to take the top spot on the list of most-moved from states. According to the study, 66.8% of New Jersey’s moves in 2018 were outbound, the highest rate across the country.

    Illinois (65.9%), Connecticut (62%), New York (61.5%), and Kansas (58.7%) were included on the top five most moved-from states.

    Among age demographics, New Jersey had a great year in attracting millennials, the state saw 7.97% more moves to the state than moves away. However, baby boomers were leaving the state 10% more often than arrived. 

    Americans Are On The Move, But Where Are They Move To And From?

    Some of the reasons for moving out of  New Jersey, according to the National Movers Study, were new jobs (34.73%), retirement (34.51%), and family (20.44%), followed by lifestyle (17.36%) and by health (6.15%).

    More than two-thirds of the people who moved to New Jersey in 2018 (61.84%) arrived because of new employment 

    “As the nation’s largest household goods mover, our study allows us to identify the most and least popular states for residential relocation throughout the country, year after year,” said Eily Cummings, director of corporate communications at United Van Lines. “These findings accurately reflect not only where Americans are moving to and from, but also the reasons why.”

    Meanwhile, Ohio, Massachusetts, Iowa, Montana, and Michigan were bumped off the list of the most-moved from states.

    Vermont, whose population is the second-smallest in the country, was the only state in the Northeast to see improved inbound migrations.

    Four Western states were on the top five moved to list — Oregon, Idaho, Nevada, and Arizona.

    The Carolinas, Washington, South Dakota and the District of Columbia were very close in making the top inbound list.

    “The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factors like job growth, lower costs of living, state budgetary challenges and more temperate climates,” said Michael Stoll, economist and professor in the Department of Public Policy at UCLA.

    “Unlike a few decades ago, retirees are leaving California, instead choosing other states in the Pacific West and Mountain West. We’re also seeing young professionals migrating to vibrant, metropolitan economies, like Washington, DC, and Seattle,” Stoll said. 

    The study coincides with a 2017 report that New Jersey lost population for the first time in a decade. With a historically low birth rate and population growth that is stalling, New Jersey could find itself in economic trouble and the loss of Congressional seats in the coming years. 

  • US Military Will Test-Fire Next Gen Rifle Prototypes This Summer

    For several decades, small arms advocates have urged the Pentagon for a replacement to the standard M16/M4 service weapon and the squad level light machine gun carried by most soldiers, Marines and special forces. Now, prototypes of these new super weapons are expected to be on the firing line in summer 2019.

    Multiple Armed Forces intend on fielding the Next Generation Squad Automatic Rifle (NGSAR), the first version of the Army’s Next-Generation Weapons System that chambers a round between 6.5mm and 6.8mm, as a replacement of its aging M16/M4 and M249 SAWs starting in 2022, Col. Geoffrey A. Norman, force development division chief at Army HQ, told Task & Purpose in early 2018.

    Textron/AAI Next-Generation Weapon 
    Textron/AAI Next-Generation Weapon information 

    The new weapons will be transferred to close combat Army, Marine, and special operations forces in the early 2020s.

    Before the selection of prototypes, government officials asked industry leaders to develop a round that would shoot further, more accurate, and penetrate the world’s most advanced body armor somewhere between 5.56mm and 7.62mm, the current standard NATO rounds.

    In October, the Army selected the 6.8mm, next-generation round as the official requirements for the system. The NGSAR will weigh less, shoot farther, and pack more punch than the service’s existing infantry weapons, Norman told Task & Purpose. And more importantly, the platform will incorporate a chamber pressure superior to the current system in soldiers’ arsenals to ensure that the rounds can still penetrate enhanced enemy body armor at up to 600 meters.

    “The chamber pressure for the standard assault rifle is around 45 KSI [kilopound per square inch], but we’re looking for between 60 and 80 KSI … the chamber pressure when an M1 Abrams tank fires is on that order,” Norman told Task & Purpose. “We’re looking to reach out around 600 meters and have lethal effects even if the target is protected by body armor.”

    Last summer, the Army selected five companies to provide NGSAR prototypes that will be tested in the second half of 2019. 

    Those companies are:

    • AAI Corporation Textron Systems
    • FN America LLC
    • General Dynamics-OTS Inc.
    • PCP Tactical, LLC.
    • Sig Sauer Inc.

    The reason for the new weapons, according to Norman, is the Pentagon’s current shift from urban warfare in Iraq and Syria to the mountains and open terrain of Afghanistan. While the standard rifles may be well-suited for close combat in cities like Mosul and Raqqa, it lacks the range to kill adversaries in open stretches.

