søndag 25. oktober 2020

China is well on its way to becoming a powerful centre of finance – it just needs to loosen up more

All roads, it seems, lead to China – as an economic powerhouse, a global trade pole and now a magnet for regional or even global financial transactions. Events are pointing to what appears to be an inexorable shift in the balance of financial and economic power. The Covid-19 pandemic (plus the upcoming
US elections) have eclipsed discussions or even awareness of the tectonic shifts beneath the surface of the global economy. These have significance for global capital flows, and for how and by whom these will be mediated.

China’s economy (already the world’s second-largest or first in purchasing power parity terms) will emerge from 2020 some 2 per cent larger. This, when the global economy is projected by the International Monetary Fund to contract by 4.4 per cent, and Asia-Pacific economies by 2.2 per cent. Given how hard China was hit initially by the pandemic, this is all the more remarkable in that for the second time in just over a decade (the first being during the 2008-09 global financial crisis), China is emerging as a growth pole or dynamo. Not quite as strongly this time, but a positive force nevertheless.