Tuesday, January 1, 2019

Foxconn Debt Trap?

Dear City of Racine Alderpersons, 
What product is Foxconn going to manufacture at it's bright and shiny 
MTP plant? Does anybody know? It's not a Gen 10 LCD TV. Likely not a 
Gen 6 LCD TV. Why - Foxconn can't even tell City of Racine Water 
Manager Keith Haas what it intends to build there. 
But Foxconn, a foreign Corporation,  is now entrenched in MTP - and 
has special rights. 
Let's see what is happening today, in Africa: 
TAIPEI (Taiwan News) – China may be preparing to seize some major 
assets in the African nation of Kenya, as a result of debt-trap 
African media reports that Kenya may soon be forced to relinquish 
control of its largest and most lucrative port in Mombasa to Chinese 
Other assets related to the inland shipment of goods from the port, 
including the Inland Container Depot in Nairobi, and the Standard 
Gauge Railway (SGR), may also be compromised in the event of a Chinese 
port takeover. 
Kenya has reportedly taken extremely large loans from the Communist 
government for the development of some major highways, and especially 
for the SGR, which forms a crucial transport link to and from Nairobi 
for the import and export of goods through Mombasa. 
In November, Moody’s noted that Kenya is at high risk of losing 
strategic assets because of debts owed to Beijing. 
After a subsequent report from the country's Auditor General, local 
media began to express concern that Chinese lenders may be angling to 
seize assets, since it does not appear the Kenyan government will be 
capable to repaying the loans. 
Now, one month later, ahead of the New Year, it’s been reported that 
the Chinese may be preparing to take over the Mombasa Port 
infrastructure soon. 
The African Stand also seems to suggest that the SGR, which is 
operated by the Chinese, may have been designed to be a “loss-making 
With a reported loss of KES 10 billion (US$98 million) in its first 
year of operation, it would be nearly impossible to repay the loans 
taken for its construction in the time requested. Kenya reportedly 
accepted loans of KES 500 billion (US$4.9 billion) for the SGR’s 
The Kenyan government risks losing the lucrative Mombasa port to China 
should the country fail to repay huge loans advanced by Chinese 
In November, African Stand reported on how Kenya is at high risk of 
Losing strategic assets over huge Chinese debt and just after some few 
month the Chinese are about to take action. [1] 
The loans have been granted for the development of the Standard Gauge 
Railway (SGR). 
Also at stake is the Inland Container Depot in Nairobi, which receives 
and dispatches freight hauled on the new cargo trains from the sea 
Implications of a takeover would be grave, including the thousands of 
port workers who would be forced to work under the Chinese lenders. 
Management changes would immediately follow the port seizure since the 
Chinese would naturally want to secure their interests. 
Further, revenues from the port would be directly sent to China for 
the servicing of an estimated Sh500 billion lent for the construction 
of the two sections of the SGR. 
How China Got Sri Lanka to Cough Up a Port 
HAMBANTOTA, Sri Lanka — Every time Sri Lanka’s president, Mahinda 
Rajapaksa, turned to his Chinese allies for loans and assistance with 
an ambitious port project, the answer was yes. 
Yes, though feasibility studies said the port wouldn’t work. Yes, 
though other frequent lenders like India had refused. Yes, though Sri 
Lanka’s debt was ballooning rapidly under Mr. Rajapaksa. 
Over years of construction and renegotiation with China Harbor 
Engineering Company, one of Beijing’s largest state-owned enterprises, 
the Hambantota Port Development Project distinguished itself mostly by 
failing, as predicted. With tens of thousands of ships passing by 
along one of the world’s busiest shipping lanes, the port drew only 34 
ships in 2012. 
And then the port became China’s. 
Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new 
government struggled to make payments on the debt he had taken on. 
Under heavy pressure and after months of negotiations with the 
Chinese, the government handed over the port and 15,000 acres of land 
around it for 99 years in December. 
Is it possible that  Foxconn scammed Governor Scott Walker, 
Representative Robin Vos, Racine County Executive Jonathon Delagrave, 
City of Racine Mayor Cory Mason, and MTP President David DeGroot? 
Racine County residents will be forced to continue to pay for Foxconn 
even if the alleged 13,000 jobs paying $53,000 each don't appear. 
What then? 
And who will, in Bankruptcy - have first rights? 
Still desperately waiting on those 13,000 jobs paying $53,000 each. 
Tim & Cindy

No comments: