There is something that relieves the suffering of Western countries: the habit of imbalance, persistence of crisis, rotation between the finishing line and the razor’s edge. China, instead, has traditionally been in need of security and stability. Parliamentary discussions are foreign, government crisis is absent. It is doomed to grow: its latest generation knows nothing but success. It has had 10% GDP increases in the last 33 years. This spectacular rise, unknown in modern economic history, is making China stronger, but ironically more fragile and exposed to winds of instability. Now, its rulers, skilled in isolating from the international business cycle, can no longer hide it and must show interest in other economies. Intercession on U.S. and European markets are not driven by political ambition and generosity. The only guiding star is the country’s interests, shamelessly disguised with diplomatic jargon. Global involvement is a novelty. In helping other nations, China helps itself.
There is no competition in economic indicators. Beijing goes far beyond all other world capitals for growth, accumulation of reserves, record exports and attraction of investments. If the comparison is a no-match with former first world, these acquired positions are obviously different. China is on the threshold of middle-income trap, the value of about 4000 USD per capita that World Bank considers both a milestone and a risk. From that moment, development should be based on other more sophisticated factors. A mixture of low wages, production supremacy and exports will not be sufficient to withstand competition from other emerging countries. Beijing will have to turn to industrialized countries to acquire qualities that is still lacking. In fact, it’s buying technology, skills, and well-known brands.
At the same time the country must continue to export to accumulate currency. For years now, its reserves have been, with no doubt, the largest in the world. Its goods finance future quality. Only with this complex and contradictory manoeuvre, it can defeat the dangers of inflation, poor consumption and social instability. China, however, is not used to such an articulated situation, a maturity test that it would have gladly postponed.
Declining economies are not in its interests. Should the U.S. be unable to finance the federal deficit, the possible devaluation of the dollar could penalize its astronomical savings. If double dip becomes a real threat, the decline in international demand will fall upon China, with an unpredictable impact just like in the year 2008. If the “people of Wal-Mart” do not have resources to buy products that are made in China, the flow of money to Beijing will diminish. However, the same will happen in the opposite direction, i-e. buying government bonds from the White House. China hopes that Obama will reach an agreement with the opposition for the next budget year. The President has requested 10 days of negotiation. Those are not the ones which changed the world. They will probably give shape to the next economic story, a cone of light and shadows with which Beijing will have to live.