Davos-2019: a new look at China

Давос-2019: новый взгляд на Китай

Year trade dispute between the US and China keeps in suspense the whole world. Right now there are talks of the two largest economies in the world regarding searching for solutions, and hope that the meeting in Davos will promote a particular discharge was very great.

However, nothing happened because the American President Donald trump and his Ministers refused to participate in the economic forum because of the “shutdown”, which until today has continued in the US.

But China sent in Davos are numerous, the largest in the last 40 years – a delegation led by Deputy head Wang Qishan, who was this year’s greatest on the forum.

“Bake a cake together”

Wang Qishan used the podium to make a statement about devotion to global free trade, open markets and international cooperation. “Together, we must work to ensure that the cake was bigger and his division was fair, he said of world trade. – And what we should not do is to stop the baking of the pie.”

Wang Qishan has continued a policy started by the leader of China XI Jinping at the forum in Davos two years ago, when the Chinese leader was clearly in favour of free trade and multilateral trade relations, which caused a lot of support.

However, since the beginning of the trade conflict between China and the United States a year ago, a lot has happened. The dispute is holding back growth. But above all, he changed the Outlook of the West on China’s economy. More is said about the fact that China still protects from international competition part of its own economy-namely the financial sector.

Thanks to the purchasing power of Chinese middle class of China start more interested in Western firms. German automaker Volkswagen sold there every second car. American firms are also seeking not only cheap to produce in China, but also to take their place in the vast Chinese market.

“Now these companies complain about the current limitations of market access to China, says economist and Vice Chairman of the Bank for international settlements Raghuram Rajan. Partially the geopolitical tension is the result of tension between the companies.”

Indeed, many Chinese firms have become strong competitors. For example, Huawei, the smartphone manufacturer and supplier of equipment for the German Telekom. Or state chemical company Sinochem, which is run by Ning Gonin. This company soon merged with Chemchina in giant worth 120 billion US dollars.

“A few confused Chinese”

A few years ago NIN Gonin could make a major acquisition in the United States. Now it is impossible. “We all see what is the situation today, he said in Davos. – Chinese firms will definitely be less to invest abroad.” According to the Chinese businessman, his country’s economy grew thanks to investment from abroad. “The Chinese are now somewhat confused, he said. – The Chinese thought that their investments abroad are also waiting for. But now they have to admit that this is not so.”

Due to the change in legislation, the German government also has the option easier to block a merger or purchase of German firms. It was a reaction to the fact that in 2016, the control over the German industrial robot manufacturer Kuka Robote received a Chinese home appliance manufacturer Midea group, which spent for the acquisition of shares in excess of four billion U.S. dollars.

China as a technological giant

In Europe everything it added more fear to keep pace with new technologies. “None of the ten largest companies in the field of technology is not a European market is developing in the United States and China”, – said the representative of the world economic forum in Davos, Martin Larkin during the presentation of the report on European competitiveness.

According to her, the Europeans are lagging behind especially in future technologies such as artificial intelligence. “Here they have to press the gas,” says Larkin.

And a lot of time in Europe anymore, because China in the development of “artificial intelligence” took a furious pace. “Business there are literally explodes, says Stephen Schwarzman, head of the powerful American investment company Blackstone. – There is an incredible amount of ideas for new businesses in the field of “artificial intelligence”. Moreover, in China, a huge amount of data that is needed for this. So this is the beginning of the revolution.”

Technology, market dominance, jobs and welfare are the themes that fuel the political conflict with China. Europeans still put on cooperation, the United States is already trying to replace confrontation.

“Trade would require adjustment to each other, – says Schwartzman. But how long will this process of adaptation, it is difficult to predict. It takes time. Perhaps decades,” he concluded.