飞利浦草坪灯:Europe should not count too much on Chinese c...

来源：百度文库 编辑：九乡新闻网 时间：2024/04/30 02:46:23

Europe should not count too much on Chinese cash

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2011-9-19 14:47


By Henny Sender


Last week, the Chinese government sent a delegation to Europe led by Lou Jiwei, the chairman of China’s sovereign wealth fund, to get a sense of just how bad things were and how much worse they might get. In the fancy hotel lobby lounges of Beijing, the whereabouts of senior Chinese officials such as Wang Qishan, the vice-premier of China, and the heads of the Chinese banks are the subject of constant speculation.


There are rumours that the Chinese have been buying Bunds and will make a fortune when (not if) Germany leaves the eurozone and reinstates sound Deutschmarks for the ill-fated euro. There are tales of desperate Italian and Spanish bankers offering stakes in their banks to possible buyers from the mainland as they plead for cash infusions.


The US turned to the Chinese for rescue finance in 2007 and 2008. Now it is Europe’s turn to seek a slug of the $3,200bn in China’s coffers. The developed world is turning to the developing world for cash – which of course isn’t the way capital is supposed to flow.


Capital is supposed to go to countries where growth is faster and productivity can be improved by capital investment.



It isn’t supposed to go to more tired economies to support consumption from already overleveraged households and governments.


Still, in some ways, it is hardly surprising that the world is turning to China for financial aid. China has arguably been the biggest beneficiary of globalisation.


When the rest of the world grows, China prospers. Every 1 per cent of growth in the US translates into 5 per cent growth in Chinese exports, according to data from JPMorgan.


Yet European hopes for Chinese cash may be dashed – at least in the near term.


The glib explanation is that one lesson that Chinese officials have absorbed from the first chapter of the global financial crisis is that there is little upside in catching a falling sword.


But another is that China’s agenda is still overwhelmingly domestic. It is much less bothered about the rest of the world than one might expect from the world’s second-largest economy.


It is natural for China to focus inwardly at a time when the country is outgrowing the model that brought the country so far so fast in recent years.


In some ways it is making progress as it tries to shift gears. It is becoming less reliant on exports (something that Japan never achieved). Wages are rising, helping the transformation into a domestic demand led economy. Income differentials between the eastern coast and the rest of the country are diminishing.


Beijing has done a good job in slowing rising residential property prices (and calming the anger of its people who find housing increasingly unaffordable).


But in other ways, progress has – if anything – gone into reverse, especially in dislodging the grip of the state-owned enterprises on the economy and the financial system. In other ways, though, China is less fair today than it was a few years ago. Inflation is part of the problem, especially when combined with the failure to dismantle other controls.


Thus, for example, China’s workers get negative real rates of interest on their deposits because of controls on interest rates at a time when inflation remains at more than 6 per cent, while state owned enterprises get to borrow at artificially low rates.


In effect, that lets less wealthy households subsidise rich enterprises (which then go on to put the proceeds into the shadow banking system for far higher returns – and incidentally make serious money from their inappropriate financing activities).


China is also becoming far less open. When, for example, HSBC was told to sell its stake in the Bank of Shanghai, it was explicitly informed it needed to sell to a Chinese buyer, a message that International Finance Corp, a unit of the World Bank, also received when it sold its minority stake in the same bank.


Partly, of course, China has learned that western capital is not stable capital. But regulatory interference in what should become market-driven processes has become more pervasive.


The perception here in Beijing is that the world continues to treat China shabbily, despite all evidence to the contrary.


What is startling to a visitor to this ever more prosperous capital is how little trust for the rest of the world has come with the prosperity. There is a sense that when foreigners make money in China, it is a zero sum game and that China itself is somehow diminished.


Much of China’s agenda is good but it won’t help the world nearly as much as the world hopes – at least not any time soon.
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