    “For the past 10 or 15 years, we’ve been really focused on the requirement of lethal effects against unprotected targets,” Norman said. “Now we’re looking at near-peer threats like Russia and others. We need to have lethal effects against protected targets and we need to have requirements for long-range lethality in places like Afghanistan, where you’re fighting from mountaintop to mountaintop over extended ranges.”

    Once the NGSAR is selected, the Army intends to make follow-on production awards for “250,000 total weapons system(s) (NGSW-R, NGSW-AR, or both), 150,000,000 rounds of ammunition, spare parts, tools/gauges/accessories, and engineering support.”

    The awards could be worth $10 million the first year and $150 million per year at the higher production rates.

    The bottom line is that long-awaited replacement to the standard service rifle is almost here. The Pentagon is in the last stretch of testing and by the end of 2019, could select one of the five companies above to produce the new weapon. This is all happening as the world has moved into a new and unsettling geopolitical phase.

  • US To Hold "First-Ever" Missile Drill On Japan's Okinawa

    The US Military will conduct its first-ever missile drill on the Japanese Island of Okinawa, located in the East China Sea, as Washington attempts to counter an increasingly aggressive China. Japan Times reported on Thursday that the US military had notified Japan’s government that it would deploy anti-ship missile systems around the strategically important island this year, the original story was released by Sankei Shimbun.

    The war exercise would fortify the island with possible truck-mounted anti-ship cruise missile systems seen as a countermeasure to potential attacks from Chinese surface-to-sea ballistic rockets, the paper said.

    China has repeatedly railed against US military expansion in Asia and the Pacific, describing the presence as a source of regional instability. In the last several years, Chinese warships have navigated near Okinawa, where roughly half of the 54,000 American troops are stationed, in an attempt to curb US military dominance in the East China Sea.

    To counter the treat, Japan, has, in turn, postured its military along the Japanese archipelago, a group of 6,852 islands that extends over 1,850 miles from the Sea of Okhotsk northeast to the Philippine Sea south along the northeastern coast of the Eurasia continent.

    Some military strategists believe Beijing seeks to end US military dominance in the western Pacific by exerting control of the second island chain that links Japan’s southern Ogasawara islands, the US territory of Guam, and Indonesia, said The Japan Times.

    China’s rapid military build-up in the South China Sea has frightened its Asian neighbors, with Japan’s defense chief last year indicating China had been “unilaterally escalating” its military war drills in the previous year.

    Okinawa’s strategic location between the Philippine, East China and South China Seas makes it a critical military outpost to preserve freedom of navigation of US warships and defend American security interests in the region. Okinawa’s proximity to China, Taiwan, the Korean Peninsula, and Japan supports rapid deployment of US marines to anywhere in the Eastern Hemisphere.

    America’s presence on the island is also a critical component of its strategy to preserve peace on the Korean Peninsula.

    Washington remains massively invested in Okinawa as a means of policing Asia and supporting Japan in its national defense, an obligation that started when the US signed the Security Treaty with Japan in 1960.

    While America has hundreds of military bases around the world, the Okinawa base with future missile drills this year could be an indication that conflict with China is nearing in the East China Sea. 

  • Record Numbers Of Women And Poor Americans Want To Leave The U.S.

    While Donald Trump has spent much of his presidency focused on the number of people who want to get into the U.S., since he took office, record numbers of Americans have wanted to get out according to a recent Gallup poll.

    Though relatively average by global standards, the 16% of Americans overall who said in 2017 and again in 2018 that they would like to permanently move to another country – if they could – is higher than the average levels during either the George W. Bush (11%) or Barack Obama administration (10%).

    While Gallup’s World Poll does not ask people about their political leanings, most of the recent surge in Americans’ desire to migrate has come among groups that typically lean Democratic and that have disapproved of Trump’s job performance so far in his presidency: women, young Americans and people in lower-income groups.

    During the first two years of the Trump administration, a record-high one in five U.S. women (20%) said they would like to move to another country permanently if they could. This is twice the average for women during the Obama (10%) or Bush years (11%) and almost twice the level among men (13%) under Trump. Before the Trump years, there was no difference between men’s and women’s desires to move.

    The 30% of Americans younger than 30 who would like to move also represents a new high – and it is also the group in which the gender gap is the largest. Forty percent of women younger than 30 said they would like to move, compared with 20% of men in this age group. These gender gaps narrow with age and eventually disappear after age 50.

