How China’s Plan To Build A Canal Across Nicaragua Spells Certain Damage & Downside To All.
In 2014, a very unknown Chinese man, Wang Jin, won a contract to realise the ambition of conquerors and economic sicarios for centuries. Building a Canal from East to West through Nicaragua.
HKND, a Chinese company we will learn more about next, won an exclusive contract to build an extremely wide and extremely deep canal through Nicaragua in order to make way for a future fleet of ever bigger tankers.
The project was scheduled to be complete 2019 and as of writing this, in early 2021, construction has not even begun. This article is not going to be an x’s and o’s in the details but rather an overview of what this project means, because whether or not this project ends up going ahead, the Chinese intent that underpins it all is the most important thread from the story.
- How much corruption is at play here?
- CCP motives & Chinese incentives?
- The shady nature of the money.
- Exploitation everywhere.
Who The F*ck Is Wang Jin.
He’s a Chinese billionaire and ‘telecom executive’ at Beijing Xinwei. Wang is also board chairman of more than 20 companies that operate in more than 35 countries. He also claims to be an ordinary Chinese citizen (propaganda machine getting to work) living in Beijing with his mother, younger brother and daughter. Totally relatable.
He studied, without graduating, at the Jiangxi University of Traditional Chinese Medicine. I have always said you don’t need degrees.
There are far more questions than answers when it comes to Wang. But this is to be expected in China. Relevant to Nicaragua, Wang is in charge of HKND, the company set to build the canal and has apparent access to billions of dollars.
“The CCP Is Not Involved” – Yeah… Sure… Whatever You Say Wang.
The Hong Kong Nicaragua Development Group, HKND, was created just before this giant infrastructure project was announced. Good timing.
Wang and HKND are adamant that there are no Chinese interests at play, and rather this is all just… what? Good business?
The Chinese incentive to own a shipping route that intersects the Americas is enormous. The Panama canal is too shallow and narrow to handle the new fleets of tankers coming out of China. Plus, and more importantly, the geopolitical power Panama (through US puppeteering) can exert on trade via their canal gives throbbing erections of jealousy to the suits of the CCP.
China is quickly becoming economic and cultural enemy #1 – and things don’t appear to be slowing down. China wants to exert its will on an ever expanding net of people. They pay costs with every misstep (trade wars, sanctions, etc), if China can guarantee certainty in cross America shipping without the need to rely on the graces of Panama, then China can afford bigger and bigger missteps. This is about geopolitics and power. Don’t be fooled into thinking otherwise.
So – do you reckon China has anything do with HKND and it’s access to $50,000,000,000? Or are they, as Wang Jin insists, completely unrelated?
We’ve seen this before – this type of private investment/debt trap has been China’s playbook in Africa for decades.
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Didn’t Panama Already Do This?
Connecting the oceans Pacific to Atlantic historically meant you needed to hug around the South American tip and rub shoulders with Antarctica.
The United States, similarly to the Chinese in Nicaragua now, made it happen in the early 20th century. Key difference! Although equally arrogant to have cut through country creating water where there was before land, Panama at least offered a more ‘environmental route’…. comparatively.
The Panama Canal is currently undergoing renovations to expand its capacity. You might ask, well then why is China going through such an effort to build there own? If the new canal can eventually manage the winder and deeper ships then of what purpose is a canal in Nicaragua? Shave a few days of transit time?
It’s all geopolitics. For China to continue exerting it’s evil will over people they must be in control of certain trade routes. If they rely on the Panama Canal, they rely on the USA. They know they cannot do this.
It’s simple as that.
Environmental Damage From A Canal.
It doesn’t take a particularly scientific mind to imagine just how devastating this project will be to Nicuaraguas extremely beautiful and diverse environment.
Let’s start with Lake Nicaragua. The Canal intends to cut right through this beautiful and fertile fish source for thousands of people. Forget the risk of leaking in two separate oceans, but just take a look at this photo below and imagine big tankers meandering through. Pollution is inevitable of course, but what about beauty? There are few things as ugly and brutish as a mega tanker.
