Showing posts with label IMF. Show all posts
Showing posts with label IMF. Show all posts

Friday, May 11, 2018

What does China want? - Shaun Rein

Shaun Rein
China is adamant when it says it does not want to replace the United States as an international player. But what does it want, asks The Diplomat Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order. " Many nations feel Western, historically ethnically white nations have an outsized say in institutions like the World Bank or IMF and feel the U.S. contains their growth."

The Diplomat:
Describe the core construct of China’s new world order. 
American policymakers need to understand China is not looking to challenge and replace the American-led world order as the Soviet Union wanted during the Cold War. President Xi wants China to have a greater say in international affairs that an economic power of China’s size deserves. Many nations feel Western, historically ethnically white nations have an outsized say in institutions like the World Bank or IMF and feel the U.S. contains their growth. 
By launching initiatives like One Belt, One Road [OBOR] and using economic carrots and sticks with other nations, China hopes to gain more influence. Worried about President Trump upending long-term alliances and relationships, many nations like the Philippines are moving closer to China’s orbit and benefiting from China’s economic largesse. However, such economic carrots come with a price — adherence to China’s political aims and loss of political independence. Like it has done with South Korea, Norway, and Mongolia, China will punish nations that cross it politically by stopping trade and by using the state-owned media to rally consumers to boycott brands. 
Explain how China’s innovation and investment strategy shapes China’s world order. 
China uses economic carrots like low interest loans and infrastructure investments to curry political favor from nations in a divide-and-conquer plan. For example, many ASEAN nations criticize China for its reclamation of islands in the South China Sea which many countries view China using as unsinkable destroyers in the event of war. 
To blunt criticism, China essentially buys support from nations like Laos and Cambodia by showering them with low interest loans and infrastructure projects. In return, Cambodia mutes criticism of China in ASEAN pronouncements. There is clearly a quid pro quo deal in place. 
China uses similar strategies in Europe with Hungary and Ethiopia in Africa. For example, earlier this month every European nation ambassador in China except for Hungary signed a letter criticizing China for not opening up projects enough for foreign firms in the One Belt, One Road initiative. Most likely China will dole out economic benefits to Hungary in the coming months in a similar to way that it opened up 12 direct flights for Ethiopian Airlines to China, just weeks after Ethiopia publicly supported China while other African nations were criticizing it, making that country’s national carrier the main hub for Africa-China flights.
More at the Diplomat.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on China's international expansion? Do check out this list.

Monday, July 18, 2016

China will stay open for international business - Tom Doctoroff

Tom Doctoroff
Tom Doctoroff
Worries are mounting about China´s international stance, and increased difficulties foreign companies and organization experiences in the country. But China is unlikely to follow a course to isolationism and will act pragmatic, writes China veteran Tom Doctoroff in the Huffington Post.

Tom Doctoroff:
Despite recent belligerence, China has rejected isolationism. It has assiduously pursued leadership roles in multinational organizations such as the World Health Organization, the G20, the World Economic Forum and, most recently, the International Monetary Fund. The “One Belt, One Road” is development strategy and framework proposed by President Xi that focuses on connectivity and cooperation among countries primarily between the the PRC and Eurasia.
In return, many overseas companies, from mobile phone and auto manufacturers to airlines and hotels, have achieved sustainable profits and broad scale in the mainland market. Compared to Japan, regulatory hurdles are simpler, although still opaque and, according to the America Chamber of Commerce, becoming more onerous since 2013. Still, on the street and in the lanes, foreigners’ are surprised by the friendliness and openness of ordinary Chinese. Eyes are bright, thirsty for knowledge.
However, multinational engagement - economic, political or social - is über-practical and sharp-edged. Joint ventures are meticulously negotiated; contracts demand technology transfer to domestic partners. Affairs between foreigners and locals are rooted in material gain, not romantic satisfaction. Casual chats are English practice; American Chamber of Commerce “mixers” are for networking, not finding friends.
The pragmatism inherent in China’s broadened worldview is reflected by a new passion for travel. According to the Chinese Tourism Authority, outbound departures reached 120 million in 2015, up thirteen percent year-on-year. Despite limited incomes, figures will continue to skyrocket. But the Chinese do not travel to discover cultural riches. Expensive hotels and restaurants are unnecessary extravagances, indulgences that yield no return. The real motivation is buying luxury brands. According Global Refund, a company specializing in tax-free shopping for tourists, in 2015, the Chinese account for fifteen percent of all luxury items purchased in France but less than two percent of its visitors. Trips to Paris and London are expensive but they are not sunk costs; they are status investments. They reinforce identification with a sophisticated middle class lifestyle. Today’s Chinese “collect destinations” and post them on micro-blogs as ego puppy uppers and use social network platform to convert “experience” into social currency.
More in the Huffington Post.

Tom Doctoroff is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you interested in more stories by Tom Doctoroff? Do check out this list.