    Desire to migrate among the poorest 20% of Americans during Trump’s first two years is also at record levels. It is more than twice as high as the average during Obama’s two terms. So far under Trump, three in 10 Americans (30%) in the poorest 20% say they would like to migrate if they could, compared with an average of 13% under Obama.

    But more than anything else, Trump himself may be the primary motivator. Regression analysis shows that regardless of differences by gender, age or income — if Americans disapprove of the job Trump is doing as president, they are more likely to want to leave the U.S. Overall, 22% of Americans who disapproved of Trump’s job performance during his first two years said they would like to move, compared with 7% who approved.

    Destination Canada?

    Before and after Trump’s election, many Americans — particularly Democrats — threatened to move to Canada (as Republicans did after Obama was elected). Canada always has been one of the top desired destinations for Americans, but that desire has only increased since Trump’s election. In 2018, more than one in four Americans (26%) who would like to move named Canada as the place they would like to go, up from 12% in 2016.

    It’s important to note that people’s desire to migrate is typically much higher than their intention to do so — as such, it is unlikely that Americans will be flocking to the Canadian border. In fact, since Trump’s election, Canadian statistics show only a modest uptick in the number of Americans who have moved to Canada.

    Bottom Line

    After years of remaining flat, the number of Americans – particularly young women – who desire to leave the U.S. permanently is on the rise. This increase is concerning, but none of this suggests that the U.S. is going to suddenly see a mass migration in which it could lose as many as 40% of its young women.

    However, the “Trump effect” on Americans’ desire to migrate is a new manifestation of the increasing political polarization in the U.S. Before Trump took office, Americans’ approval or disapproval of the president was not a push factor in their desire to migrate.

  • "Sykes-Picot On Acid": US Considering Syria Partition Plan Amidst Troop Exit

    The White House-appointed Syria and anti-ISIL coalition envoy James Jeffrey has asked Syrian Kurdish leaders backed by the United States to hold off on making any deals with President Bashar al-Assad’s government while the Trump administration tries to develop its strategy. As we predicted the longer it takes to withdraw troops, the more time the blob of Washington hawks has to put obstacles in the way of a true and full US pullout.

    Meanwhile according to The Wall Street Journal Turkey is putting pressure on the US to provide “substantial military support, including airstrikes, transport and logistics” in support of Turkey’s supposed ISIS fight in Syria. So a mere little over two weeks following Trump’s announced Syria draw down, it appears we could be right back to a square one quagmire.

    Kurdish YPG forces speak with US troops in Darbasiya, Syria, via Reuters

    Or perhaps the US deep state will send things further into a “forever war” indefinite quagmire, the polar opposite of Trump’s stated desire to “bring our youth back home where they belong!” — as the president declared following the initial troop pullout announcement, per the below alarming commentary from the WSJ:

    The Turkish requests are so extensive that, if fully met, the American military might be deepening its involvement in Syria instead of reducing it, the officials added. That would frustrate President Trump’s goal of transferring the mission of finishing off Islamic State to Turkey in the hope of forging an exit strategy for the U.S. military to leave Syria.

    But to “frustrate President Trump’s goal” is precisely the point among the many Iran hawks, Syrian regime change promoters, neocons and liberal interventionists alike filling the ranks of the State Department and influential DC think tanks.

    This comes just as a senior State Department official reiterated to the WSJ:

    “We have no timeline for our military forces to withdraw from Syria.”

    So the two key messages now coming out of the administration are “no timeline” and “no vacuum” which can be generally summarized as given any US pullout of northeast Syria, the US doesn’t want pro-Turkish forces to slaughter the Kurds, but neither does the US want the Kurds to strike a deal with Assad to handover territory to Damascus. 

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    However, it’s likely too late, as the Kurds have already begun inviting Syrian forces into previously autonomous SDF/Kurdish zones. 

    According to the WSJ, the administration’s Syria envoy has a plan that seeks to mitigate the risks of either a Kurdish slaughter or an Assad takeover. The plan is visualized in a classified, undisclosed map that proposes something officials have described as “Sykes-Picot on acid”:

    Mr. Jeffrey and his State Department team have created a color-coded map of northeastern Syria in an attempt to negotiate a power-sharing plan that could avert a costly Turkish-Kurdish fight in the area.

    However, keeping their forces apart should Mr. Erdogan’s troops enter Syria could prove difficult. One former U.S. official described the map as “Sykes-Picot on acid,” a reference to the secret post-World War I deal between France and England that carved the Middle East into colonial spheres of influence.