As reported by Huete-Pérez of the Humbolt Centre,
“The environmental and human toll (of this project) are significant. There would be significant impacts likely on Lake Nicaragua, affecting 93,800 hectares of terrestrial ecosystems and 18,800 hectares of tropical rainforest in the Mesoamerican Biological Corridor, as well as the displacement of over 30,000 people,”
Tracing a deep and wide canal through almost 200km of thick and wild Nicaraguan forest would spell the type of environmental damage unseen since the unregulated mining activities of the early 19th century. Meaning, thousands of people and hundreds of communities completely displaced, the literal split of a country whose infrastructure already renders it a struggle to move and most importantly, little oversight.
We Have Seen This Before.
What made the speculative mining of the early 19th century in Latin America, Africa and Australia so damaging was the lack of accountability these big engineering firms had. There were no incentives in place to stop illegal dumping and local labour exploitation.
I don’t know about you, but I have no confidence whatsoever that a Chinese firm with Nicaraguan oversight is going to ensure the costly inefficiencies necessary to avoid environmental catastrophe. This isn’t a commentary on their cultures, but rather a commentary on precedent.
Nicaragua is in this for economic development (rightly so) and China is in it for geopolitical superiority (rightly so), both sets of incentives are totally misaligned with the preservation of the environment and local communities.
Why do you think so much more natural exploitation happens in developing economies? Very nuanced question, but for me to hit it bluntly, both parties are more willing to close one eye to environmental regulations because doing that serves there own interests more.
At least on a grand scale, Australia of the 21st century sets extremely expensive roadblocks in front of the exploitation of environment and misplaced communities. The incentives are corrected. If something fucks up! Then there is a hell more to pay in Australia than in Brazil.
I hope this makes sense.
Classic Economic Hitman Playbook. China Edition.
We havn’t addressed Nicaragua’s role in all of this.
Say you are the leader of Nicaragua and let’s imagine the most optimistic scenario. There is no corruption at any level, no-one gets exploited, everyone is compensated, no irreversible damage is done to the environment, and thousands of evergreen jobs are created in Nicaragua. Is the trade-off with China still a good deal?
NO, and here’s why. No matter how well-intentioned or altruistic China may present themselves at the negotiating table, what they ultimately want is power. Power over a key geopolitical piece of infrastructure. A piece of infrastructure that would define your nation. Worst case scenario, there is a battle over the canal were thousands of your people perish, best-case scenario, you are now a puppet of China and beholden to them for your prosperity. Eeeek, that’s grim.
This is classic EHM, which for those unaware, Confessions Of An Economic Hitman is a brilliant book which exposes (somewhere in between fact and fiction) how big pieces of debt and infrastructure projects like a Nicaraguan Canal are quarterbacked by private firms in powerful nations for the interest of both private profit and public power.
What’s Really Happening Here?
Wang is coming in under the hidden guise of Chinese interests and proposing to Nicaragua a promise to create prosperity to the people and political success to leaders.
It’s done through a private firm with ‘private’ money to seperate (only at the technical level) the interests of the private and the public.
HKND will hire consultants and experts to compile reports that indicate Nicaragua can increase their GDP by ‘X%’ and provide ‘X’ amount of jobs to ‘X’ disenfranchised communities. The project can be completed in ‘X’ amount of time at ‘X’ cost and only with ‘X’ amount of environmental damage.
We know you can lie with statistics. We know this. How often are economic and infrastructure predictions correct? When is a project ever completed one time, or on budget?
In reality. When all is said and done…
Maybe GDP increased but it will be less than you were quoted and certainly unevenly distributed. The project took 5 years more than predicted which stretched financing, so local labour was the first cost to be chopped. There was a few unforeseen cracks in the wall and ‘woops’ massive spill and irreversible environmental damage for which you will not be financially compensated. Jobs might come, but just as quickly as they can be given they can be taken away. Oh, and we are going to bring over Chinese for all the technical labour, therefore not increasing the skill set of your own populous. Plus – most of the profits of this canal’s operations are going back to HKND, China, corrupt politicians…. and maybe if some is leftover, some Nicaraguans.
Things As They Stand Now – China/Nicaragua Canal
The project is yet to begin. China are public enemy #1.
At the end of the day, this is between Nicaragua and China. Nicaragua are the second poorest nation in the Western Hemisphere. All they have is their natural resources.
Hopefully this project does not go ahead – but hope does not determine these things.
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