April 2021 – Mariana Vargas – For the past two decades China has implemented economic reforms that boost them into a free market, innovative and expanding economy. The imperial China in the 1800`s and 1900`s was aimed towards a “Middle Income Trap”, known to happen to countries that lack reconstruction of its economic model, makes their economic rates lower and they experience difficulty adopting new sources of economic growth.
Therefore, China began its project to rely less on fixed investments and exporting and more on private consumption, services and innovation to drive economic growth. There innovation ideas can be seen few projects they began implementing.
The Belt Road Initiative (BRI) the 4$ – 10$ trillion dollar project was created to provide a big boost to China`s economy and soft power image along 86 countries members, that would begin in China and cross Eurasia. Raising alarms to the United States of America, of course, questioning their ability to “create” new jobs and impulse foreign economies when they can easily be imposing debt to each country and their own economic system.
Another great example is the 2015 project “Made in China – 2025” implemented in 2015 to increase the competitiveness of Chinese industries, forestering Chinese brands, boosting innovation and reducing China`s reliance on foreign technology by making China a major dominant global manufacturer. This project could, in President Xi Jing Ping words, “transform China from a manufacturer giant into a world manufacturing power”.
The pattern that can be seen in China`s behavior is less dependency on foreign countries and let their economic and political future depend only on them. Xi Jing Ping might be the second greatest political leader China has had after Mao Ze Dong. He has consolidated China to be one of the greatest economic growing countries in history. To back up this statement we would like to show the following figures: 800.000.000 people rose out of poverty once economic reforms were implemented. By 2018 China`s GDP grew up to 9,5%. Thanks to their fast growing trade flow, China became an extremely important trading partner to 130 countries in the world by 2018. (Source of previous data: World Trade Atlas and China`s customs Administration.)
This means Chinese importing and exporting activities rose from a 9,3% to a 17,8% (2018).
Let’s never forget China`s ability as an strategic world known player. Their power, influence and capability make them a threat to vulnerable countries with weak economies, especially after COVID-19 stroke in 2020. Latin America could be the first on this list, providing Chinese – based companies to buy assets of financial distressed western companies. Making China grow and expand while leaving United States and Europe stagnated.
Chinese presence in Latin America have expanded to the security, business and political sectors. With the Peoples Liberation Army (PLA) China has participated in elite training programs in Brazil or courses in Colombia, besides exchanging equipment with Peru and Colombia.
They have invested approximately 122$ billion in the region in mineral, financial, electric, digital and telecommunication markets, participating in enterprises such as Claro, Movistar and Telefonica. Building operating networks and transatlantic fiber optics connections, smart cities in exchange of surveillance technology, financial data and sensible information. (Source: NDIA business and technology magazine, Evan Ellis.)
China`s goal might be building a strong and diverse economy, but it never gets its eye off the ball. All actions taken by the woken giant are calculated and precise. China imposes itself in countries by strategic investments, soft power and by finding the weak spots their politicians might have. Turns out the dragon became unstoppable.