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Alex Lo
SCMP Columnist
My Take
by Alex Lo
My Take
by Alex Lo

Some amusing ‘Red Scare’ tales US tells about China

  • A space station in Argentina, the Hambantota port in Sri Lanka and a naval base in Djibouti are just some examples of half-truths and scaremongering told about “the China threat”

Last month, a team from multiple agencies of the government of far-right President Javier Milei carried out an inspection of China’s deep space station and observatory in the Neuquén province.

Located in the famous Patagonian desert of Argentina, the facility was being inspected reportedly as part of Milei’s efforts to make sure the Chinese facility wasn’t used for spying, as Washington has repeatedly warned, rather than for Beijing’s space programme, especially its moon-focused missions.

Chinese space station in Argentina

With its deep space antenna, the Espacio Lejano station’s satellite-tracking and signals-monitoring systems were key to the success of the Chang’e 4 mission to the far side of the moon, which never faces the Earth, in 2018-19.

It’s expected to play a similarly important role in the Chang’e 6 mission – which was launched on Friday – to collect and return samples for the first time from the far side of the moon.

As reported by the Argentine news media, the inspection included specialists from the country’s foreign ministry, secretariat of science, technology and innovation, national strategy secretariat, Enacom telecommunications authority and the national commission for space activities.

It was, as reported by the Buenos Aires Times, “ordered by the Cabinet Office, headed by Nicolás Posse, and comes [after] repeated petitions from the United States, both through its ambassador in Buenos Aires, Marc Stanley, and the head of the Southern Command, General Laura Richardson, who recently visited Argentina”.

Nothing untoward was found, as expected, despite all the multi-year media hype about possible Chinese spying from the US while it offered zero evidence. Washington’s claim is that the station’s tracking capabilities could have dual use by the Chinese military, rather than just for China’s space programme.

In fact, last month’s large-scale and high-profile inspection was a routine one, they were carried out in 2019 and 2022, long before the US-friendly Milei came to power, by his predecessor Alberto Fernández, who was much closer to Beijing.

So it looks more designed to placate the Americans than anything else. Argentine technicians and scientists have always shared the space station – under the contract, 10 per cent of “timeshare” and resource usage of the facility is allotted for Argentinian use.

But Milei has been under US pressure to cancel the space station deal, which will have a negative impact on the whole Chinese space programme. Perhaps that is the real intention of US criticism, rather than any spying capability.

What is almost never reported is that China isn’t the only one with a powerful 35 metre-diameter antenna for signal transmission and reception in the country.

As part of the European Union, the European Space Agency (ESA) operates its own powerful Deep Space Antenna in Malargüe, Mendoza province.

As reported by independent journalist Nick Corbishley, “what the US government often forgets to mention is that it and Nato are also building an observatory in Nequén, Patagonia, just miles down the road from the site for China’s”.

With at least three recent trips by Richardson to the country, including one last month, the Milei government and the US inked a deal to jointly develop a naval base in Ushuaia at the southern tip of the country, near the strategic Strait of Magellan. The Pentagon has long had several military facilities in Argentina that predate Milei.

Hambantota port in Sri Lanka

The Donald Trump presidency pioneered several key “Red Scares” and myths about China. One is genocide in Xinjiang, over which human rights lawyers at the State Department had cast doubt, but which Trump’s secretary of state Mike Pompeo formally declared to be the case during his last days in office.

Another was the debt trap at the Hambantota cargo-handling port in Sri Lanka, which has been inevitably cited as the prime example of alleged Chinese predatory lending with developing countries.

Pompeo, Trump’s vice-president Mike Pence and national security adviser H.R. McMaster helped lend credibility to the Hambantota debt trap narrative, even though independent experts have long questioned its validity.

