In recent days, I pointed out how Trump’s visit in China has been a win-win for both countries and I expressed my concern for the marginal role that Europe may play in the future. However, during the weekend, the highly respected Bloomberg published an article where the author, unlike me, argued that Trump’s visit to China has been lose-lose outcome. I always find helpful and welcome people who can offer different views from mine. So let’s see, what are the arguments that Bloomberg puts forward against mine.
China is shifting its attention to the green economy, but it is not new because this process started 3-4 years ago. The most interesting thing, in my humble opinion, is how, through the push towards the green economy, the party is trying to forge a new alliance with the people.
Nobel Prize in economics so was awarded to Richard Thaler, surprisingly a professor at Chicago University, the cradle of rational economic’s. However Thaler believes that when doing economic analysis we must take into account the human and the psychological factors which may lead to not-so-rational choices. Predicting side-effects and unintended consequences would then be part of the model
China continues to produce technological innovations also in the historically dominant domains of the West. It works a unified system, and all expansion plans, cross-border M & A, investment and more are part of a very precise plan. Moreover, China, just like a corporation, acts according to a five-year plan. We, in Italy, should also take this as an example, without necessary turning Italy into a state-planned economy.
The Chinese economic and financial system has the capability to react to shocks, re-adjust to new needs and face crisis with a degree of flexibility and speed of execution that no other country in the world has. However, the growth of the Debt/GDP ratio is, by no mean, a surprise, rather the natural outcome of some well-known factors.
There is a certain similarity in the way China and France carry out cross-border M&A. Both countries act in a systemic manner, both when dealing with inbound and outbound transactions. However, the reality is often different and national interests prevail over liberal approaches. China tries to find a balance between those two pull factor and the recent One Belt One Road initiative, or the New Silk Road, maybe the way for China to persuade international partners that the country is indeed committed to open trade and open investments.