On the other side of the world China is emerging as a major economic force. The administration in charge is progressively liberalising the Chinese economy, and bringing it more into the world marketplace. The new Connector between Hong Kong and the mainland permits more foreigners to buy Chinese shares and more Chinese to buy Hong Kong quoted shares. China is working towards her currency being one of the big five in the IMF’s SDRs, and is out to establish the renminbi as the world’s second largest trading currency after the dollar. The Silk Road projects will spread China’s economic relations into the Middle East, Africa and Eastern Europe.
China under her previous administration showed she could become the world’s largest manufacturer. Her make it and sell it abroad model powered growth and allowed the country to build up large foreign exchange reserves. The current ten year plan wishes to do the same with services, expanding them greatly. The money China has in reserves will help her build large financial and banking services businesses with global reach.
The west has to respond intelligently to these important developments. The USA is seeking to construct a trade club built around Japan, her leading ally in Asia. The US will discover that China’s networks will also attract considerable support, as China’s advance is backed by substantial investment cash and a willingness to think big and take the long term view.