Argentina joins China’s Belt and Road Initiative

The Latin American country is seeking a way out of US and IMF ‘debt diplomacy’

Argentine President Alberto Fernandez added another event to a highly politicized Winter Olympics when he met in Beijing last week with Chinese President Xi Jinping and agreed to join China’s Belt and Road Initiative.

Argentina becomes the 20th of 33 countries in Latin America and the Caribbean to sign up for the Belt & Road. An official seal on what was already an extensive and growing economic relationship.

In addition to expanding trade and investment opportunities with China, joining the Belt & Road should make it easier for Argentina to obtain funding from the China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank.

And this should reduce its dependence on the International Monetary Fund (IMF), a top priority for Fernandez.

Prior to the February 6 meeting in Beijing, Fernandez dropped by Moscow. There he told Russian President Vladimir Putin: “I am determined that Argentina has to stop being dependent on the Fund and the United States. Here I believe that Russia has an important place.”

Coming in the midst of the Ukraine crisis, this was the first of two diplomatic slaps in the face of the US government, which is boycotting the games in Beijing. Fernandez attended the opening ceremony.

The UK had a slap of its own when China took the opportunity to support Argentina’s position on the Falkland Islands (Islas Malvinas). That is another story. It does underline the Global South versus Imperial North nature of the dispute.

This year marks the 50th anniversary of the establishment of diplomatic relations between Argentina and China. More recently, relations between the two countries have advanced considerably during and after the presidency of leftist Cristina Fernandez de Kirchner, who led Argentina from 2007 to 2015.

Difficult relations with the US

She had difficult relations with the US, which she blamed for Argentina’s sovereign debt default in 2014, and she put relations with China on the course they are on today, as is demonstrated by this statement from the Chinese Ministry of Foreign Affairs:

On April 23, 2014, President Cristina Fernandez de Kirchner of Argentina met with Foreign Minister Wang Yi at the Pink House in Buenos Aires.

Cristina said that the Chinese government promotes reforms with keen determination, and the whole country is dedicated to the national construction with concerted efforts, by which China has scored great achievements well-known worldwide and become a model for developing countries. The Argentinian side highly values Argentina-China strategic partnership, and is willing to strongly boost political mutual trust between the two countries and to deepen cooperation in economy, trade, infrastructure, agriculture, hydroelectricity, scien-tech and other fields, so as to promote Argentina-China relations for greater development.

Wang Yi said that … China views China-Argentina relations from a strategic and long-term perspective, and stands ready to work with Argentina in maintaining high-level exchanges and deepening strategic communication.

Argentina has the reputation of being an economic basket case, but it has a fairly sophisticated economy and now runs a trade surplus, with exports exceeding imports by 23% in 2021.

Exports were led by agricultural products (35.5%), industrial manufacturing (29.1%) and primary goods (26.9%). Imports were led by intermediate products (36.9%), capital goods (18.8%) and parts and accessories for capital goods (18.1%), according to statistics from Trading Economics.

Argentina’s top three export markets are Brazil, China and the US. Its top three sources of imports are China, Brazil and the US. Total trade with China has expanded by several times in the past 20 years and is now nearly double the total trade with the US.

Significant trade is already in place

Argentina is a major exporter of soybeans and soybean-derived products, corn and beef, competing with the United States in China and other markets. Like Brazil, it offers China an alternative to dependence on the US in the middle of a long-term trade dispute and increasingly acrimonious rivalry.

Also in January, China’s Zijin Mining announced it had completed the purchase of Neo Lithium of Canada and its 3Q lithium brine project in Argentina. According to the press release, the project “is one of the largest and highest-grade projects of its kind in the world. The property is the fifth-largest lithium brine project in the world, and ranks among the top three in terms of grades.”

The Canadian government approved the deal without a security review and “the project has been approved by the Environmental and Mining Authority in Catamarca Province, Argentina.”  

