Is China slowly controlling sensitive regions?

[Carlos G.]

Friends,

I open this thread for us to debate the role China is playing in the world, step by step. I've read some reports of what this nation is slow but steadily doing in Africa, now it seems they are getting into latin America as well. Which means: what this nation needs in resources and raw-materials it is getting more and more by giving political approval to dubious regimes (Angola, Nigeria, Venezuela), on the other hand it is "exporting" into Africa quite a few of its own citizen to work there to build up infrastructures and grow much needed agricultural goods.

Here in Portugal the chinese community is big enough to make TV news with their New Year celebrations (which this year are coincident with Carnival)...

[FrankM]

Yes, I think so. Everybody is talking about the Iran or North Corea ... but China is that one country to me that has the potential of becoming a major issue for everybody world wide.

More than one *billion* people are walking fast forward. They work hard and want more. More, more, more. They are buying cars like hell. Their thirst for more oil is incredible. They are already by now suffering from heavy pollution and it's getting worse by the day. Their financial system is highly unstable (although that of the Western world too ...) they are facing social problems and and and. And they won't just sit there and wait for things to happen. I hope Elwood will find his way here ....

[ZeroAltitude]

And they get slowed down to an almost grinding stop when some snow falls ...

[David Hilditch]

It didn't receive much publicity, but about 2 months ago the World Bank came out with a report, based on serious economic analysis, that the Chinese economy is 40% smaller than previous figures have made out. I won't go into the technicalities here, but that's a massive reduction with considerable implications about Chinese economic power. The Chinese certainly have a huge demand for raw materials, hence their reach for influence around the world, but cheap exports from China to the rest of the world have really just given us all a free lunch in recent years. That may or may not continue, but the American economy is still so influential and powerful that a recession in the US still causes the world's markets to tumble, something I am sure the Chinese take into account.

[Kiwi Steve]

A LOT of my work in the past 6 months or so has had me shuttling between West Africa (Nigeria, Ghana, Cote D'Ivoire etc...) and China.

Almost every flight I've been on has had trade delegates, ministers, movers/shakers etc... from either end on board. There's massive deals being made and a fat pile of cash being made.
The guys I take through both West Africa and China tend to be based out of the UAE and Saudi and are also making equally big deals from both sides.
Another telling clue is the fact that the USD is no longer the only currency people want to use in Nigeria

[David Hilditch]

.....Another telling clue is the fact that the USD is no longer the only currency people want to use in Nigeria

The authorities collecting tickets at the Taj Mahal no longer accept dollars for admission - it's local currency only. The dollar is in retreat for sure - damn it, even in New York City a few retailers and service providers even have signs that they accept euros. Imagine that a few years ago. But that's not the end of the American republic. There are currently 1 million people lining up for naturalization papers, and I still maintain that an American recession will cause the world some disruption.

For sure, China is having an influence across the world it has never had, certainly since Marco Polo's time, and it will clearly continue to do so. I do think some of China's financial, economic, social and environmental problems will not sustain the current levels of growth for ever.

[Carlos G.]

Not forever, sure, but if China keeps growing at, say, 10% p.a. it continues on the path of becoming an economical nation we haven't had before. And you know as well as me, David, that this means also a growing political (and military) influence. And it means that its methods of growth will allow them most likely types of benefits the western nations of the world can't cope with (no democratic rules, no real worker's unions, little social benefits for its population, "export" of challenging groups of population into other areas of the world (mainly Africa) and - when needed - a "discipline" no other nation can cop with. It's a pity Elwood isn't here with us, he worked there long enough to give us real insights but my work mates are in China every month and I hear enough direct accounts of what they see, hear and feel there. As well as in India, but this nation would lead us to an OT here now.

My fear is that China's real strength (apart from its inner economical potential) is its acceptance of dictatorial regimes elsewhere in the world and that they will be able to get business deals we westerners are not willing to do due to human rights problems. Maybe China's inner economy is presently 40% less than what was thought. And? My concern is not the present, this one we know already, my concern are the multiple tentacles it has already throughout the globe and this will have its effects only in the future.

[David Hilditch]

My fear is that China's real strength (apart from its inner economical potential) is its acceptance of dictatorial regimes elsewhere in the world and that they will be able to get business deals ......

