A wave of investment from China is breaking across Europe. Chinese takeovers of technological leaders have raised fears of a sell-out of our economies’ competitive advantage. In Germany, the Chinese Midea group’s offer to buy a controlling stake in the Bavarian robotics manufacturer Kuka has triggered fierce resistance.
In March 2016 China’s leadership set the goal to abolish poverty by 2020. This is an ambitious benchmark, considering that 56 million people still live below the domestic poverty line. In times of slowing economic growth it will be difficult for Beijing to keep its promise. The lagging progress in economic restructuring and a tense labour market even raise the risk that millions could fall back into poverty after having climbed out of it.
The German economy’s innovative strength relies on its “Mittelstand”. Small and medium sized enterprises have helped Germany maintain its leadership in automation and smart manufacturing. Selling these companies to foreign investors would be equivalent to giving up Germany’s grip on the technological future.
This would be the opposite of what German government and industry leaders had in mind when they devised the Industry 4.0 strategy, which is designed to usher in the next revolution in manufacturing through the advanced digitisation of production.
On May 18-19, representatives from participating states and partner countries will gather in Berlin for an Organization for Security and Cooperation in Europe (OSCE) conference on economic connectivity. While China is not a part of the 57-member organization, the German OSCE chairmanship has invited senior Chinese officials to join the discussion.
One of the hottest bets in today’s financial markets is over the question of how long China can keep selling US dollars (USD) before the People’s Bank of China runs dry. At the rate at which the central bank currently employs the country’s once legendary currency reserves to defend the Chinese yuan (CNY) against an unwelcome speed of depreciation, some investors are betting on less than three years.
China has joined the club. With the passage of a law to govern the activities of foreign non-governmental organisations, Beijing has followed in the footsteps of many other authoritarian states. Western media mostly portrayed this move as an outright attack on civil society.
Donald Trump does not come across as someone who would seek good relations with China as president of the United States. At a campaign rally on 1 May the presumptive Republican presidential candidate used blunt language when he accused China of engaging in unfair trading practices vis-à-vis the US. “We can’t continue to allow China to rape our country”, he told a crowd in Fort Wayne, a working-class city in the state of Indiana. “It’s the greatest theft in the history of the world.”
As part of a massive modernisation programme for Australia’s navy, the government in Canberra has placed its order for twelve new submarines. The $39 billion (€35 billion) deal with the (largely state-owned) French company DCNS, is a blow to its competitors in Germany and even more so in Japan. Up until the last minute, Mitsubishi Heavy Industries had seemed on track to win this contract – and in Tokyo the rejection is perceived as an economic loss as well as a diplomatic snub.