    Talks will be held between US and Turkish defense officials next week in Ankara, meanwhile the US envoy “has asked Gen. Mazloum Abdi, the Kurdish commander of Syrian fighters, to hold off on making any deals with President Bashar al-Assad’s government” while the US considers its next move. 

    But it remains that we’ve gone from Trump’s “full” and “immediate” troop pullout announced two weeks ago to current proposals of “Sykes-Picot on acid”. 

  • A Visual History Of The 20 Internet Giants That Ruled The Web From 1998 To 2018

    Submitted by Visual Capitalist

    With each passing year, an increasingly large segment of the population no longer remembers images loading a single pixel row at a time, the earsplitting sound of a 56k modem, or the domination of web portals.

    Many of the top websites in 1998 were basically news aggregators or search portals, which are easy concepts to understand. Today, brand touch-points are often spread out between devices (e.g. mobile apps vs. desktop site) and a myriad of services and sub-brands (e.g. Facebook’s constellation of apps). As a result, the world’s biggest websites are complex, interconnected web properties.

    Today’s visualization, inspired by an earlier work published by WaPo, looks at which of the internet giants have evolved to stay on top, and which have faded into internet lore.

    America Moves Online

    For millions of curious people the late ’90s, the iconic AOL compact disc was the key that opened the door to the World Wide Web. At its peak, an estimated 35 million people accessed the internet using AOL.

    By 1999, the AOL rode the Dot-com bubble to dizzying heights, with a valuation of $222 billion dollars.

    AOL’s brand may not carry the caché it once did, but the brand never completely faded into obscurity. The company continually evolved, finally merging with Yahoo after Verizon acquired both of the legendary online brands. Verizon has high hopes for the company – called Oath – to evolve into a “third option” for advertisers and users who are fed up with Google and Facebook.

    A City of Gifs and Web Logs

    As internet usage began to reach critical mass, web hosts such as AngelFire and GeoCities made it easy for people to create a new home on the Web.

    GeoCities, in particular, made a huge impact on the early internet, hosting millions of websites and giving people a way to actually participate in creating online content. If the web host was a physical place, it would’ve been the third largest city in America, just after Los Angeles.

    This early online community was at risk of being erased permanently when GeoCities was finally shuttered by Yahoo in 2009, but the nonprofit Internet Archive took special efforts to create a thorough record of GeoCities-hosted pages.

    From A to Z

    In December of 1998, long before Amazon became the well-oiled retail machine we know today, the company was in the midst of a massive holiday season crunch.

    In the real world, employees were pulling long hours and even sleeping in cars to keep the goods flowing, while online, Amazon.com had become one of the biggest sites on the internet as people began to get comfortable with the idea of purchasing goods online. Demand surged as the company began to expand their offering beyond books.

    Digital Magazine Rack

    Meredith – with the possible exception of Oath – may be the most unrecognizable name to many people looking at today’s top 20 list. While Meredith may not be a household name, the company controls many of the country’s most popular magazine brands (People, Sports Illustrated, Health, etc.) including their sizable digital footprints. The company also has a slew of local television networks around the United States.

    After its acquisition of Time Inc. in 2017, Meredith became the largest magazine publisher in the world.

    “Hey, Google”

    When people have burning questions, they increasingly turn to the internet for answers, but the diversity of sources for those answers is shrinking.

    Even as recently as 2013, we can see that About.com, Ask.com, and Answers.com were still among the biggest websites in America. Today though, Google appears to have cemented its status as a universal wellspring of answers.

    As smart speakers and voice assistants continue penetrate the market and influence search behavior, Google is unlikely to face any near-term competition from any company not already in the top 20 list.

    New Kids on the Block

    Social media has long since outgrown its fad stage and is now a common digital thread connecting people across the world. While Facebook rapidly jumped into the top 20 by 2007, other social media infused brands took longer to grow into internet giants.

    In 2018, Twitter, Snapchat, and Facebook’s umbrella of platforms were are all in the top 20, with LinkedIn and Pinterest not far behind.

  • "The Criminals Who Run The Deep State Will Be Exposed": Kim Dotcom Teases "Next Round Of Leaks"

    Hacker and serial entrepreneur Kim Dotcom is out with a new prediction for 2019: 

    “Get ready for the next round of leaks.” 

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    Dotcom then tweeted “This year the criminals who run the Deep State will be exposed,” adding “The shareholders profiting from war and chaos. The billionaires who turn democracy into an illusion. They own politicians, judges and all your data. They are the biggest pirates in history. Want to know who they are?“

    For those paying attention, Dotcom dropped massive breadcrumbs going all the way back to 2015 regarding the WikiLeaks release of Hillary Clinton’s emails during the 2016 US election.