Canadian conservatives and American China-bashers were outraged. Florida Congressman Michael Waltz, a Republican member of the House Committee on Science, Space and Technology, said:

Was the Biden administration notified and, if it was, why did it green-light this acquisition? And if it wasn’t, why wasn’t it in accordance with the agreement [the Canada-US Joint Action Plan on Critical Minerals]? Obviously, we’re NATO allies. We, I think, have a common view of the Chinese Communist Party as an increasingly dangerous and threatening adversary.

5G rollout with Huawei and Nokia

In addition to that, Telecom Argentina began to roll out 5G telecom services last year in partnership with Huawei and Nokia.

The Americans didn’t like that either. But what more attractive alternative to any Chinese project in Argentina have they offered?

On the other hand, the United States is closely identified with the IMF, which is not popular in Argentina. Here’s how Fernandez explained it to Putin:

Argentina has experienced a very special situation as a result of its indebtedness and the economic situation that I inherited. From the 1990s onwards [actually since the Latin American debt crisis of 1982], Argentina has looked to the United States, and the Argentine economy depends a great deal on the IMF debt and the US influence in the Fund …  In 2015 we had a government that once again turned its gaze to the United States and generated the tremendous debt we have.

Not a word about financial irresponsibility

Not a word about financial irresponsibility and the workings of Argentine democracy, but that is not the point.

The final sentence of Fernandez’s comment refers to Mauricio Macri, the center-right businessman and politician who succeeded Cristina Fernandez de Kirchner in the presidency in 2015 and served until 2019.

Macri repaired relations with the US and liberalized the economy. And when a severe drought crippled the agricultural sector, inflation ran out of control and the government could not meet its obligations, he turned to the IMF.

That led to an even worse disaster.

On December 22, 2021, the IMF published the following press release and staff report: Argentina: Ex-Post Evaluation of Exceptional Access Under the 2018 Stand-By Arrangement. Its summary:

On June 20, 2018, the Executive Board approved the largest stand-by arrangement in the Fund’s history, in support of Argentina’s 2018-21 economic program. After an augmentation in October 2018, access under the arrangement amounted to US$57 billion … The program saw only four of the planned twelve reviews completed, and did not fulfil the objectives of restoring confidence in fiscal and external viability while fostering economic growth. The arrangement was canceled on July 24, 2020.

IMF Country Report No. 2021/279

The IMF defines “stand-by arrangement” as follows:

In an economic crisis, countries often need financing to help them overcome their balance of payments problems. Since its creation in June 1952, the IMF’s Stand-By Arrangement (SBA) has been the workhorse lending instrument for emerging and advanced market countries.

Unfortunately, the stand-by arrangement required fiscal and monetary austerity, which caused a recession. Argentina’s GDP dropped by 2.6% in 2018 and by another 2.1% in 2019. Then, with the onset of the pandemic, it plummeted 9.9% in 2020. Poverty increased by an estimated 50% and capital flowed out of the country.

In this situation, Fernandez headed to Moscow and Beijing to broaden his options, stirring up opposition to his leadership on the right as well.

But default has been averted, the IMF has abandoned “tough love” for what could be called constructive sympathy, and currency swaps between the Argentine and Chinese central banks have added to Argentina’s foreign currency reserves.

This should stabilize the economic situation and allow the Chinese to continue expanding their role in Argentina’s economy. They are not wasting any time.

On January 19, agreements aimed at upgrading Argentina’s railway system were signed by the Minister of Transport, the president of the national railway company and representatives of engineering contractor China Railway International Group and rolling stock maker CRRC Qindao Sifang.

‘The country that bombed you is your friend…

The one that built your new railway is your enemy’

This is the Western media’s bizarre messaging to the people of Laos. The nation that was carpet-bombed by America, and which is now being vilified for accepting a new $9 billion railway line paid for by China.

Tom Fowdy

is a British writer and analyst of politics and international relations with a primary focus on East Asia.

Thursday was National Day in Laos. A celebration marking 46 years since the landlocked Southeast Asian nation deposed its monarchy and became a revolutionary communist state. An effort which was supported by Vietnam.

