High level meetings between Chinese and Western politicians have become increasingly regular over the past decade. This is hardly unsurprising due to the growing economic power that the China now wields in the world economy. The familiarity of such sights signals a restructuring of global political economy relations. The visit this week of Chinese Premier Wen Jiabao to the UK, therefore, is not unusual in itself, but can be seen as international dialogue and diplomacy in the context of structural changes in global economic relations.
The Chinese Premier met David Cameron on Monday for a ‘business summit’ to discuss various international business agreements and the potential for expanding bi-lateral trade between the states. Jiabao is then going on a three day tour of the UK visiting various landmarks and areas of Chinese investment.
For quite some time the EU has been a major export market for the Chinese, with the trade bloc the destination for over 50% of China’s exports. However, recently this rather one-dimensional nature of trade and economic relations has shifted. The success of Chinese exports has built up a substantial trade surplus, allowing for considerable investment overseas. Over the past decade, Chinese investment in EU businesses, government bonds and currency reserves has increased dramatically. It is not just the size of the investment, however, that has brought about significant changes in economic relations, but the nature and timing of them.
The combination of China’s trade surplus and the CCP’s (Chinese Communist Party) interest in escalating their level if overseas investment has led to western politicians spending a great deal of time courting the Chinese government in securing business deals for business interests. For example, the headline subject of the recent meeting between Wen Jiabao and David Cameron was the securing of a multi-million pound business deal on large scale coal gasification for UK based Seamwell International. Chinese investment in the UK has been largely manufacturing based, with MG plant in Birmingham under Chinese co-ownership. EU states are also starting to realise that re-orientating their own exports towards China is a vital path of growth over the coming decades, as China’s middle-class expands and demands more consumer products.
In the financial world, Chinese capital has played an instrumental role of late, especially since the financial crisis of 2008. It is impossible to know the full extent of the Chinese government holdings as they are considered a state secret, but it is widely thought that government bonds issued to finance the ‘rescue packages’ in the recent financial crisis have been heavily invested in by China. It is also believed that China owns a large amount of the debt used to bailout the Ireland, Portugal and Greece.
As the trade relationship between the EU and China changes in structure and size, western countries will have to accept two new economic conditions for the 21st century. Firstly, that China will have a great deal of influence due to the level of FDI (Foreign Direct Investment) and holding of government debt. Secondly, a China will become a major export market for EU manufacturing industry and that successful growth strategies will follow this trend. On the flip side, China will also have to realise its growing responsibility and economic integration in the region. Such widespread ownership of European government bonds and investment in business makes the EU an area of immeasurable economic importance and, arguably, to significant to ignore if economic growth in the region falters in the coming years.
In international business negotiation and financial investment it is essential that vital information is not held up by language barriers. Therefore, accurate and professional translation and interpreting is absolutely essential. At TJC Global, we have an extensive network of translators and interpreters experienced in international business relations, foreign financial investment and technical fields. This ensures that the translation or interpreting is accurate, professional and tailored to the specific needs of the client.