No change there then. Isn't that what the US has been doing for 60 years ?

[Carlos G.]

My fear is that China's real strength (apart from its inner economical potential) is its acceptance of dictatorial regimes elsewhere in the world and that they will be able to get business deals ......

No change there then. Isn't that what the US has been doing for 60 years ?

Correct. But I think while the US got too much involved in the political issue of most of these countries, China is taking another approach, sort of "You make the politics, we make the deals, you get your money, we get the goods" and stay overall much more low profile than the US have done (and now get the pay for it).

[Thunder Down Under]

I see the Chinese have just bought a 12% stake in Rio Tinto. Seems they might be worried about a merger between Rio Tinto and BHP.

TDU

[Carlos G.]

I see the Chinese have just bought a 12% stake in Rio Tinto. Seems they might be worried about a merger between Rio Tinto and BHP.

TDU

I don't know if they're worried, they just buy selected stocks before they rise, be it banks (like the Australian and New Zealand) or raw materials. They may start with something like 10% but I'll bet with you in 5 years time it will be 25% a least...

[Schorsch]

Not forever, sure, but if China keeps growing at, say, 10% p.a. it continues on the path of becoming an economical nation we haven't had before. And you know as well as me, David, that this means also a growing political (and military) influence. And it means that its methods of growth will allow them most likely types of benefits the western nations of the world can't cope with (no democratic rules, no real worker's unions, little social benefits for its population, "export" of challenging groups of population into other areas of the world (mainly Africa) and - when needed - a "discipline" no other nation can cop with. It's a pity Elwood isn't here with us, he worked there long enough to give us real insights but my work mates are in China every month and I hear enough direct accounts of what they see, hear and feel there. As well as in India, but this nation would lead us to an OT here now.

My fear is that China's real strength (apart from its inner economical potential) is its acceptance of dictatorial regimes elsewhere in the world and that they will be able to get business deals we westerners are not willing to do due to human rights problems. Maybe China's inner economy is presently 40% less than what was thought. And? My concern is not the present, this one we know already, my concern are the multiple tentacles it has already throughout the globe and this will have its effects only in the future.

Although I agree that China is making its way into the top, we will have to wait and see what kind of political and military consequences arise from that. The Chinese senior leadership has done well in putting its military priorities low. As long as there is no direct thread, there is no need to invest in large scale. After all, starting now to do power projection and big military procurement campaigns is the best way to slow down growth.
Despite all relative growth the absolute wealth is still pathetic. Although many Chinese seem to accept that (or put it this way: nobody asks them for their opinion), it reminds us that many amenities we take for granted are still out of reach for large (>90%) of the Chinese population and will remain so in the near future. A growth in wealth for anything but the upper 5% would kill the Chinese growth right away, as growth currently relies on the productivity of the increasing number of poorly paid (even for Chinese standards) factory workers.

It didn't receive much publicity, but about 2 months ago the World Bank came out with a report, based on serious economic analysis, that the Chinese economy is 40% smaller than previous figures have made out. I won't go into the technicalities here, but that's a massive reduction with considerable implications about Chinese economic power. The Chinese certainly have a huge demand for raw materials, hence their reach for influence around the world, but cheap exports from China to the rest of the world have really just given us all a free lunch in recent years. That may or may not continue, but the American economy is still so influential and powerful that a recession in the US still causes the world's markets to tumble, something I am sure the Chinese take into account.

David,
you think you can link that report if it is in the public domain. Anyways, the gross domestic product is hardly comparable to ours. The thing is that ours (especially in case of Germany) is basically spent before it is earned due to raising costs in health care and retirement.

[David Hilditch]

David,
you think you can link that report if it is in the public domain. Anyways, the gross domestic product is hardly comparable to ours. The thing is that ours (especially in case of Germany) is basically spent before it is earned due to raising costs in health care and retirement.

Some of it is proprietary, but you can start here.....:

http://web.worldbank.org/WBSITE/EXTERNA ... 65,00.html

It's not a matter of directly comparing GDPs, or even GDPs per capita. The key is understanding the purchasing power parity concept. It may mean the yuan is not as undervalued as some people think, but there will be others who won't agree.