This year, the anniversary had added significance, as it saw the opening of a major new project. It is an electrified high-speed and freight railway system connecting the capital city, Vientiane with its northern neighbour, China. 

The $9 billion project is part of the Belt and Road Initiative, and has been hailed as one of its flagship achievements. It is the first commercial and industrial railway in Laos, which, given its geography and the fact it is surrounded by mountainous terrain, has not previously had many options to expand its exports and generate economic growth.

Now, though, it has a direct rapid link into the world’s second largest economy and the world’s largest consumer market by population, and a connection to the booming ports of Guangdong. In terms of what it will bring to Laos, it is a game changer. So, what’s not to like about it?

To nobody’s surprise, the mainstream media have responded to the railway with the usual anti-China negativity. A plethora of articles sought to paint the project as a ‘debt trap’. Promoting the accusation that Beijing loans countries money for projects they cannot afford and then exerts political leverage over it. 

”China, but at what cost?”

The Financial Times, for one, ran with a cynical article headlined ‘Laos to open Chinese-built railway amid fears of Beijing’s influence’. It implied that somehow Laos feels threatened or fears the construction of this very pioneering railway project. This suggestion of ‘fears of Chinese influence’ has become a common feature on such stories. It seek to cast doubt over anything positive China may be achieving or doing. 

A common Twitter meme among pro-China users which has followed from stories like this asks: “but at what cost?” highlighting the frequency of such negative coverage.

And if you Google “China, but at what cost?” you can find a great many examples of articles published in major outlets. In producing such pieces, the broader intention is to depict Beijing’s actions as unwanted, threatening and constantly facing opposition. In the case of the Laos railway project, the ‘problem’ is it was financed by debt, and therefore it is not a positive step.

Yet this argument is as insulting as it is outright insensitive to Laos’ contemporary history. Anyone who knows anything about Laos’ relatively recent past will be well aware that China is not the country to fear, but the United States – the nation that dropped over 260 million cluster bombs on Laos and completely devastated the country as an extension of the Vietnam War, making it the most single bombed nation in history and claiming over 50,000 lives. 

What is the cost of unexploded bombs clearing?

Many of these bombs remain unexploded and litter the countryside of Laos, continuing to kill civilians. In constructing the new railway, workers first had to clear the unexploded ordnance. How is it that the world and the mainstream media remain indifferent to this atrocity? And how, by any stretch of the imagination, can they claim that China is the true threat to Laos, and that the US and its allies act in the true interests of the country?

Herein lies the problem. Such a mindset symbolizes the elitism, chauvinism and self-righteousness of the countries of the West. Countries which are ideologically inclined to believe that they stand for the ‘true interests’ of the ordinary people in the countries they profess to liberate. 

Western politics peddles the assumption that through countries’ adherence to liberal democracy, they exclusively hold a single, universal, impartial, and moralistic truth, derived from the ontological legacy of Christianity, and they must introduce it to others. The West always acts truthfully and in good faith, while its enemies do not. And therefore, so the logic goes, any policy the US or its allies direct towards Laos is motivated by sincere intent and goodwill for its interests. In turn, anything that China does is bad-faith, expansionist and power-hungry behaviour motivated by a desire to influence or control the country. 

This creates the bizarre scenario whereby Beijing is depicted as evil and sinister for building a railway to connect to its neighbour. However, we should forget America dropping millions of bombs on the country because it was done in the name of ‘freedom’. I’m sure you can imagine how the media would react if China did the latter.

Pro US media distorting reality

The Laos-China railway has provided a textbook example of how the media can distort a story in order to fortify an incriminating narrative, while brushing aside brutal realities. We are shown a lopsided world, where the travesty of a country being bombed into oblivion with consequences lasting decades is ignored, and the preference is to try to convince us how that same country’s first commercial railway line is, in fact, what it should really be scared of. 

