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Friday, April 20, 2018

Fear of the new authorities of the United States has reconciled Germany and China

Relations between Berlin and Beijing have long remained strained. But now China is found in Berlin an unexpected ally. If the American-style globalization will trump canceled his policy on the closure of the markets, Europe will have become part of the Chinese script. Otherwise the world economy could face a new global crisis.

In the near future to Germany at the personal invitation of Angela Merkel should arrive Premier of the state Council of China Li Keqiang. During the discussion of the forthcoming visit the sides exchanged allegations that the closures are harmful to global trade, and reaffirmed their commitment to an open global market. This idyll looks weird. After all, even in the fall, these countries were on the brink of a trade war.

“Money supply China’s growing unstoppable pace, and today reaches nearly 23 trillion dollars. This is slightly less than the total money supply of the USA and the EU. If the money is not invested, the resulting “bubble” will burst”

The problems between China and Germany began in a time when German authorities tried to slow down the process of acquisition by the Chinese company Midea Group of China of the German manufacturer Kuka robots. Berlin wanted to find a European buyer, but did not succeed, and in the end, Kuka Chinese people still bought it. But when the Chinese investment Fund wanted to acquire a manufacturer of microchips Aixtron SE, the German regulator had simply withdrawn their consent to the transaction under the pretext of its threat to Germany’s security. Stopped and the process of concluding agreements on acquisition of Chinese famous manufacturer of lighting equipment Osram Licht.

The ruling circles were worried that China will use innovation for military purposes, moreover, they in principle did not want to completely lose control over the centers of high technology. It was felt deliberate unevenness of sales and purchases. If Germany Chinese businessmen came to the supermarket, buying any vending their company, the German businessmen to acquire business in China was much more difficult. The situation came to the fact that Chinese foreign Minister was invited to the German diplomat, who was asked to explain why the German government is blocking the transaction with the Chinese businessmen.

And now China and Germany unexpectedly reconciled US: largest exporters in the world (China is located on the first place, and Germany – on the third) felt threatened by the protectionist ideas of Donald trump. The new American President has brought US from the TRANS-Pacific partnership. Now to the renegotiation of NAFTA, a trilateral trade agreement between the US, Canada and Mexico. Some experts (mostly from Mexico and Canada) and even predicting the US withdrawal from the WTO. This trend inevitably involves new countries, forced to isolate themselves from each other customs and tariff barriers. For the German economy, problems with exports can be very serious. For China’s economy – catastrophic.

Last year, China recorded a record decline in exports. Today this trend is due to a worldwide drop in demand, could overwhelm Germany. Not surprisingly, both countries, having forgotten about disagreements, rushed towards each other. Warming began at the January Davos forum.

“Fear and terror” that prevailed, according to Anatoly Chubais in Davos, had a strong first guests from China. One of the most representative delegations at the forum was headed by the President of China, XI Jinping. Part of the Chinese leader in the collection of the main capitalists of the world in itself was a rarity, but even more amazing was the speech comrade XI said at the forum. In the best traditions of the Chinese poetry he likened protectionism with the seat locked in a dark room: “Yes, the rain and wind won’t bother you. But you won’t get also no light, no air.” “The winners in a trade war will not” – he warned. The speech of the head of the Chinese Communist party became the anthem of globalization. Specific measures promised si Tszinpin business partners in the West, included the facilitation of conditions for foreign investment in China and the abandonment of the depreciation of the yuan. The speech was greeted with applause, not less rapid than at the Plenum of the Central Committee of the CPC. Separate praise the idea of globalization in Chinese received from Angela Merkel.

Globalization without trump pursued by China today, is the only way to salvation for the overheated Chinese economy. On the one hand, China needs the world market for their products – and this has long been not only cheap consumer goods, but also high-tech products. Not less necessary for the Chinese and the possibility of unlimited investment. In recent years, businessmen from China are buying up around the world of real estate, large companies, retail, and hospitality network, the Studio, luxury goods and art, startups, Antiques, and even entire Islands. The volume of such transactions is enormous – only in Germany to 2016, the Chinese acquired the company in a week, despite the opposition of Berlin.

Not knowing what else to buy, the Chinese turned their gaze even before this unusual pastime as football. One winter, the Chinese super League spent on transfers of players of about 200 million euros – more than any other country in the world. At the same time Chinese oligarchs bought a 70% stake in Milan “inter” and 20% “Atletico Madrid”.

The investment fever is consuming of China is not a good life. Money supply China’s growing unstoppable pace, and today reaches nearly 23 trillion dollars. This is slightly less than the total money supply of the USA and the EU. If the money is not invested, the resulting “bubble” burst with such a Bang that threatens to bury by not only Chinese but also the world economy. Another question, and whether her salvation through the globalization of Chinese?

On the one hand, China is the real driver of the entire economy of the planet, ensuring she’s up to 30% growth (at least according to Beijing, that is trusted, not all). Chinese demand immediately pushes up prices in the relevant sector. At the same football, it can be seen very clearly – China has warmed up the market of players and raised the salaries of top coaches.

On the other hand, it is unclear where it will end globalization in Chinese. Just a few months ago the Chinese company tried to buy 1% of Australia under agriculture. The deal was not approved by the government. However, the energy company of the state of the continent is largely under the control of the Chinese. Investments from China in the U.S. has exceeded U.S. investment in China. In Africa and Latin America, Chinese companies are buying at the root of almost the whole country, building the infrastructure and creating markets for their goods.

The Chinese government promises that Chinese globalization is not as aggressive as the us, providing “social harmony”. And while the international business elite are pleased to cooperate with the Chinese oligarchs. So Angela Merkel suddenly abandoned its traditional criticisms of China in violating human rights, started to promote the cooperation between Berlin and Beijing. However, the population of some developing countries regularly protests against Chinese economic expansion. And what will China cope with these challenges and carry out your project of globalization, the future of the world economy.


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