China, the New World Banker
Written by Alfonso Elizondo
Just after the end of World War II, the United States became the great power of the West as the fight against the Axis Powers and their closeness to Germany greatly undermined France and Great Britain which until then had been dominant in terms of the economy and military power. It was then that the United States positioned itself as the maximum leader of the liberal nations against the USSR. Then in 1991, with the end of the ‘Cold War’, the existing bipolar world gave way to the total hegemony of the United States.
While much of the world had its eyes on these two powers, China initiated a process of internal reforms that would sustain its current great strength. In 1978 Deng Xiaoping introduced a policy based on the ‘Four Modifications of Zhou Enlai’ that included 4 sectors: agriculture, industry, technology and defense. Another important turning point was the year 2001, when China joined the WTO (World Trade Organization).
In addition to the changes in economic policy, there were other factors that allowed China to maintain its growth until it became the second world power after the United States. Among these factors was the reality that China was the country with the highest population in the world, with almost 1.4 billion people, unlimited cheap labor, a great capacity for work and increasing productivity.
At the same time, exports and foreign investment were essential to maintaining production and employment levels in manufacturing industries. So now China has been the largest exporter of products in the world since 2008. This is added to the fact that since the beginning of the century, foreign investment has facilitated learning in the field of technology so that Chinese products could compete and so they gave a significant boost to the official foreign exchange reserves.
Equally important has been the role of consumption and investment in pushing China to position itself internationally, and in 2007 its volume of consumption exceeded its investment for the first time. Since then, China has been experiencing a transition from a producer to a consumer country at a very fast pace due to the greater purchasing power of its people.
Despite widespread consumerism that is growing at high speed, China has one of the highest savings rates in the world (45%) behind only Suriname and Singapore. Among these investments, the real estate sector stands out. For its part, the pace of construction is so fast that many workers sleep in their place of work. This is due to the massive migration of young people desperate to find work in the cities, the growing purchasing power of a large part of the population looking for a new home and the large number of Chinese millionaires investing in the real estate sector, which causes demand to increase every day.
Thanks to foreign investments, the official foreign exchange reserves boosted Chinese investment abroad without having to rely on tariff protections or military conquests, as done in the eighteenth century by Britain and France. So the Chinese chose trading leverage, commodity exchange, monetary loans and non-interference in the internal affairs of their partners to define their new international relations.
Among the main Chinese investments 3 projects stand out as a demonstration of their financial capacity. In 2016, China was already the second country in the world with the most international reserves in US dollars. Its geopolitical interests have been apparent since 2013, with Jingping following the dynamics initiated by Hu Jintao and creating the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB) and the Silk Road Fund.
Addendum: In Part II I will try to continue looking at the process used by China to control the entire world without the use of military force and with an encrypted mentality of sinister domination.
Just after the end of World War II, the United States became the great power of the West as the fight against the Axis Powers and their closeness to Germany greatly undermined France and Great Britain which until then had been dominant in terms of the economy and military power. It was then that the United States positioned itself as the maximum leader of the liberal nations against the USSR. Then in 1991, with the end of the ‘Cold War’, the existing bipolar world gave way to the total hegemony of the United States.
While much of the world had its eyes on these two powers, China initiated a process of internal reforms that would sustain its current great strength. In 1978 Deng Xiaoping introduced a policy based on the ‘Four Modifications of Zhou Enlai’ that included 4 sectors: agriculture, industry, technology and defense. Another important turning point was the year 2001, when China joined the WTO (World Trade Organization).
In addition to the changes in economic policy, there were other factors that allowed China to maintain its growth until it became the second world power after the United States. Among these factors was the reality that China was the country with the highest population in the world, with almost 1.4 billion people, unlimited cheap labor, a great capacity for work and increasing productivity.
At the same time, exports and foreign investment were essential to maintaining production and employment levels in manufacturing industries. So now China has been the largest exporter of products in the world since 2008. This is added to the fact that since the beginning of the century, foreign investment has facilitated learning in the field of technology so that Chinese products could compete and so they gave a significant boost to the official foreign exchange reserves.
Equally important has been the role of consumption and investment in pushing China to position itself internationally, and in 2007 its volume of consumption exceeded its investment for the first time. Since then, China has been experiencing a transition from a producer to a consumer country at a very fast pace due to the greater purchasing power of its people.
Despite widespread consumerism that is growing at high speed, China has one of the highest savings rates in the world (45%) behind only Suriname and Singapore. Among these investments, the real estate sector stands out. For its part, the pace of construction is so fast that many workers sleep in their place of work. This is due to the massive migration of young people desperate to find work in the cities, the growing purchasing power of a large part of the population looking for a new home and the large number of Chinese millionaires investing in the real estate sector, which causes demand to increase every day.
Thanks to foreign investments, the official foreign exchange reserves boosted Chinese investment abroad without having to rely on tariff protections or military conquests, as done in the eighteenth century by Britain and France. So the Chinese chose trading leverage, commodity exchange, monetary loans and non-interference in the internal affairs of their partners to define their new international relations.
Among the main Chinese investments 3 projects stand out as a demonstration of their financial capacity. In 2016, China was already the second country in the world with the most international reserves in US dollars. Its geopolitical interests have been apparent since 2013, with Jingping following the dynamics initiated by Hu Jintao and creating the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB) and the Silk Road Fund.
Addendum: In Part II I will try to continue looking at the process used by China to control the entire world without the use of military force and with an encrypted mentality of sinister domination.