It is a demonstration of how the power of the English-language, pro-US media distorts reality itself and how they can blow up an issue, yet hide the truth, by professing to care dearly about the wellbeing and interests of a country which the West poured death, destruction, and carnage upon in the name of freedom.

Russia & India have huge potential in energy sector

The potential for increased cooperation between Russia and India in the energy sphere is immense. Investors in both nations looking to expand mutually beneficial projects, India’s energy minister, Hardeep Singh Puri, told RT.

There’s a lot of ongoing cooperative work in the sector of petroleum and natural gas [between Russia and India]. It contains tremendous potential.”

He noted that Russia has many ongoing projects in the energy arena in India and is looking to further invest in the country. As it was expressed at a number of meetings with Russian companies at the EEF this week. According to Puri, India’s investments in Russia’s energy sector amount to some $16 billion. Russia has invested around $14 billion in India. 

Puri also stated that India’s import dependence on liquid hydrocarbons and gas is about 85%. Only about 1% of the country’s energy imports come from Russia. As India forecasts its economy to grow to $5 trillion in the next three to four years, he expects the country’s energy per capita consumption to grow “exponentially,” giving further ground for boosting energy cooperation between the two states.

We’ve got the roadmap in terms of the potential [in the energy sphere]. Both sides would want long-term agreements which provide predictability, stability and prices,” Puri said.

Russia and India are strategic partners in energy secotr

He added that he expects a “fascinating dialogue” about expanding energy inflows to India in the near future, as the country’s energy demand makes it a rather attractive market. 

No matter where you find oil and gas, somebody has to consume it. Many existing markets have reached a point where they have their sources, they have imports. India is one country where you can’t go wrong on the demand assessment. So potentially it’s a fascinating dialogue to have,” Puri said.

India is in need of energy and energy sources are here [in Russia]. Russia and India are strategic partners in energy and nobody has a second opinion on that,” he concluded.

During the EEF plenary session on Friday, Indian Prime Minister Narendra Modi also spoke positively about energy cooperation between India and Russia. He said it can bring stability to the global energy market, calling it a “major pillar of our strategic partnership.”

In his virtual address, Modi said Indian workers were taking part in gas projects in the “Amur region, from Yamal to Vladivostok and onward to Chennai.” He added that Indian authorities “envisage an energy and trade bridge.”

I am happy that the Chennai-Vladivostok maritime corridor is making headway. This connectivity project, along with the International North-South [Transport] Corridor will bring India and Russia physically closer to each other,” Modi stated.

Pakistani Stream: Russia Goes South – Just Beginning

Sergey Savchuk

The foreign press reports that Russia continues to work to build up its strategic presence in key points on the world map. In this case, we are not talking about the army and the navy. It is about energy and specifically about the “Pakistani Stream”.The other day in Islamabad, a bilateral meeting ended, at which groups of technical specialists from both countries confirmed their readiness to implement the project, for which the development and coordination of technical issues and documentation will continue. The main difference from the memorandums of previous meetings is that geological exploration will begin along the route of the potential gas pipeline. That is, the future pipe makes its first step from paper to the ground.

Initially, the idea of ​​the project arose at a difficult time. In 2015, an intergovernmental agreement was signed on the development and construction of the North-South gas pipeline. With a length of almost 1,100 kilometers and a cost of about $ 2 billion. The implication was that Russian contractors would build a transit line from the port of Karachi to the city of Lahore. The peculiarity of the technical idea was that it was necessary to additionally build a regasification terminal in the port. There LNG would be delivered using sea LNG carriers. After being transferred back to a volatile state, it would go strictly north to the Punjab province.

For the next two years, the project moved very slowly. The parties could not agree on the size of tariffs for pumping gas. It is noteworthy that Russia demanded an increase in cost, otherwise the project was economically unprofitable. Then the next US sanctions were imposed on the Rostec corporation, the key executor on the part of Russia. That further impeded the implementation. 

