China Continues Pro Globalization Efforts despite Global Policy Change
Feb 08, 2017

China is continuing pro-globalization efforts despite global policy changes, notably in the White House. Let’s look at what China has done to improve its global ties politically and economically over the past few years and it’s positioning for continued growth and domination in the years to come.

China’s Expanding African Influence

China has made significant inroads into Africa both in terms of trade and influence. For example, China’s import export bank gave over 62 billion dollars in loans to African nations between 2001 and 2010, 20% more than the World Bank did.

Around 22 billion dollars has been invested in Africa by China in natural resource extraction, power generation and infrastructure, with products like copper, oil and agricultural exports going back to China. The biggest investments have been in Angola, Sudan, Nigeria and South Africa. China is projected to become the biggest trading partner with Africa with an estimated 1.7 trillion in trade in 2030. It was 166 billion dollars in 2014. The relationship mirrors prior colonial patterns where Africa exports raw materials and receives mostly manufactured goods in exchange.

Online MBA learning resources help you to learn both the history of trade and development and the trends that are affecting international business today.

China's Growing Influence in Asia

The China-Pakistan Economic Corridor running from Gwadar in Pakistan to Xinjiang in China is supported by a 46 billion dollar agreement. This is just one case of China developing land-based trade routes and production facilities in Asia. China is building a new silk road through Central Asia to give it non-maritime trade routes to Europe and a new “maritime silk road” through Pakistan to reduce reliance on traditional sea lanes.

Japan is wary of China’s literal construction of islands to bolster claims to territorial waters and shipping lanes. Yet it entered a Yuan-Renminbi trading pact several years ago that lets the two nations trade directly instead of using American dollars as an intermediary currency. This pact was partially a hedge against American currency inflation and partially a step to improving trade between the two often hostile nations. China has also shifted from devaluing its currency to maximize exports to the U.S. to improve its trade volume with the rest of Asia. If you get an MBA online, you will better understand the economic factors behind currency valuations and government policies that partially determine the value of currency.

China has been expanding its influence globally for a number of years both to gain stronger dominance in key regions and improve its trade relationships with parts of the world the West has neglected. China is working most actively in Central Asia and southern Asia to dominate its part of the world and gain multiple trade routes with current major trading partners in the West. China has long set its trade policies to what was in China’s best interest, though it is criticizing the U.S. for finally doing the same. U.S. – Chinese trade is not likely to change dramatically, but China has already positioned itself to be less reliant on U.S. imports for its continued economic growth.

Photo credit / China Dialy