It was Napoleon who once said “let China sleep, for when she wakes she will shake the world”. Yes, we are no longer living in the 1700s, but Napoleon wasn’t known as a genius for nothing; that guy knew what he was on about. It’s the twenty first century and his quote has never been more relevant. China is developing as a communist nation and its strength does raise the question: is it too soon for us all to start learning Mandarin?
Relationships with Russia
With the Winter Olympics well underway and the whole world’s focus on Putin and his games, both literally and politically, it’s easy to forget the aftermath of former Olympics unless using them as a criticism for the excessive Sochi spending. One key figure who hasn’t forgotten past games is the president of China, Xi Jinping. In a recent interview with Rossiya TV (a Russian channel) Xi said that he was anxious to improve relations with Putin following the games. He said he was very glad for the invitation because his country is going in to bid for the 2022 Winter Olympics.
Historically, there has been a Sino-Soviet split due to the hostilities between Chairman Mao and Stalin during the Cold War. Relationships have only been considered “normalised” in the last twenty years but Xi is very enthusiastic about his partnership with Putin. In the interview, he said that he wants to “promote mutual support on major issues concerning each other’s core interests”. Xi believes that bilateral relations between the pair would be very beneficial because both sides are advanced in technology and trade among other successes they share.
China’s Soft Power
China used to be referred to as a “sleeping giant” but now, with the use of their soft power sways, it’s becoming ever more likely China may stand a chance of overtaking America as the world’s biggest superpower. The communist country ranked second in this year’s edition of The Military Balance, a report that tracks military spending. The report shows the continuing growth of China’s military machine and has triggered a rise in defence expenditure in the region with defence spending in Asia up by 23% from 2010. China states that its ambition is not to become a threat to the United States, they want to keep their military advancements local in order to protect their country. Still, the advances in this country are notable as it shows the speed at which China is developing.
Is China’s economy safe?
The development of China’s spending may escalate the country into world power status or it might just be the cause of another economic collapse. With such confidence in the economy, the Chinese banking industry has set out on a $15 trillion lending spree which has led to the highest default rate for Chinese banks that has been seen in the last six months. The markets aren’t looking confident that China can repay these loans and such nerves will drive away investments. Bill Gross, co-founder of Pacific Investment Management, has called China the “mystery meat” of emerging markets because nobody can really tell what is going to happen in China. In the last decade the economic growth of emerging markets has slowed significantly and such lending activities may end up as a serious blow to investors in China unless the country can contain it.
Perhaps this fall in confidence is just a minor blip, after all, China is very skilled in soft politics and smooth talking and they are regularly making impressive (if not intimidating) headlines about their growth. But China is still classed as an emerging market and their economy’s future really is questionable so maybe it’s not quite the right time for us all to blow off the dust from our Mandarin books. China still has a long way to go.
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