    And while he’s has made headlines for years, in February Dotcom boldly stated that the DNC “hack” which kicked off the Russian election interference narrative was bogus, tweeting: “Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why.” 

    Dotcom says he offered to produce evidence to Special Counsel Robert Mueller, twice, and they never even replied to him. 

    Apparently Mueller is only interested in the chosen narrative, regardless of whether or not the glove fits.  

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  • Global Housing Markets From Hong Kong To Sydney Join Global Rout 

    It’s not just stocks: the global housing market is in for a rough patch, which has turned ugly for many homeowners and investors from Vancouver to London, with markets in Singapore, Hong Kong, and Australia already showing increased signs of softening.

    Macro factors have triggered a global economic slowdown that is unraveling luxury marketplaces worldwide, according to Bloomberg. As a result, a turning point has been reached, with home prices globally now under pressure, and rising mortgage rates leading to depressed consumer optimism, while also triggering a housing affordability crisis, S&P Global Ratings said in a December report. To make matters worse, a simultaneous drop in house prices globally could lead to “financial and macroeconomic instability,” the IMF warned in a report last April.

    While each metropolis globally has its distinct characteristics of what triggered its real estate slowdown, there are a few common denominators at play: rising borrowing costs, quantitative tightening, a crackdown on money laundering and increased government regulation, emerging market capital outflows and volatile financial markets. Bloomberg notes that there is also declining demand from Chinese buyers, who were the most powerful force in many housing markets globally over the course of this cycle.

    “As China’s economy is affected by the trade war, capital outflows have become more difficult, thus weakening demand in markets including Sydney and Hong Kong,” said Patrick Wong, a real estate analyst at Bloomberg Intelligence.

    One of the first dominos to fall has been in Hong Kong, home values in the city have plummeted for 13 weeks straight since August, the longest losing streak since the 2008 financial crash, data from Centaline Property Agency show. Homeowners and investors have taken great caution due to a jump in borrowing costs, a looming vacancy tax, and the trade war that has derailed economic growth in mainland China.  

    “The change in attitude can be explained by a slowing mainland economy,” said Henry Mok, JLL’s senior director of capital markets. “Throw in a simmering trade war between China and the U.S., the government has taken actions to restrict capital outflows, which in turn has increased difficulties for developers to invest overseas.”

    Home prices in Singapore, which rank among the world’s most expensive places to live, logged the first decline in six quarters in the three months ended December. Bloomberg said luxury experienced the worst declines, with values in prime areas dropping 1.5%.

    Most of the slowdown was caused by government policies to cool the overinflated housing market. Cooling measures were implemented in July included higher stamp duties and tougher loan-to-value rules. The policies enacted by the government have halted the home-price recovery that only lasted for five quarters, the shortest since data became available.

    “Landed home prices, being bigger ticket items, have taken a greater beating as demand softened,” said Ong Teck Hui, a senior director of research and consultancy at JLL.

    The downturn in Sydney’s housing market is expected to continue this year as tighter lending standards and the worst plunge in values since the late 1980s has spooked buyers. Average Sydney home values had dropped 11.1% since their 2017 top, according to a recent CoreLogic Inc. report — surpassing the 9.6% peak to trough decline when Australia was on the cusp of entering its last recession.

    Nationwide, home values declined 4.8% last year, marking the weakest housing market conditions since the 2008 financial crash.

    “Access to finance is likely to remain the most significant barrier to an improvement in housing market conditions in 2019,” CoreLogic’s head of research Tim Lawless said. Weak consumer sentiment toward the property market is “likely to continue to dampen housing demand.”

    Bloomberg notes that home prices in the country are still 60% higher than in 2012, if prices plunge another 10% in 2019, well, it could spark mass panic.

    The Reserve Bank of Australia is terrified that an extended downturn will crimp consumption and with the main opposition Labor party pledging to curb tax perks for property investors if it wins an election expected in May, economic optimism would further deteriorate. Treasurer Josh Frydenberg on Thursday told the nation’s top banks not to tighten credit any more as the economic downturn is expected to get much worse.

    But all eyes are on what is going on in arguably the most important housing markets in the world – those of Shanghai and Beijing. A government crackdown on leverage and overheating prices have damaged sales and triggered a 5% tumble in home values from their top. Rules on multiple home purchases, or how soon a property can be flipped once it is acquired, are starting to be relaxed, and the giveaways by home builders to lure buyers are starting to get absurd.

