Showing posts with label World Bank. Show all posts
Showing posts with label World Bank. 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.

Saturday, July 11, 2015

Why the World Bank was wrong on China - Sara Hsu

Sara Hsu
Sara Hsu
A critical report of the World Bank on China got quite some media attention. That storm only became heavier after the report was removed from its website. Financial analyst Sara Hsu explains in the Diplomat why the World Bank was wrong to start with.

Sara Hsu:
The points that the controversial section of the report made do have some merit: China’s financial sector is indeed in need of further reform, there is no doubt about that. As the recent severe stock market downturn and the real estate price dive before that have revealed, volatility and excess demand for financial investment present serious problems in the economy right now. The constrained banking system, dominated by the state sector, provides insufficient funds to borrowers and insufficient yield to depositors, failing to embrace market forces. Issues in the banking sector have presented problems in China for decades. 
However, China’s financial sector has been able to overcome its debt and regulation problems precisely with strong government intervention. The presence of the government has implied that Beijing is willing to backstop certain debts and implement regulations or mandates as needed. To a great extent, the financial system would not be able to function this smoothly without government participation. While moving toward a market-based system with proper risk controls in place would greatly benefit China’s financial system, it cannot reasonably argued that China’s slow financial reform process will reverse decades of growth as the World Bank report had claimed. 
Reforms in the financial sector will take some time to implement, since currently, China’s leadership has its hands full, and is perhaps attempting to pull off too many market interventions and reforms at once. The real economy is down, and the financial economy, in particular the stock market, is also on the decline. New sources of growth are not on the horizon, manufacturing and services growth have slowed, and jobs for new university graduates have been increasingly difficult to come by. When and whether China can pull off its extensive list of targeted reforms is increasingly uncertain. 
China’s leadership has embraced declining growth figures as the “New Normal,” something that it had years ago predicted would occur. Although the downturn of the real economy and the sharp asset price declines cannot be viewed as intentional, they have been accepted and are being dealt with by the state bodies. Certainly it is true that China’s financial sector needs an overhaul, but it is not in jeopardy as some have implied. Rightly, the inflammatory text in the World Bank report was removed not only because it was emphatic, but also because it was problematically hyperbolic.
More in the Diplomat.

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

Are you looking for more stories by Sara Hsu? Do check out this updated list.  

Thursday, May 08, 2014

China getting big is just a matter of time - Arthur Kroeber

Arthur Kroeber
Arthur Kroeber
China has strongly resisted a claim by the World Bank that is had surpassed the economy of the US in PPP terms. Just a matter of time, says economist Arthur Kroeber. China will have to accept it will be the largest, he says in Radio Free Asia.

Radio Free Asia:
But others say it shouldn't come as a surprise that China would soon overtake the U.S. in sheer economic size.

"If one doesn’t accept the current PPP conversion rate, then just wait five or ten years and China will be bigger at market exchange rates," said Arthur Kroeber, Managing Director of GaveKal Dragonomics, an independent global economic research firm, and Editor of its journal, China Economic Quarterly.

"But basically, all that this shift tells us is that China has way more people than the U.S.— 4.2 times as many, to be exact. So, as soon as China stopped being fantastically poorer (per capita) than the U.S., and became simply a lot poorer, its total economy surpassed that of the U.S."
More in Radio Free Asia.

Arthur Kroeber 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 financial experts? Here is an overview of some of them at the China Speakers Bureau.
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Wednesday, October 10, 2012

China says, do not push us around - Shaun Rein

Shaun Rein
Shaun Rein[/caption] China's finance minister is not going to a World Bank and IMF-meeting in Japan, as major sign to the rest of the world: do not push us around, tells business analyst Shaun Rein on Radio Australia.

Radio Australia:
The IMF and World Bank are holding their annual meetings in Tokyo for the first time in 50 years. The Chinese withdrawal marks a new stage in the dispute between Beijing and Tokyo over their conflicting territorial claims in the East China Sea. But it also sends a warning to the rest of the world about how China chooses to deal with it.
For the sound fragment, click here.

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.

This week's China Weekly Hangout will be on innovation in China, timely as Chinese companies like Huawei and ZTE are under US attack. Check out the announcement here and join us on Thursday.
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