I saw this train coming down the tracks long ago. I didn’t need a high school diploma to make economic predictions, at least in the face of the drama in Euroland. Sooner or later the European Union was going to turn East. Unless you’ve been happily hiding under a rock, everyone knows that with Greece and Italy dragging the rest of Europe along into its economic mess, it was only a matter of time before they went to the one source they would rather avoid. China, that is.
Knocking on China’s door comes with strings attached, and that is where anyone will imagine Nicolas Sarkozy and Angela Merkel scratching their chins.
Every economic historian will point out that China’s rise to stardom occurred through some radical reforms and not-so-admirable antics. The West spent the past 50 years criticizing the Chinese for their disregard for individual freedoms and many aspects of free enterprise. The Chinese didn’t budge, haven’t budged and with the global financial landscape heading to hell in a hand basket, the Chinese are unlikely to rethink their strategy. The only trouble is that the Chinese economic landscape is riddled with humanitarian landmines, well documented and criticized.
China is the largest holder of foreign currency reserves in the world with more than $3 trillion in its secret stash. Even more, the Chinese economy is growing fast, whiles others are still struggling to make sense of debts and fiscal mismanagement. With Europe begging for salvation from Beijing, the Chinese have every right to think “who’s laughing now?”
The United States in their part has done well by hooking its economic engine to the Chinese train. That’s a conversation worth its own blog, but at least it still maintained its dignity and leverage with market size and spending power. The African countries hitched onto this train long ago. The EU will do anything at this juncture to save the lingering gloom.
Not so fast. . .
You can bet Chinese President Hu Jintao will be asking what’s “in it” for him. It’s one thing bailing out a wobbly company, or even a country. It’s an entirely different ball game trying to nudge a trade bloc or customs union to act. While China will be the logical savior of the European crisis, there is still a school of thought that feared this day.
Of course there are many people who dislike that thought of the world sitting at China’s feet. The world can only whine, bark and cry at any geopolitical or economic issues it crosses hairs with, - but can’t do “diddly squat” about it. That’s the crux of the fear but the West has itself to blame, but perhaps the West has had its time to bask in the sun.
The next decade promises to be interesting and tricky, but one thing we know for certain is that the sun will be rising from the East.