    One developer in September was giving away new BMWs to new homebuyers at its townhouses in Shanghai. Down-payments have been slashed, with China Evergrande Group asking for 5% rather than the normal 30% deposit required.

    “It’s not a surprise to see Beijing and Shanghai residential prices fall given the curbing policies currently on these two markets,” said Henry Chin, head of research at CBRE Group Inc.

    As a whole, Bloomberg’s compilation of global housing data showing the unraveling of many housing markets is a sobering reminder that a synchronized global slowdown has started.

  • How China Colonized An Entire Continent Without Firing A Single Shot

    Back in 1885, to much fanfare, the General Act of the Berlin Conference launched the Scramble for Africa which saw the partition of the continent, formerly a loose aggregation of various tribes, into the countries that currently make up the southern continent, by the dominant superpowers (all of them European) of the day. Subsequently Africa was pillaged, plundered, and in most places, left for dead. The fact that a credit system reliant on petrodollars never managed to take hold only precipitated the “developed world” disappointment with Africa, no matter what various enlightened, humanitarian singer/writer/poet/visionaries claimed otherwise.

    And so the continent languished….  until 2012 when what we then dubbed as the “Beijing Conference” quietly took place, and to which only Goldman Sachs, which too has been quietly but very aggressively expanding in Africa, was invited.

    As the map below, which we first showed in 2012, in just two years after 2010 China had pledged over $100 billion to develop commercial projects in Africa, a period in which the continent had effectively become de facto Chinese province, unchallenged by any developed nation which in the aftermath of the financial crisis had enough chaos at home to bother with what China may be doing in Africa.

    Since then China’s financial colonization of Africa has only accelerated, and according to a study by the China-Africa Research Initiative at the Johns Hopkins School of Advanced International Studies, China had lent a total of $143 billion to 56 African nations facilitated principally by the Export-Import Bank of China and the China Development Bank. By sector, close to a third of loans were directed toward financing transport projects, a quarter toward power and 15% earmarked for resource mining including hydrocarbon extraction. Just 1.6% of Chinese loans were dedicated to the education, healthcare, environment, food and humanitarian sectors combined, confirming that all China interested in was building a giant commodity/trade/military hub.

    Just seven countries – the strategically important Angola, Cameroon, Ethiopia, Kenya, Republic of the Congo, Sudan and Zambia – accounted for two thirds of total cumulative borrowing in 2017 from China, with oil-rich Angola alone representing a 30% share, or $43 billion (35% of Angolan 2017 GDP). Ultimately, Angola reached a loans-for-oil settlement, with Beijing tying the country’s future oil production to shipments to China in order to service the country’s burgeoning infrastructure debt. According to an April 2018 IMF study, as of the end of 2017, about 40% of low-income Sub-Saharan African countries are now in debt distress or assessed as being at high risk of debt distress including Ethiopia, the Republic of the Congo and Zambia.

    Amusingly, in a September 2018 speech to the triennial Forum on China-Africa Cooperation in Beijing, President Xi Jinping said Chinese investment came “with no strings attached” and pledged a further $ 60 billion of loans for African infrastructure development over the next three years. As it turns out, Xi was only joking because as we reported last month, China was set to take over Kenya’s lucrative Mombassa port if Kenya Railways Corporation defaults on its loan from the Exim Bank of China. The China-built, China-funded standard gauge railway, also known as the Madaraka Express, was plagued by cost overruns, and outside observers questioned its economic viability, but China was not worried: after all, if the 80%-China funded project failed, Beijing would have full recourse. Call it a “debt-for-sovereignty” exchange.

    It’s not just Kenya and Angola: other notable examples of China’s debt-funded colonization endgame include Sri Lanka, where difficulties servicing $8 billion of infrastructure-related borrowing from China led to the handing over of a controlling equity stake and a 99-year operating lease for the country’s second-largest port at Hambantota to a subsidiary of a Chinese state-owned
    enterprise in December 2017. For Pakistan, more than 90% of revenues generated at the newly developed Gwadar Port at the mouth of the strategically significant Gulf of Oman are collected by the Chinese operator.

    And so, as more developing, peripheral countries default on Chinese loans and are forced to hand over the keys to key sovereign projects to Beijing, China will slowly but surely “colonize” not just Africa but many of the Asian nations in the “Belt and Road Initiative” following a popular playbook developed by none other than the original “economic hitmen“…

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