Thread by @EvanFeigenbaum

1. Thread ... I want to make a small China/FDI and Belt and Road comment, prompted by reading a few more pieces that dismiss the significance of the thing on grounds that China's pledges "don't add up" and its pledge numbers are "fake." This is a caveat from anecdotal experience.

2: In many places of the place where China Inc. or Chinese entities invest, I don’t think aggregate capital flows are a sufficient measure for understanding impact, real or prospective.

3: There are plenty of countries where the numbers aren’t large—and are often (much) smaller than advertised by the propaganda organs— but where China is either one of a very few outside investors or where global capital flows simply haven’t had an especially meaningful impact.

4: If you’re seeing, say, a hypothetical $150 million of Chinese FDI in XYZistan but more like $0 from anyone else except in, say, one or two extractive sectors, then the Chinese number isn’t huge but the impact *can* be for at least three reasons:

5: First reason: You can actually do quite a lot with just $150 million in XYZistan, including things that the country's elites want ... and where the public actually sees a material impact.

6: Second reason: Few other international investors are doing much of anything in XYZistan, or, as noted, they are doing things but in a couple of sectors only, often with little visible public impact.

7: Third reason: That means the *comparative* numbers, rather than the aggregate Chinese number, can tell you quite a bit about political, social, and material impact, both prospective and real.

8: It's another way to think about this, beyond just looking at a bunch of cumulative numbers, which, I agree, often do not add up. But doing this requires us to simultaneously do three things:

9: For one, it means we would need to be rather granular in terms of understanding what’s happening in individual countries rather than just in the aggregate before we are so dismissive.

10: For another, it means we should be less dismissive of China’s impact generally, for good or for ill, just because “the numbers don’t add up.” They may very well not add up and yet still amount to a good deal on the ground, with a meaningful effect on this or that in XYZistan.

11: Finally, it's why comparative thinking is more useful than weighing China's activities in a vacuum. Everything I read now declares for "competition." Good. But to compete, we can't just dismiss the other guy without reference to others. Competition means more than one player.

12: Sorry for the typos.