Sri Lanka’s Hambantota port debunks Chinese debt trap narrative with success

One key claim by the trio, now known to be false, is that the 99-year lease of Hambantota port to China was a debt-for-equity deal enabling a Chinese port consortium to take ownership. In fact, we now know there was never a debt for equity swap, only an option to operate most parts of the port for 99 years, for a price of US$1.12 billion, which helped resolve Sri Lanka’s debt crisis at the time.

The debt was not swapped for Chinese ownership but merely transferred from the Sri Lanka Port Authority to the Sri Lankan Treasury, according to The Sunday Times, Sri Lanka, citing government officials.

Strategically located, the port has now become a thriving transshipment hub in the Indian Ocean. It now handles a turnover of 700,000 vehicles a month for third-country destinations, from just 100,000 a few years ago. Bunkering, or the supply of fuel for ships anchored at the port, hit nearly 600,000 tonnes last year.

The irony is that far from being a prime example of Chinese debt-trap diplomacy, the Hambantota port is turning out to be an example of Belt and Road Initiative investments that have worked to the benefit of the country concerned.

Chinese naval base in Djibouti

“China and the United States face off in Djibouti as the world powers fight for influence in Africa.”

How many times have you read such alarmist headlines about China in Africa, with the Djibouti military base, its first overseas, cited as the prime example?

The United States has more than 750 military bases around the world, in addition to other military facilities, both temporary and permanent. China? It is opening a second overseas base in Cambodia.

The latest example of this false narrative is from Tim Loughton, a hawkish British Conservative member of parliament, who was denied entry to Djibouti last month.

He claimed it was because of the Chinese influence over the country, not least because it has a big naval base there.

He wrote in the Telegraph: “In 2016 they started construction of a Chinese naval base paying rent on a long lease. 2,000 Chinese troops are now permanently stationed there, and they have built a pier big enough to accommodate Chinese aircraft carriers. But all this comes at a price [for] Djibouti.”

The reality is actually the other way around. Because of its strategic location at the Horn of Africa, Djibouti has been able to charge a premium for other countries to set up military bases or station their troops there.

It’s hard to see why China would have more influence when the US, Italy, and Japan each have a military base in the country. France has not one but two bases, while Spain and Germany have stationed regular troops there, some perhaps staying in what Loughton derisively called “the country’s most overpriced hotels”.

Rising tensions across the Middle East in recent months have made Djibouti even more important as a key hub for rich countries with naval deployments managing and protecting the main global shipment passage into and out of the Red Sea.

What of Djibouti’s external debt, of which China holds a big chunk, as Loughton has pointed out. The Chinese debt amounts to about US$1.4 billion, so it is not even on the list of 20 countries most indebted to China, according to World Bank data from 2022 published by the Visual Capitalist.

In any case, loans from the World Bank and the International Monetary Fund, and those from the international capital market dominated by Western banks, collectively far exceed China’s loans.

While Djibouti was one of many developing countries facing debt distress during the pandemic, its economic prospects have improved significantly since.

According to the World Bank, “In 2023, Djibouti experienced a robust economic rebound, driven by a 6.7 per cent GDP growth fuelled by increased port activity, particularly in container traffic, due to renewed trade with Ethiopia after a peace agreement. Despite disruptions in the Red Sea, Djibouti’s port activity continued to increase in January 2024, driven by the strong boom in transshipment activity as carriers have rapidly expanded transshipment operations in Djibouti, strategically positioned in the south of the Red Sea.

“Despite regional uncertainties and Red Sea tensions impacting customs revenue and fuel pricing, Djibouti maintained confidence in its strategic position and port complex.

“The economic outlook is promising, with GDP forecast to remain strong at 5.1 per cent from 2024 to 2026, driven by continued Ethiopian demand for transport and logistics services … Fiscal consolidation measures aim to reduce the budget deficit to 1.4 per cent of GDP by 2025-2026, with projected declines in poverty rates.”

Instead of claiming China has preponderant influence, it’s actually Djibouti that has been exploiting its greatest asset – location, location, location! – to make the great powers fight over each other for its favours.

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