KAMALIKA PIERIS

China is today the leading economic power in the world. More than half of the leading companies in the world are now Chinese. These include the technology giants known as BATS, Baidu, Alibaba, and Tencent. Alibaba is bigger than Amazon and eBay combined, observed analysts.  Alipay, the Alibaba payment system, is more sophisticated than anything in the west. Baidu is the largest search engine BATS holds stakes in 150 companies abroad. There is also TikTok.

China’s telecom company, Huawei is ahead of the products manufactured by its rivals. Huawei had 5405 patents in 2018, the largest number by a single firm in the world. Huawei is also cheaper. Huawei has a big presence in Africa, Asia, and South America. Huawei has signed 40 5G contracts around the world, including one with Britain. 

That is not all. China started the electronic bike exchange and has progressed rapidly with electronic payments. Other countries are simply playing catch-up.   Chinese satellites are the cheapest option for electronic communication providers. 72% of the global market for drones is controlled by DJI, a Chinese company.

Chinese consumers have also become globally important. They are now ‘setting the pace for global commerce’, say analysts.  Consumer product companies now find that ‘you can’t win the world if you are not winning in China.’

Chinas economic rise has challenged the USA’s economic supremacy. China is the biggest market for a range of U.S. agricultural products. The USA is China’s major trading partner. Further, the US has a persistent trade deficit and China is helping to cover up that deficit. China holds over 1.17 trillion dollars of U.S. debt.  China is the leading investor in US government bonds. China is the leading producer of rare earth minerals. These are used in the many US manufacturers. Beijing could slam every corner of the American economy, from oil refineries to wind turbines to jet engines, by banning exports of crucial minerals, said Foreign policy”.

The Chinese Yuan has been recognized as a reserve currency by the IMF. The Yuan joins the U.S. Dollar, the Euro, the Yen and British Pound in the IMF’s special drawing rights (SDR) basket, which determines currencies that countries can receive as part of IMF loans. This is an impressive achievement as the Yuan had very little credibility as recently as thirty years ago, said Kohona. China appears to be increasingly moving towards international payments in Yuan.

China is now firmly entrenched in Europe. Chinese trains travel to European capitals, including London, on the new overland Silk Route and also link up with Tehran bringing East Asian products to European markets, by-passing the bottlenecks of the Malacca Straights and Suez Canal. Chinese companies are building the rail link between the Piraeus harbour and Serbia and Hungary. Natural gas from Central Asia now flows along four pipelines to China.

China is everywhere. In Greenland, two large infrastructure projects are currently in the spotlight because of Chinese participation. Chinese construction giant China Communications Construction Company (CCCC) has put in a bid to construct and expand three new Greenlandic airports. China also wishes to move into Greenland’s mining industry. The Inuits welcome this as they are very poor, but Denmark and the UK don’t.

China is also now a staggeringly important investor. The major share of Chinese overseas investments has gone to Europe and the US, observed analysts.  The European Union, whose second-largest trading partner is China, received 35 billion euro in Chinese investments in 2016 alone. The United States has received 90 billion dollars in Chinese investments since 2007. Australia, a nervous critic of the BRI, received AUD 15.4 billion in Chinese investments involving 103 deals.

China has bought land in France, Australia, New Zealand, including wheat fields, cotton farms, cattle ranches and dozens of dairy farms. Australia has been the second major destination for Chinese investments after the United States and Europe, observed analysts.  Investors have grabbed mining interests, hotel assets, real estate, agribusiness, vineyards, healthcare, infrastructure, in Australia, giving rise to considerable anti-Asian and anti-Chinese sentiment.  Nearly 60 percent of Australia’s commodity exports go to China. China has also bought nine million hectares in developing countries.

China is now the proud owner of all sorts of foreign facilities and businesses. Toulouse airport where the Airbus is assembled is owned by Shandong Hi-Speed Group and a Hong Kong investment firm.  Piraeus harbour is now owned by Chinese companies, 70% by COSCO. The port of Melbourne is now controlled by a Hong Kong-Chinese concern. So is Darwin.  New York’s revered Waldorf Astoria is now owned by a Chinese concern. A Chinese billionaire now owns Volvo, controls Lotus and London Black Taxis. Another owns the AC Milan football club. The German robot manufacturer Kuka is now owned by a Chinese company. China also owns a number of historic vineyards and buildings, reported analysts.