Renaming the project – Pakistani Stream

Last fall, the parties revised the terms of the agreement again. This time exclusively at the request of Islamabad. The share of Pakistan’s participation in the project has grown from 51 to 74 percent. The condition of attracting and using only Russian materials, components and equipment is strictly stipulated. It was decided that Russia’s investment will not exceed 25 percent. Pakistan will cover all other costs. In the spring of this year, the project was renamed “Pakistani Stream”. The energy ministers of both countries announced their readiness to start construction in the very near future.

Pakistan is a country with a population of over 220 million. If you mark on tracing paper the location of all Pakistan’s power plants, and then superimpose this tracing paper on a physical map of the country, a critical imbalance will be visible to the naked eye. 20 stations operating on oil products. 22 thermal power plants operating on natural gas. Nine coal and three nuclear power plants. Pakistan needs light in the homes of its citizens and reliable sources of energy.

The implementation of the “Pakistani Stream” with a capacity of 12.4 billion cubic meters of gas per year will provide fuel for new power plants. That, in turn, will feed industrial enterprises concentrated in Punjab, on the border with India. If the project turns out to be successful, nothing prevents the gas pipeline from being extended to the capital. The transport shoulder from the city of Multan to Islamabad is just over four hundred kilometers.

Possible avalanche of global transformation

There is not the slightest doubt that the revitalization of the region is connected both with the political changes in Afghanistan and with the completion of the construction of Nord Stream 2. Russia has clearly shown that it is capable of completing any projects, even under the pressure of massive sanctions. India is striving to become the main metallurgical power in the world It simultaneously needs the iron ore of Afghanistan, coking coal and blue fuel from Russia. Pakistan wants to reach a new level of industrial development. This again requires natural gas, and all neighboring countries themselves are experiencing a deficit in it and clearly do not intend to share it with Islamabad. 

Afghanistan, in principle, is ready to absorb any amount of resources, since the electrification of the country, thanks to the incessant war, is at a medieval level.The American withdrawal from Afghanistan was the stone that moved an avalanche of global transformation. If the Taliban manage to keep the country from another all-out war of all against all, then in the very near future we will witness a battle for new energy, trade and industrial markets.

India will help Russia turn Arctic into global trade route

New Delhi is planning to assist in developing Russia’s Northern Sea Route (NSR). And turning it into an international trade artery, according to Indian Prime Minister Narendra Modi.

“India will help Russia in the development of the Northern Sea Route and opening this route for international trade the same way as Russia helps India to develop with the aim of space exploration and the preparation of the national manned Gaganyaan program,” Modi said, speaking via video link at a plenary session of the Eastern Economic Forum.

The Indian prime minister also said Moscow and New Delhi had managed to make significant progress in developing commercial ties despite massive disruptions caused by the Covid-19 pandemic.

The friendship between India and Russia has stood up against the test of time,” he said.

“Most recently, it was seen in our robust cooperation during the Covid-19 pandemic, including in the area of vaccines. The pandemic has highlighted the importance of the health and pharma sectors in our bilateral cooperation.”

According to the Indian head of state, an energy partnership between the two nations would bring greater stability to the global energy market.

Modi also said that such joint projects as the Chennai-Vladivostok sea corridor, which is currently under development, provide greater connectivity along with the North-South transport corridor.


Major deal on developing Russia’s Big Northern Sea Route sealed at Eastern Economic Forum

A broad agreement aimed at providing stable growth of exports, cabotage and transit traffic along Russia’s Arctic sea route has been signed at the Eastern Economic Forum (EEF) in Vladivostok on Friday.

Russian state nuclear corporation Rosatom and the Ministry for Development of the Far East and the Arctic agreed to closely cooperate on projects aimed at developing the transport artery stretching along Russia’s Arctic coast.

“The Big Northern Sea Route from Murmansk to Vladivostok plays an important role in transport security, and connects by sea the European part of Russia with the Far East,” Rosatom’s director general, Aleksey Likhachev, told the media on the sidelines of the EEF.

“We are interested in promoting cooperation under this project with both Russian and foreign counterparts,” he added.

