How does china make money off this?
China just set up it's own special economic zone in uganda. China gets legislative rights in the zone. How exactly is that going to make them money? Taxes?
Economics - 3 Answers
Random Answers, Critics, Comments, Opinions :
1 :
The special economic zone was set up by Uganda in recognition that private enterprise requires a number of laws and rules be in place to protect the rights of investors so that they are willing to invest. Often countries that are not yet ready to implement laws across the entire country that are sufficient to encourage private investment, are willing to do so in a designated zone. The fact that China gets legislative rights in the zone (something I am not aware of) would mean that China gets to implement the specific laws that they find most conducive to doing business, so I think that we can assume that the laws will be favorable in many regards. Even if Uganda retained a taxing authority outside the legislative rights, perhaps by veto rights, it would be great for China to be able to set up a system of laws and an enforcement mechanism that it was familiar with and felt was appropriate for optimizing their investments in the region.
2 :
China gets cheap and reliable supply of minerals or other raw materials from that country.
3 :
Look at Hong Kong during british rule. It's the ultimate way to build an empire. They will tax them and probably build a military base there.
