China is striving to be number one

English Section / 27 aprilie 2021

China is striving to be number one

China is looking to become the world's biggest economy, an intention which is also visible from the speeches of the country's officials. The efforts in that direction are visible, as the Chinese economy was the only one that had a strong growth in the past year and has succeeded in recovering very quickly and resuming its natural course.

China will not seek to become a hegemony, no matter how powerful it is, according to president Xi Jinping, who is asking for "a fairer and more equitable" global governance.

In the annual Boao Asia Forum of April 19, held in the Hainan province, he issued a call to rejecting hegemonic power structures in global governance.

Amid rising tensions between Washington and Beijing, president Xi Jinping criticized some countries' efforts to erect barriers that "harm some and benefit no one".

Beijing has increasingly faced with the US and other countries, especially in the Asia-Pacific region, as well as in Europe, on various matters - from human rights to unfair trade practices. These countries have expressed their concern concerning China's growing political and economic influence, thinking that the Asian country is threatening the global order.

In the opening ceremony of the Boao forum, Xi Jinping said: "The world wants fairness, not hegemony. A great country has to show it is a great country by taking on more responsibility. No matter how powerful it may become, China will never seek hegemony, expansion or an area of influence, nor will it engage in an arms race". According to the Chinese leader, the country he is leading is a champion of globalization and of the multilateral trade system, and international rules should not be set by one or a few nations.

Without naming any country, the Chinese president said that great nations should behave "according to their status".

The Chinese state imposed unilateral sanctions against some countries, including Australia, after the country in question expressed its support for an international investigation concerning the coronavirus pandemic, which began in China.

Tense relations

The statements made by the Chinese officials came as US-China relations are not at all calm under Democrat president Joe Biden. That, after China's trade practices were at the center of an intense customs tariffs war between Beijing and Washington under the previous administration, of Republican Donald Trump, when the US was accusing Beijing of owning American branches which grant Chinese companies an unfair advantage abroad and of forced transfers of technology and intellectual property.

The US, the UK, Japan and other countries have spoken out against China on issues that concern the Hong Kong autonomy - a special Chinese administrative region - all the way to accusations of serious human rights violations in Western China. Beijing in turn accused Washington of interfering in its internal affairs.

Last month, Joe Biden said that the Chinese state "has as its general goal to become the leading country, the richest and most powerful in the world". The US president said he would not allow that to happen.

At the end of last week, Joe issued the first summit with physical presence at the White House since his appointment, with Japanese prime-minister Yoshihide Suga, and China was the focus of the meeting. The two leaders said that they "share serious concerns" over the state of human rights in Hong Kong and in the Chinese Xinjiang region, where, according to the White House, Beijing is committing genocide against the Uyghur Muslims. China denies committing any abuse.

In a demonstration of economic cooperation that excludes China, Biden said that the US and Japan would make joint investments in areas such as 5G technology, artificial intelligence, genomics and semiconductor supply chains.

In that context, Beijing seeks to consolidate its ties with its neighbors in South-East Asia.

According to the most recent Forbes chart concerning the most powerful leaders in the world, made in 2018, Xi Jinping holds the top position, followed by Russian president Vladimir Putin, former American leader Donald Trump, German chancellor Angela Merkel and the owner of the American retail giant, Jeff Bezos.

Xi Jinping denounces the project of carbon taxation in the EU

Chinese president Xi Jinping, speaking in front of his French peer Emmanuel Macron and chancellor Angela Merkel, criticized "trade barriers" raised in the name of the fight against climate change, referring to the introduction of a carbon tax, measure being reviewed at the level of the European Union (EU), according to the AFP. The European Commission wants to present its own text on the issue in June, and submit it for approval to the EU member states.

The three leaders have discussed in a videoconference, he stakes of the fight against climate change prior to launching a number of international reunions that would tackle this problem, as well as the healthcare crisis.

The first of the reunions is the virtual summit on the struggle against climate change set to be held on April 22nd-23rd, on the initiative of American president Joe Biden.

Xi Jinping had not yet confirmed his participation in the event.

"The fight against climate change is the joint cause of humanity", Xi Jinping said: "That should not become a geopolitical stake, the target of attacks from other countries or a pretext for raising some trade barriers".

The Chinese official mentioned that his country - the biggest polluter in the world - will reduce its CO2 emissions by 2030 and become carbon neutral by 2060.

China: "The goal of internationalizing the yuan is not to replace the dollar"

China recently tried to assuage fears concerning the fact that it is trying to assault the position of the US dollar as the main reserve currency, as Beijing is making progress in creating its own digital yuan, according to Bloomberg.

Deputy governor of the People's Bank of China (PBOC), Li Bo, said that the goal of the country's currency becoming international is not to replace the dollar, and the efforts to create the digital are aimed at its internal use.

