The NGO collective Forests and Finance released a new study today showing that investments by Chinese banks make it the world’s second-largest funder of projects linked to tropical deforestation.
Analyzing data from financial databases and company publications, the study found that between 2016 and 2020, Chinese banks extended about $15 billion in underwriting and loans to companies in fields like palm oil, pulp and paper, soy and beef farming, rubber, and timber in West and Central Africa, Brazil and Southeast Asia. These sectors are all seen as ‘forest risk commodities.’
Depressed yet? Wait, there’s more! While China is the second biggest investor, the telling detail is who’s number one: Brazil. The big difference is that while China financed these destructive projects all along the Belt and Road, Brazil is specializing in self-harm: most of its financing is aimed at stripping the last remaining bits of the Amazon. Keep in mind that another study recently found that over the last decade the Amazon basin released 20% more carbon than it absorbed. The days of the Amazon acting as the ‘lungs of the earth’ are officially over.
Beyond the many obvious horrors, the combination of the Brazilian and Chinese angles of this story strike me as revealing a massive lack of imagination. Tropical forests are treasure troves filled with future pharmaceuticals, superfoods, wellness aids and so forth. Yet both China and Global South governments like Brazil’s are so stuck in the 20th century that all they can see are paper pulp and palm oil. It’s the same dunderheaded mindset we’re seeing in Ghana’s (also Chinese-funded) $2 billion bauxite-for-infrastructure deal, the equivalent of dismantling a brand new Ferrari and selling the parts to buy a 2002 Honda Accord.
In a different newsletter intro, this is the moment when the author would call for China to comply with ‘global’ (read Western) standards. But that’s exactly the problem. This lack of imagination in finding ways to profitably sustain intact environments is fundamentally rooted in how Western colonialism and neo-colonialism saw the world. It’s not that different from how American companies paved Liberia in rubber plantations during the Cold War (and now).
Both China and most governments of the Global South have so completely internalized this worldview that to talk about their developmental relationship as somehow a break from 20th century business-as-usual is absurd. At the same time, it’s not like rich democracies are escaping: yet another study recently found that 69% of all funding to Australian political parties (conservative and liberal alike) came from one industry: coal. As a result, rural Australian ecosystems are falling victim to the same worldview as their counterparts in Ghana and Brazil.
When it turns out that China is funding any particular instance of destruction (as will probably happen with the new Forests and Finance report) it inevitably becomes news, because Western actors are so desperate to push a narrative of China being uniquely terrible. But that’s the point: there’s no uniqueness here. Instead the interactions between Global South governments and their financiers, be they Chinese or Western or local, are just the same old thing.
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