The Northern Sea Route lies from the Kara Gate Strait in the west to Cape Dezhnev in Chukotka in the east. The Big Northern Sea Route includes the Arkhangelsk, Murmansk regions and St. Petersburg and the Far East from the Northern Sea Route’s border in Chukotka to Vladivostok. The 5,500-kilometer (3,417-mile) lane is the shortest sea passage between Europe and Asia.

Can Australia achieve economic growth without China?

By Stan Grant

China, India, Indonesia, Russia, Brazil: What do these five countries have in common?

They are the future. Our future depends on them. They are not the West.

Collectively, they will account for more than half of all global growth through to 2024, according to figures from the International Monetary Fund. Think again about that: five countries, 50 per cent of growth.

The giant among the five is, of course, China. It has already surpassed the United States as the biggest engine of global economic growth — 28 per cent annually between 2013 and 2018.

By the end of this decade, China is expected to overtake America as the single biggest economy in the world. And of the other four countries — Brazil, Russia, Indonesia, India — each lists China as its biggest trading partner.

The IMF says there is no way the global economy can grow unless these countries also grow. Yet in this week’s budget, did we hear mention of any of them?

No. We did not even hear mention of China. Incredible, given China is Australia’s biggest trading partner, too.

How is Australia handling this hinge point of history?

Australia’s trade with China dwarfs its trade with any other country: more than $90 billion, an enormous 43 per cent of all our exports. For comparison, the next biggest market is Japan, at $19 billion.

Trade is equivalent to 45 per cent of Australian GDP and one in every five jobs in the country.

Treasurer Josh Frydenberg has said this budget is about stimulating, spending and creating jobs. How do we seriously achieve that when our political leaders cannot speak to their counterparts in Beijing? 

In the meantime, we hear increasing talk of the “drumbeats of war”. How can we achieve economic growth and boost jobs when the Treasurer, in his budget speech, cannot mention China by name and instead makes allusions about a more dangerous world (read: China threat) and commits to ever more spending on our military?

This isn’t to deny that we live in a more perilous age or that an authoritarian China does not present a threat — or that we need to keep our defence force ready and equipped for any eventuality. But there are serious questions about how our political leaders are handling this hinge point of history.

China is an indispensable nation; our future depends on it. Our future depends on those other countries that make up half the world’s growth — countries we rarely even talk about.

This is not 1992. We have not just emerged from the Cold War; America is not the predominant or sole power in the world; this is not the end of history. We can no longer say, as Western political leaders did then, that China is on the wrong side of history.

The world is turning, history is turning

In its report The World in 2050, international professional services company PwC lists what will be the top 10 economies in the world:

1.China

2.India

3.US

4.Indonesia

5.Brazil

6.Russia

7.Mexico

8.Japan

9.Germany

10.UK

Where did the West go? The report says simply: today’s developing markets will be tomorrow’s economic superpowers.

Outside of the top 10, Vietnam, the Philippines and Nigeria will be the biggest movers in the rankings.

The report compares the E7 (emerging economies) with the G7. In 1995, the E7 were half the size of the G7; by 2015, the E7 had drawn level; by 2040, the E7 could be double the size of the G7.

A Rip Van Winkle “go to sleep and dream away the future” approach won’t work.

The West has been battered by war, growing inequality, stagnant wages, terrorism, economic collapse, declining democracy and rising political populism.

America — the so-called leader of the free world — is a country damaged by unending crisis.

President Joe Biden talks a good game about “America is back” and rebuilding alliances. But how does America lead a world where economic power has so dramatically shifted?

Betting against America

In his recent speech to Congress to mark the first 100 days of his presidency, Joe Biden said it was never a good idea to bet against America. But that’s precisely what many countries are doing.

China’s massive Belt and Road Initiative — one of the largest infrastructure and investment projects in history, covering 70 countries, 65 per cent of the world’s population and 40 per cent of gross domestic product — is a bet against America.

It is part of Xi’s China Dream of a rejuvenated nation, returned to the apex of global power.

