The rise of the Chinese economy: Part Three


CHINA is fast overtaking the US in terms of world influence, economy-wise.
The total US debt to creditors is almost US$19 trillion.
For some time now, China has actively partaken in buying US debt through government bonds.
They amount to almost US$1,5 trillion out of the US$6 trillion US debt owned by foreigners.
China became the biggest foreign creditor to the US in 2008. The US Government is largely reliant on this form of revenue which allows businesses loans for capital.
If the Chinese Government cashes in on the debt they have bought from the US, by essentially selling US Government bonds, the US economy will lose money and the nation would undoubtedly collapse.
A Government bond is a loan to the US Government which gives interest to whoever buys and redeems it.
Thus, China enjoys great diplomatic and trade leverage against the US.
Financially, China now has a lot of power over the US.
If conflict is to arise between the US and China, as in the days of Clinton when they almost went to war over Taiwan, China is bound to have an upper hand this time around.
This is because China is behind the spending power of the US Government and is behind making affordable goods available for US consumers.
If US-China economic ties are disturbed, it is the US that is likely to suffer the following consequences; removal of capital from the system, the freezing of credit in the economy, the sharp rise of commodity prices and ultimately the closing of businesses and job losses.
This will mean another great depression or recession for the US economy.
The Chinese are now taking over projects, industries and other businesses formally owned by European settler-groups in Africa and other former European colonies.
This is because European settler-groups were not concerned with developing the nations they colonised, but simply looting raw materials and making profit by selling finished products in the West and even Africa.
Many places in Africa have thus not seen any notable development since the times of independence.
The Chinese are known to be practical and business-minded people.
Their goods and services are often reasonably priced and for that reason, the Chinese are fast overtaking the West as the biggest trade partners with Africa.
The Chinese also do not get directly involved in host countries’ politics.
This is unlike the West which opens, suspends or closes businesses according to how favourable or unfavourable they feel a regime or ruling by African leaders is to them.
For example, when Zimbabwe, under former President Robert Mugabe, was put under trade sanctions by the US and Europe for land reacquisition, Western companies strategically closed several times to destabilise the country.
Such deeds have made the West infamous in the eyes of Africans and the Chinese approach of ‘your money talks and no strings attached approach’ is gaining favour with African, Asian and South American governments.
In Zimbabwe, Western food products such as lunch bar chocolate, potato chips and so on are now resurfacing, thanks to the Chinese.
Goods from China, particularly clothing, household electric gadgets, solar equipment, gas tanks and stoves are all over the domestic market.
China has become a more important and strategic trade partner to Africa than the US and Europe in a very short space of time.
Even in south-east Asia, China is making a mark in opening factories.
Initially, these were opened by the West which produced clothing, among other things.
Nowadays, the Chinese are competing heavily with Western-owned factories.
Places like the Philippines are partnering China to share trade zones and co-operate with each other in governing shared resources like the Pacific Ocean and its islands.
This role was previously taken by the US which has interfered in the region since the defeat of Japan after the Hiroshima and Nagasaki atomic bombings.
The US continues to meddle in the Pacific area though it is a great distance away.
They are often at odds with China and North Korea because they go as far as undertaking military operations with Japan, which they have subtly colonised, and South Korea, which they deny rejoining with North Korea because they are anti-communist.
Negative propaganda about China by the US was, and continues to be, spread in former Japanese territories that were inherited by the US.
They are called ‘friendly nations’ but are functionally colonies that follow the dictates of the US.
Among them, South Korea and Japan have the highest US presence and this is considered a threat and destabilising agent in the region.
China is now being embraced by members of the region because it does not meddle in domestic politics.
It is also more qualified and justified as a member of the region to meddle in regional affairs than the US.
Thus China is gaining more acceptance as a trade partner and ally in south-east Asia than it previously did.
China’s successes are not limited to places outside the West.
In the US, China has successfully bought out a lot of large businesses.
In March 2010, Chinese car making company Zhejiang Geely Holding Group purchased Volvo company.
Volvo was previously owned by the Swedish under Ford.
Ford had bought Volvo for US$6,4 billion but the Chinese only purchased it for US$1,8 billion.
Since then, Volvo has had a separate management group based in Sweden and is no longer under the US or Ford.
Similarly, the Chinese shocked the world by buying Walmart, the largest retail store in the world.
At the time of its acquisition, US Arkansas-based Walmart had 8 500 stores functioning.
China received Walmart after a swap was made for the US to relieve their debt owned by China.
Walmart had outstanding stock which the Chinese found to be as profitable as the US federal debt they owned and thus they agreed to the swap.
China was also offered Goldman Sachs and General Electric but they refused and called them ‘criminal organisations’.
Disney World and General Motors (GM) were also offered to the Chinese by the US in an effort to relieve their debt.
These have since made a notable presence in China where GM cars and Disney outlets can be found in places like Shanghai.
Mount Rushmore and the sports franchise called New York Mets are other examples of US-owned companies that were offered to China.
This is testimony to China’s great economic influence on the international scene.


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