Today’s (31 January 2010) NZZ am Sonntag (Neue Züricher Zeitung), my favourite Sunday newspaper, in the Background Section carried a full page feature article on the Chinese presence at the WEF in Davos titled “ China demonstriert am WEF seine neue Machtposition” (At the WEF China showcases its new power). Alas, the article is ,of course, in German and I am too lazy to translate it in its entirety, so I shall treat you only to some excerpts:
“In the past at WEF it has always been the United States on centre stage with the CNN interviewing and dancing in attendance on a hefty high level US delegation. This week the staging changed dramatically.
This past week the highest profile American was Barney Franks, a Democratic congressman holding forth on discussion panels. The low profile of the US at the WEFF was signalled by the change in administration and the tone of Obama’s State of the Union Address. In contradistinction to the US presence one saw a high calibre Chinese contingent headed by the Vice Presidential Minister, Li Keqiang, tipped to be the successor to Hu Jintao. Also, interestingly, more Chinese was heard spoken in Davos than any time in the past.
The US is turning inward absorbed by its own difficulties, polarised by domestic politics and severely hit by the economic downturn. Into this gap enter China, and how! The Middle Kingdom has replaced Germany as the number one exporter in the world and supplanted Japan as the second largest economy.
China now produces more automobiles than the USA and is home to four of the five largest banks on the planet. China, not the moribund EU, has the resources to provide a Greece verging on bankruptcy with funds to prevent it going under.
Ironically, the global financial crisis was the springboard which launched China into prominence. In Copenhagen, China flexed its muscle confronting and denying the USA leadership on the issue of climate change. Negative as that might be seen, on the positive side of the ledger, a recovery from the global recession would be very difficult without the Chinese locomotive.
No one is more conscious of this than the Chinese themselves as evidenced at one of the discussion panels in Davos. Some Western participants called once again for the exchange rate of the Renminbi to be adjusted and declared that China must finally “play by the rules”. To that, responded the head of one the largest Chinese banks, “those are your rules, not our rules. Why should we play by these rules?” Lecturing by the West is no longer welcomed by the Chinese.
The time is long past that one must blindly follow the US capitalistic recipe said one Chinese economist. The central question for China is “what is best for China?”
With respect to relations with the USA, one representative of this new China said to a representative of the USA, “We are not friends, we are business partners”
This sea change and shift in global power couple with continuing economic problems in the USA could give rise to resentment amongst Americans and engender increasing protectionism leading to a trade war.”
My Italics and Comments
At end of the day, should it come to a trade war, both parties would be sorely wounded. But China holds more economic weaponry in the form of disposable capital, and has a more disciplined population behind it than the USA. The Chinese, having endured sorrow and misfortune over the last two hundred years have steeled and toughened themselves, and the domestic economy of China will soon decouple China from its present dependence on exports, and the USA. This, while the US has grown soft, spoiled, politically inept, debt ridden and intellectually dissolute.