Australia is caught in the crosshairs of this global historical turn. We are still a European outpost in Asia, a country with historical ties to Britain and all in with the US. 

It has served us well, but that world is passing. The geopolitical, economic and military plates are shifting as the world walks ever more treacherous fault lines.

But this isn’t the discussion we have been having post-budget.

Instead, we are talking about debt and deficit and vaccine rollout and possible election dates. Journalists are engaging in the usual round of predictable “gotcha” questions, and politicians are looking to score tit-for-tat political points.

All around us, the world we knew is giving way to the world we don’t truly understand, let alone are truly equipped for.

China, our biggest trading partner, is now a global Voldemort — he who cannot be named.

But call it what we will — or won’t — China looms over our world and it is dragging those other emerging economic giants along with it.

To stay with the movie analogy, for the West, there is no back to the future.


Source: ABC

CHINA’S GLOBAL LEADERSHIP LIST – CHARTS AND FACTS

A vast majority of Americans have absolutely no clue how advanced China has become. Look at the social media comments, and it’s clear that too many Americans – especially Trump supporters – are filled with misinformation and prejudice. “China is 100 years behind” … “All Chinese products are crap” … “China can’t innovate” … “It’s a communist, poor, polluted country” … and, of course, the most popular theme is “China’s economy is about to collapse.” It’s hard to change these opinions, since those people reinforce their biases by gleefully consuming and sharing only anti-China articles. Anything remotely positive about China is attacked as “Chinese propaganda.”

This potent mix of ignorance and hubris is also precisely why western corporations gladly and voluntarily shared their intellectual property (IP) with their Chinese joint-venture partners. The term “forced technology transfer” was invented retroactively only after Chinese corporations started threatening western profits — for example: Huawei has overtaken Apple, Nokia and Ericsson in smartphones, 5G and telecom infrastructure; BYD manufactures more electric vehicles than Tesla; Alibaba and Tencent process 50x more mobile payments than the US; and the most valuable (ByteDance) and the most innovative (Meituan) startups are Chinese.

While it’s true that China as whole has a long way to go in GDP-per-capita, many big cities in China are essentially “developed economies.” Plus, China has surpassed the US in many areas and is catching up in others.

If you don’t know your competitor, you’re certain to lose the game. So here are some quick statistics on China’s global leadership:

Economy, Manufacturing, Trade

=> #1 in PPP GDP (been so since 2014 when it surpassed the US)

=> #2 in nominal GDP ($13.5 trillion in 2018 and $14.4 trillion in 2019). And it’s as big as the next 4 countries combined!

=> #1 in exports (been so since 2009 when it overtook Germany)

=> #1 in container traffic (40% of global market). 7 out of the Top 10 busiest seaports are in China

=> #2 importer ($2.1 trillion)

=> #1 in manufacturing value added (been so since 2010 when China took the crown from the US, which had been #1 for the previous 110 years). The chart below is based on data from the World Bank

In spite of coronavirus/COVID-19, China’s manufacturing continues to grow and accounts for28% of global manufacturing. In fact, China is as big as the US, Japan and Germany combined.

=> #1 in foreign exchange reserves (>$3 trillion)

=> #1/#2 holder of US debt (>$1 trillion)

=> #1 banking system (twice the size of the US, in terms of assets). Surpassed the EU in 2016.

=> #1 trade partner for 130 countries (trade = exports + imports). And for 37 countries, China is their #1 export destination (meaning, they sell the most goods to China).

=> #1 in contribution to global GDP growth for the past decade (25-35%, which is twice that of the US). That is, if the world GDP grows by $100, then $25-$35 comes from China.