China’s Belt and Road Initiative is going strong and there is a positive response.  Italy joined in April 2019. This is the first G7 country to enroll. The United Kingdom is also coming in. Philip Hammond, the British Chancellor of the Exchequer, said at the Belt and Road Forum in Beijing on April 2019 that the U.K. is committed to helping China realize its ambitious but controversial infrastructure investment project.

Though Britain, unlike Italy, hasn’t yet signed a formal memorandum of understanding to take part in the Belt and Road programme, Hammond said he will lobby for British firms to take part in Belt and Road projects, especially in finance and engineering. Standard Chartered, signed an agreement with the Export-Import Bank of China to promote Belt and Road projects.

“The Belt and Road Initiative is an economic cooperation initiative, not a geopolitical or a military alliance. It is an open and inclusive process, and not about creating exclusive circles or a China club,”  said President Xi Jinping. Kohona observed that BRI can be used to achieve prosperity, without the trappings of colonial rule and without territorial occupation, racial discrimination or forced alteration of cultures.

Economists, including those at the World Bank, agree that the recent rapid upward movement of the economies of a number of African countries has been the result of significant Chinese investments.  

Many African economies are prospering for the first time in years and analysts ascribe this development to Chinese investments in infrastructure in Africa. By 2014, that had risen more than 20-fold to 220 billion dollars, according to the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies in Washington. It increased to USD 136 billion in 2018, with USD 60 billion in the pipeline.

Leaders from several African states came to Beijing in 2018 as guests of the Chinese Government for a summit meeting. That summit was to discuss China’s massive financial investment in infrastructure projects in Africa. Chinese President reassured his guests that his country had no vested interest in the loans it gave.

China’s BRI has its enemies. In 2018, Bangladesh was forced to ban one of China’s major state firms for attempted bribery, and in the same year, Maldives’ finance minister stated that China was building infrastructure projects in the country at significantly inflated prices compared to what was previously agreed, said critics.

Kenya could lose its Mombasa Port to China along the lines of Hambantota Port in Sri Lanka and the International airport in Zambia said, critics. Kenya has obtained a loan of US$ 2.2.billion for construction of a railway track from Mombasa to Nairobi and failed to pay it back. It is also reported that Zambia has surrendered its national airport to China as it has failed to pay back a loan. This should open the eyes of the developing countries, especially those in the South Eastern Asian region, which intend to obtain loans from China, whose hidden agenda may be to gain dominance in the Asian region on the pretext of helping these countries to develop, said a Sri Lankan critic.

Unlike other international lending agencies such as the International Monetary Fund, World Bank, Asian Development Bank, and Japan International Cooperation Agency, China does not look into the financial viability and whether the country could repay the loan. This is to their advantage as when a country fails to pay back the loan, invariably the project is sold or allowed to operate as a Build Operate and Own project, continued this Sri Lankan critic.

China is also moving into global politics. It is developing allies and strengthening old partnerships. President Duterte of the Philippines, which is a US treaty ally, wished to build a closer relationship with China. He went to China and announced a separation from the USA, said analysts when he said that there were ‘three of us against the world, China, Russia, and the Philippines.  Chinese President Xi went to Moscow, on June 2019. It was his eighth visit to Russia. Xi and Putin signed an agreement to upgrade bilateral relations to a comprehensive strategic partnership of coordination for a new era.

China has also made a start as an international mediator. In 2017 Chinese Foreign Minister Wang Yi hosted in Beijing the first trilateral talks between China, Pakistan and Afghan leaders. China has succeeded in persuading Afghanistan to begin a wide-ranging dialogue proposed by Pakistan for mending strained bilateral relations, reported the media. Ministers from Afghanistan, Pakistan, and China met in Beijing on Tuesday where they agreed to work together to tackle the threat of terrorism tied to China’s vast western Xinjiang region, they said.

China is also making its mark in scientific advances. In January 2019 a Chinese spacecraft made the first landing on the far side of the Moon. China says it had launched the world’s fastest electric car as well. China has filed 53,345 patents in 2018, while the USA filed 56,142. China is a leader in Information Technology and way ahead of the USA, analysts observed. China has more high-performance supercomputers than ever before. Top500, a site that tracks supercomputer development says 202 or so of the world’s fastest supercomputers are in China, compared with 143 in the US. Two of the fastest machines, Sunway TaihuLight and Tianhe-2 (Milkyway-2) are in China. (Continued)