"I've often said that the internationalization of the yuan is a natural process, and our objective is not to replace the US dollar or other international currencies", Li Bo said at the Boao forum: "I think that our goal is to allow the market to choose, to facilitate trade and international investments".

China's central bank is currently testing the use of a digital yuan in various pilot programs across the countries, and the Biden regime is intensifying its checks on China's progress when it comes to the digital yuan, amid worries concerning a future replacement of the dollar.

China will expand the experimental use of a digital yuan to several cities, but there is no deadline for its official launch. China is at the forefront of the global race by the central banks to launch digital currencies, for the modernization of the financial system, preventing the risk that cryptocurrencies such as Bitcoin involve and the acceleration of the international and internal payments.

The PBOC has been working on its own digital currency since 2014.

"The motivation for the yuan, for now at least, is focusing on domestic use", Li Bo said. "International interoperability is a complex issue and we are not in a hurry to reach a special solution, even though there could be a cross-border solution in the long run".

China's Central Bank intends to test the cross-border use of the Digital Yuan in the Beijing Winter Olympics of 2022, where it will be usable both by domestic users as well as the visiting athletes and foreign tourists, according to Li Bo.

Agustin Carstens, the head of the Bank of International Settlements, argues that there is a huge potential for the cross-border use of digital currencies, as they could make currency transactions and payment settlement extremely efficient. In his view, countries can explore various ways to achieve international interoperability, including through making the various systems compatible and creating connectivity links between systems.

Shen Jianguang, chief economist at Inc., says that while the yuan digitalization could benefit from its use in cross-border transactions, the key factor in determining the global role of this currency would be loosening state control over capital. "To have a global reserve currency, you have to allow foreigners to hold it, use it," says Shen Jianguang.

"China will also have to allow its citizens to buy more foreign assets, to continue to develop its financial markets and to allow greater flexibility of the exchange rate, to promote the internationalization of the yuan".

China has attracted massive capital flows on its financial markets starting last year, increasing the volume of yuan traded globally, according to Bloomberg, which notes, however, that foreign holdings of Chinese shares and bonds remain relatively low, around 5%, and 3%, respectively. The share of the yuan in the global payments and in central bank reserves is approximately 2%.

Beijing surpasses New York, becoming the capital of the world's billionaires

For the first time in seven years, New York has lost its position of capital of the world's billionaires, yielding to Beijing, according to Forbes data, which reports that in 2020, China's capital gained 33 new billionaires, raising their total number to 100, compared to the 99 billionaires in New York.

According to the Forbes World 2021 list, a quarter of its 2,755 members live in ten cities, with over 10% residents in just four Chinese metropolises. Aside from Beijing, the list of of the top ten billionaire cities in the world also includes Shanghai, Shenzhen and Hangzhou. Hong Kong ranks third of the list, with 80 billionaires.

The only major economy that had economic growth in 2020

In 2020, China's economy posted a growth of 2.3%, the only major country that avoided a GDP drop last year. For the current year, the International Monetary Fund estimates that China's GDP will see an 8.4% growth.

According to the World Economic Forum (WEF), which cites forecasts of the international entities, the ranking of the biggest economies in the world will look different in 2024, with the top positions to be held by Asian countries.

Last year, the World Economic Forum stated, based on the data by the World Bank and the IMF, that Asian countries would hold four of the top five positions of the world's largest economies, in terms of GDP, in 2024, which would take European countries that are still economic powers lower.

China's economic growth has been solid since 1990, while India and Indonesia have only more recently entered the top ten of the world's largest economies, and expectations indicate that these two Asian countries (India and Indonesia) will reach spots three and five in 2024, when Japan is expected to rank fourth, and Russia to rise to the sixth spot.

According to that chart, in 2024, China will be the world's largest economy, dethroning the US, who will move to second place. According to the aforementioned scenario, the next places would be held by India, Japan and Indonesia. The next places in the top 10 would belong to Russia, Germany, Brazil, Great Britain and France.

According to the WEF, one of the engines behind the solid Asian GDP growth is the middle class on the continent, which is increasingly thriving.

The biggest automotive market in the world increased 75% in March

China's automotive market, the biggest in the world, has continued its growth this year, and in March has recorded a 75% growth, with deliveries of over 2.5 million cars. The market grew for 12 months straight.

Last month, China saw a massive increase, of 239%, on the electric vehicles segment, to 226,000 units.

China is also a world leader on the steel consumption segment (and the world's biggest producer thereof), of gold, industrial metals, coal, energy, luxury, lux etc.

For decades on end, China had a growth model based on exports and investments, but now, the Communist Party has in its plans a new strategy (for the years 2021-2025) of implementing a more durable model, of consumption driven growth, especially from households.

However, according to specialists, China needs to speed up investments in infrastructure this year, as consumption, affected by the Covid pandemic, is not as high as it ought to be to serve as an engine for growth.

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