=> #1 in steel, cement, aluminum production (linklinklink). In three years (2012 – 2015), China used more cement than the US did in the entire 20th (link)

=> #1 in electricity generation (link)

=> #1 importer of crude oil (link)

=> #1 in purchase of industrial robots, accounting for almost 40% of global market in 2018 (link)

=> #1 in manufacturing of conventional cars (>26 million per year)

=> #2 in hi-tech manufacturing (Yeah, China isn’t just making t-shirts anymore)

=> #2 in billionaires (415 billionaires as of 2020)

=> #2 in millionaires (5 million millionaires)

=> #2 stock market, by market cap (overtook Japan in 2014)

=> #2 bond market, worth $16 trillion (link)

=> #1 in representation in Global Fortune 500 companies. (surpassed the USA in 2020). The chart below is from 2019. By mid-2020, mainland China had 124 and the US had 121 companies.

=> #1 in production of rice, wheat, potato, beer(!), tea, apple, strawberry, grapes and numerous other grains, vegetables and fruits. (link)

=> #1 in Middle Class population (350 million in 2018; and it overtook the US in 2015)

=> #1 country in the wealthiest Top 10% of global households (overtook USA). Now there are 100 million Chinese worth $110K or more.

=> #1 in poverty elimination (800 million lifted out of extreme poverty). Extreme poverty will be practically 0% in 2020.

=> #1 in online/e-commerce retail sales (3x the US)

=> #1 in personal luxury goods sales (35% of global market)

=> #1 retail market in the world by 2019 or by 2020 ($5.6 trillion) ($5 trillion)

=> #1 in international tourism spending (In 2010, Chinese tourists spent half as much as Americans; and by 2017, China was spending twice as much as the US)

Technology Superpower
=> #1 in Internet users (China had only 2 million internet users in 1998. It then grew to 300 million by 2008 and 900 million by early 2020).

=> #2 in Unicorns (startup companies worth more than $1 billion). 142 in China versus 175 in US. In 2020, the number of Unicorns are 227 in China versus 233 in the USA). Interestingly, 16 Unicorns in the US were founded by Chinese immigrants or Chinese Americans.

=> #2 in venture capital funding ($100 billion of new venture capital funding for about 2,900 startups last year )

=> #1 in e-commerce (42% of world market)

=> #1 in 4G mobile network (2 billion users)

=> #1 in Internet users (830 million people) and fiber-optic broadband users (320 million)

=> #1 in smartphones (Chinese brands have 50% of the global market)

=> #1 in solar, wind and hydroelectric power (link)

=> #1 in electric cars – manufacturing and sales (link)

=> #1 in consumer drones (70% of global market)

=> #1 in supercomputers (227 out of the 500 supercomputers are Chinese)

=> #1 in mobile payments (50x larger than the US)

Infrastructure Giant

=> #1 in skyscrapers – more than half of all skyscrapers are in China (link)

=> #1 in global infrastructure projects. China’s Belt and Road Initiative (BRI) involves 152 countries and international organizations. (link)

=> #1 in patents — accounting for almost half of all patents in the world!

=> #1 in international patents – according to WIPO. The US had been #1 since 1978 when WIPO/PCT was established. China had 58,990 international patents in 2019. Here’s an infographics

from WIPO:

=> #1 in science, technology, engineering and math (STEM) college graduates (4x as many as the US)

=> #1 in scientific publications since 2016. And also catching up on the Top 10% and Top 1% of these papers/articles. (link)

=> #1 in the world in math, science and reading proficiency among high school students

=> #1 in 5G (China owns about 40% of 5G patents, and the world’s leading 5G vendor and patent holder is none other than Huawei)

=> #1 in Artificial Intelligence (AI) funding, startups and publications (linklink)

=> #1 in R&D spending in 2019 – according to US National Science Board; here’s an updated article for 2020. In the chart below, brown = USA and purple = China. The chart shows only up to 2017.

=> #2 in number of satellites in orbit/space (280 satellites as of 2018). In 2018, China became the first country to land on the far side of the moon. In both 2018 and 2019, China was #1 in rocket launches.

What should the US do? Try to “contain” China? Start World War III to maintain global hegemony? Become depressed and paranoid? Thankfully, the answer to all those questions is, “NO.” There are constructive things that America can and should do to prepare for the future.


-Chris Kanthan

Originally published on WORLD AFFAIRS