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If this plan is put through, it will make the bankers of the consortium the virtual owners of China; and among these bankers, those of the United States are the only ones who are prepared to take full advantage of the situation.
Aware of this encroaching "economic imperialism", privatization deals with German firms are being voted down throughout the region. In November, the sale of a majority stake in Cesky Telecom to a consortium led by Deutsche Bank collapsed. In Poland, a plan to sell Stoen, Warsaw's power utility, to Germany's RWE was scrapped. But these are temporary and often reversible setbacks.
The idea of territorial partitioning of the country was replaced by an attempt at financial exploitation; military friction between the Western powers and Japan was in this way to be minimized. Financial control was to be exercised by an international banking consortium . It was necessary for political reasons that this committee should be joined by Japan.
Russia and Japan, who had hitherto not been parties to the official consortium, perceiving that participation had become a political necessity, now demanded a place which was grudgingly accorded them; and it was in this way that the celebrated six-power Group arose. It was round this group and the proposed issue of a £60,000,000 loan to reorganize Chinese finance that the central battle raged.
Peking, the most fundamental objection I heard brought by Chinese against the Consortium was in effect as follows: The republican revolution in China has still to be wrought out; the beginning of ten years ago has been arrested. It remains to fight it out.
This raises the financial problem, which is very difficult, because foreign Powers will not lend except in return for some further sacrifice of the remnants of Chinese independence. X., I do not accept the statement by the American consortium bankers that a loan from them would not involve control over China's internal affairs.
We are engaged in a continuing dialogue with the Pakistan government concerning its development and security requirements and the economic burden imposed by Afghan refugees who have fled to Pakistan. We are participating with other aid consortium members in debt rescheduling and will continue to cooperate through the UNHCR in providing refugee assistance.
Such an involvement would at once lessen a present large asset in China, aloofness from internal intrigues and struggles. The specific protests of Chinese in this country mainly Cantonese against the Consortium seem to me mainly based on misapprehension. But their general attitude of opposition nevertheless conveys an important lesson.
At the risk of being charged with credulous gullibility, or something worse, I add that up to the present time the American phase of the Consortium hasn't shown perceptible signs of becoming a club exercised by American finance over China's economic integrity and independence.
But it was impossible for any one to make head or tail out of this welter of interest, commissions, indemnities, and usury. Herr Carovius himself no longer knew precisely how matters stood; for a consortium of subsequent indorsers had been formed behind his back, and they were exploiting his zeal on behalf of the young Baron for all it was worth.
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