Will it be the China's century?
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The deal is done: Geely, until a few years ago a relatively unknown Chinese carmaker, has got its hands on an iconic marque, Volvo. Even though the Swedish company has long been mired in difficulties and integration is likely to be a painful process, are some Western media, politicians and public opinions right when they are worried about a "Chinese economic imperialism" ?
For Napoleon, China was a giant best left to sleep lest it shake the world. Now that it is rousing itself, what sort of power are we dealing with? Predatory or restrained? Economic or military? Responsible or inward-centered?
Analysing whether China is a force for good in the world or whether its ascent simply reflects the decline of others can point to reasons for hope - or for concern - in the century to come.
The Chinese economy today is in rude health, accounting for more than 50 percent of global growth last year. Some local players have acquired the technological expertise that puts them on a par with their international peers. Should the Western firms ride on their coattails and reap the benefits, like Airbus with its assembly line in Tianjin or like Safran, which is providing the engines for the C919, future rival of the A320? Or should Western firms slink away, fearful that by transferring know-how we will be creating a new generation of competitors? The path taken by some groups - including Apple, even though its products are extensively imitated, or Nokia, which is investing in a global research and development centre - seems to suggest that the only solution is constant innovation and creativity.
In the financial sphere, the contrast between Western and Eastern strategies is extraordinary. At the very moment when the markets are weak, China launches short-selling - a practice that the West has looked upon with disdain since 2008. Same with insurance companies being allowed since Sept 5 to invest in Private Equity - at a time where Solvency II regulation might wipe out insurers from this asset class. And at a time when the recovery is still uncertain, the new ChiNext stock market took off with a roar. With the debate over tax havens in full swing, Hong Kong is positioning itself as the financial center of choice. And just as Europe is showing the door to investment funds, the sector is booming in China with the declared aim of financing innovation and, possibly, the optimization of State-owned enterprises.
The war for talent is heating up. CIC, China's sovereign wealth fund, has been recruiting in New York and Europe in recent months. The fact that London has now become one of the most heavily taxed cities in the world is triggering a brain drain to Hong Kong, Singapore and Shanghai. Is that China's fault? Surely it's down to a lack of foresight on the part of the United States and Europe.
When it comes to assets, China is indubitably hungry for mines, technology and brands. That is the logical conclusion of its role as the workshop of the world, which, incidentally, has richly rewarded shareholders across the globe. The risk of friction is real. However, in some cases, Chinese groups have merely been taking advantage of the noted absence of international companies. On that score, the blame has to be attached to the lack of a long-term and scalable industrial vision in Europe and the US. Investment in research and development, with the failure of the Lisbon agenda, and the development of green industries are among the casualties. China's investment in the cleantech and energy sector surpassed last year the cumulated investments of both Europe and the US.
Finally, the new frontiers: Africa conducts more trade now with China than it does with the United States. Relations with Brazil can be judged by the presence of more and more Brazilian businessmen in Beijing or Hong Kong. China is filling the void left by a Europe that is still hesitating between its colonial past and its abandonment of Africa since the 1970s. Tension is palpable between those in favor of capitalising on China's dynamism and others who are opposed on moral grounds opposition that is laudable but scarcely credible when viewed through the prism of history. It is also beyond dispute that China has enabled many countries that globalisation has passed by to invest at least a little.
The rise of a powerful China can be likened to the rewinding of a clock that stopped several centuries ago. But we also have the picture of a country with different values, an intense desire to catch up and learn, and an infinitely malleable pragmatism. For all of China's undeniable successes and its new self-confidence, it is the shortcomings of the US and an un-ambitious European Union that have abruptly hastened the emergence of the Middle Kingdom.
The author is managing partner of a european investment group, Beijing.
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