The struggle to reform China’s economy

Date: 21-02-2019
Source: The Economist

How Xi Jinping could both calm the trade war and make China richer

For the past two weeks Chinese and American negotiators have been locked in talks in Beijing and Washington to end their trade conflict before the deadline of March 1st, when America will ratchet up tariffs on Chinese goods or, perhaps, let the talks stretch into extra time. Don’t be distracted by mind-numbing details on soyabean imports and car joint-ventures. At stake is one of the 21st century’s most consequential issues: the trajectory of China’s $14trn economy.

Although President Donald Trump started the trade war, pretty much all sides in America agree that China’s steroidal state capitalism makes it a bad actor in the global trading system and poses a threat to security. Many countries in Europe and Asia agree. At the heart of these complaints is the role of China’s government, which funnels cheap capital towards state firms, bullies private companies and breaches the rights of foreign ones. As a result, China grossly distorts markets at home and abroad.

The backlash is happening just as China’s model of debt, heavy investment and state direction is yielding diminishing returns. Growth this quarter may fall to 6%, the worst in nearly three decades. Many suspect that the true figure is lower still. By opening the economy and curbing the state, Xi Jinping, China’s autocratic leader, could boost performance within China’s borders and win a less hostile reception beyond them. He is loth to limit the power of the government and the party, or to accept American demands. But China’s path leads to long-term instability.

Löst China die nächste Finanzkrise aus?

China versucht, Entwicklungsländer und deren Rohstoffquellen durch forcierte Kreditvergaben unter seinen Einfluss zu bekommen. Der IWF fürchtet, dass intransparente Kreditvergabe Schwellenländer in Zahlungsnot bringt.

In vielen Entwicklungsländern hätte die Verschuldung ein nicht mehr tragbares Ausmaß erreicht, meinte Lagarde – und forderte China auf, dem sogenannten Pariser Club beizutreten. 

17.02.2019 um 18:04, diepresse.com

München/Wien. Der chinesische Scheckbuchimperialismus, mit dem Peking seinen politischen Einfluss vor allem in Afrika und Osteuropa, aber auch in Südamerika rasant ausbaut, macht nun offenbar auch den Internationalen Währungsfonds (IWF) nervös: Dessen Chefin, Christine Lagarde, hat bei der Münchner Sicherheitskonferenz am Wochenende vor einer neuen, von den Schwellenländern ausgehenden Finanzkrise gewarnt, deren Auslöser die intransparente Kreditvergabe durch China sein werde.

In vielen Entwicklungsländern hätte die Verschuldung ein nicht mehr tragbares Ausmaß erreicht, meinte Lagarde – und forderte China auf, dem sogenannten Pariser Club beizutreten. Das ist ein informelles Gremium, das Transparenzregeln für die Vergabe staatlicher Kredite festlegt und im Fall der Uneinbringlichkeit solcher Kredite tätig wird.

In the future, Eurasia will rule the world

Date: 07-02-2019
Source: The Economist

But China won’t have everything its own way, say three stimulating new books

The New Silk Roads. By Peter Frankopan. Knopf; 336 pages; $26.95. Bloomsbury; £14.99.

The Future is Asian. By Parag Khanna. Simon & Schuster; 448 pages; $29.95. Weidenfeld & Nicolson; £20.

Belt and Road: A Chinese World Order. By Bruno Maçães. Hurst; 224 pages; $29.95 and £20.

Asked how he came to write “The Lord of the Rings”, J.R.R. Tolkien replied: “I wisely started with a map and made the story fit.” And so, says Bruno Maçães, when imagining new realities it is natural to begin the same way. These days a revised map of the world might have a radically different focus from previous ones—because a vast, integrated Eurasian supercontinent is proving to be the salient feature of an emerging global order.

Reports of Belt and Road’s Death Are Greatly Exaggerated

Date: 30-01-2019
Source: Foreign Affairs By Nadège Rolland

Don’t Underestimate China’s Resilience

With the vast, ambitious investment project known as the Belt and Road Initiative (BRI), China meant to pull the world closer, making itself the political and economic center of gravity for more than 60 countries within the project’s sweep. But domestic and international opposition to the initiative has mounted in the five years since President Xi Jinping announced its start. Intellectuals within China have expressed concerns about wasteful spending and overstretch. Several governments that were initially enthusiastic about Chinese investment have faced popular backlash to the terms of the loans and the potential for corruption. And the United States has recently joined countries in Europe and the Indo-Asia-Pacific region in an effort to counter the Chinese endeavor with an alternative investment scheme.

Instead of expanding its “circle of friends” and gaining influence, China seems to have done the opposite, spurring a group of disgruntled countries to band together to resist its predatory practices. Some observers claim that the Chinese leadership fails to understand the dynamics that have led other countries to push back and that this blindness increases the likelihood that Xi’s “project of the century” will soon become a fiasco. 

Growing might: China plans the biggest garden show ever

Date: 05-01-2019
Source: The Economist

Celebrating one-party rule with a display of flower power

Beyond the Great Wall and the chain of rugged hills through which it snakes, workers are putting the finishing touches to a colossal edifice. The beams of its roof are curved, with golden tiles reminiscent of those that adorn the Forbidden City, 70km to the south-east. The building itself curves, too, in a shape that its architects say resembles a ruyi—a traditional Chinese talisman (pictured is an artist’s impression). They say it invokes a longing for fulfilment of the “Chinese dream”. That is a cherished slogan of China’s leader, Xi Jinping, whose wish is that China should emerge as a global giant. As a state news agency puts it, the building conveys the “imposing manner of a great power”.

The China Pavilion, as the structure is called, is for an international flower festival in Yanqing, a satellite town of the capital. The show will open on April 29th and last for more than five months. It will be the biggest expo of any kind that China has staged under the aegis of the Paris-based Bureau International des Expositions since the Shanghai World Expo in 2010. It will be the biggest horticultural one ever held anywhere. And it will be the centrepiece of the largest political celebration in China in a decade: the 70th anniversary of the founding of the Communist state. The big day itself will be on October 1st, as the flower show enters its final week.

2018’s Biggest Loser Was the Liberal International Order

Date: 31-12-2018
Source: The Wall Street Journal By Walter Russell Mead
Subject:The runners-up are China, the U.K., France’s Macron and Saudi Arabia’s Crown Prince Mohammed.

It’s been a year of tumult and chaos in world politics. In Japan, a national poll selected the kanji character sai, meaning disaster, as best reflecting the national mood. Perhaps 2019 will bring better news. In the meantime, here are the states, individuals, institutions and ideas that were 2018’s biggest losers. Next week: the winners.

• China’s Belt and Road Initiative. In 2018 Beijing began to learn how hard it is to build an international system. The BRI isn’t only a massive infrastructure project intended to build an integrated commercial area centered on China; it is an attempt to translate China’s economic might into geopolitical power.