Wednesday, February 3, 2010

China Developing New Foreign Policy

As a rising superpower, China is branching out its foreign relations policies to unexpected places. China recently promised a $1billion loan to the former Soviet state of Moldova, a nation that is poorer than most African countries. The $1billion loan is the equivalent of one tenth of Moldova's GDP.

It is an interesting place to be investing such a large sum of money into, as on the surface it doesn't seem to have all that much to offer. What the country does have though adds up to enough reason for China to take interest. Moldova sits up in the top half of nations ranked for information technology potential by the World Economic Forum; China sees that by giving loans to nations such as Moldova they gain a substancial amount of global influence, especially pertaining to Russia. By building substancial influence in the nations surrounding Russia the Chinese are able to gain leverage in negotiations with Moscow, something of great importance to the Chinese because of China's dependency on Russian oil.

China could also focus on Moldova's agriculture, wine and textile sectors. These sectors and the country's comparatively low wages have already attracted a series of European manufacturing companies. It is also highly unlikely that the nation will ever join the EU due to weak governance.

It appears that China could gain from investing heavily in this tiny nation.

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