Opinion Op Ed 30 Sep 2019 As China, at 70, hit ...
The writer is an advocate practising in the Supreme Court. The views expressed here are personal.

As China, at 70, hits back at the West, India needs to watch out

Published Sep 30, 2019, 12:22 am IST
Updated Sep 30, 2019, 12:22 am IST
It is important to check China’s contemporary economic and financial standing.
China nevertheless appears undaunted, as is evident from its audacious moves in global stock markets.
 China nevertheless appears undaunted, as is evident from its audacious moves in global stock markets.

The People’s Republic of China will turn 70 on October 1, 2019. Preceded by the 110-year “national shame and humiliation” inflicted by Western merchants, missionaries, armies and their carbines, corporations and other entities, the erstwhile Middle Kingdom feels it is time to hit back. The year 2019 is thus China’s time to do a role reversal, and establish itself as the dominating, domineering state, giving the West a taste of its own medicine — essentially through economics and money power. The goal — to take over and possess the financial nerve centres of the West, through multiple means, to extend influence and shape the future course of global demography.

It is important to check China’s contemporary economic and financial standing. With a $12.238 trillion GDP (2017), it is second only to the United States’ $19.485 trillion (2017). It’s the biggest economy by purchasing power, of $23,190 billion, followed by the US, India, Japan and Germany. In numbers of millionaires, China stands third; after the US and the European zone. Its seven per cent economic growth, despite the slowdown, is way ahead of the West and India’s five per cent. With 10.33 per cent of total world exports (goods, services and incomes) in 2017, Beijing is the third biggest exporter, after Europe’s (19 nations) 16.43 per cent and America’s 12.47 per cent.

 

Also, China is the biggest trader of goods. It tops the list of exports and stands second to the US in imports. In balance of payments and its current account, China’s surplus stands fourth, at $195,117 million (2017), behind the US, Europe and Japan. And finally, China’s $3.168059 trillion (end-2018) official reserves stands far ahead of second-placed Japan’s $1.270,402 trillion and third-ranked Europe’s $821.608 billion. India’s $430 billion reserves, however, positions it within the top 10 nations.

The People’s Republic, therefore, has come of age, having shed China’s “inglorious” past of 110 years (1839-1949). Nevertheless, as it happens now and has happened in the past, no nation can resist the temptation of ruling the waves, and expand its horizon of influence — through monetary or muscle power.

This “historical inevitability”, however, is often either ignored or forgotten by those who aspire to attain greatness, and China is no exception. The bigger the nation or its “zone of influence” aspirations, the larger the number of adversaries. China’s present position is thus being countered by the West and its allies in matters of trade, tariffs, telecommunications, technology, territory, currency and commerce.

China nevertheless appears undaunted, as is evident from its audacious moves in global stock markets. China’s attempt to attain numero uno status constitutes a direct challenge to not only the West, but also the non-Western stock exchanges of Tokyo, Seoul and Mumbai. The writing is on the wall. China at 70 is keen to establish and stamp its position, and there is little to indicate that it will cease or slacken its efforts to attain what it aspires for. China’s now-or-never “time has arrived”.

Thus, 18 years after that fatal Tuesday — September 11, 2001 (9/11) in the United States, Hong Kong Exchanges Clearing Ltd (Hong Kong Stock Exchange) announced in September 2019 that it had offered to buy the London Stock Exchange Group for $36.6 billion, thereby signalling an unprecedented ambitious and audacious push to penetrate the West to extend Beijing’s global reach.

Being a sensational attempted coup of sorts (though non-military), the West is undeniably rattled. India now needs to be watchful and careful too; as New Delhi stands highly vulnerable in the face of Beijing’s 70th birthday drive. Anything is possible at this point.

One needs to learn more about the Chinese modus operandi. Thus, “when Laura Cha landed at London’s Heathrow airport on Thursday, September 5, she was ostensibly in town to see friends and family and to catch Mark Tucker, chairman of Hong Kong Shanghai Bank Corporation, on whose board she sits. But the US-educated executive was also on a secret mission, codenamed Project Lima”. As chairman of the Hong Kong Stock Exchange, she and her chief executive, Charles Li, had “requested a meeting with their opposite numbers at the London Stock Exchange (LSE)”.

“On Monday morning (September 9) at 10 am, they descended on the LSE’s headquarters in the shadow of London’s St. Paul’s Cathedral, and in a 50-minute meeting they dropped their bombshell”. Hong Kong (Stock Exchange) wanted to buy London (Stock Exchange) for £32 billion.

Understandably, therefore, it would be in order to have a glimpse of the global stock market scenario to realise and visualise the potential “new world order” and what awaits the future. Of the top 15, the New York Stock Exchange with a listed market capitalisation of $22.9 trillion is followed by New York’s electronic Nasdaq (National Association of Securities Dealers Automated Quotation), with a market capitalisation of $10.85 trillion. Tokyo SE stands next with $4.5 trillion, followed by Shanghai SE at $3.99 trillion; Hong Kong SE at $3.94 trillion; Euronext SE at $3.92 trillion; London SE at $3.77 trillion; Shenzhen SE at $2.51 trillion; Canadian SE TMX of Toronto at $2.09 trillion; Bombay SE at $2.05 trillion and the 11th placed National Stock Exchange in Mumbai at $2.03 trillion. The 12th to 15th placed stock exchanges are Deutsche Frankfurt SE at $1.9 trillion; Swiss Zurich SE at $1.53 trillion; Seoul SE at $1.47 trillion and Sweden’s Nasdaq Nordic Stockholm SE at $1.38 trillion.

Coming back to the London SE, the bosses clearly “felt ambushed”. All the more as Hong Kong made things much more difficult for London by a direct appeal to the West’s shareholders within 48 hours after the London SE board formally rejected the bid. Nevertheless, the writing on the wall are there for all to see. No one expects the Chinese to remain idle in the year of their high-profile 70-year birthday celebrations, which has targeted mega-projects to attain global status through Sun Tzu’s classic — “surprise, deception and mobility” — from military to monetary to market matters.

What lies in store for India? In this writer’s view, danger lurks in the vicinity. And this may be closer than one can expect or anticipate, owing to the visible slowdown of India’s rate of growth and virtual emergency-like measures adopted by the Government of India. India always had to weigh between growth and inflation in the past. However, this is far more difficult today: Too many pulls and pressures from within, and now the external enterprise of China is a cause for concern. China’s much-touted Belt and Road Initiative will brook no hurdles. Its present target is the world’s stock markets. India must note: today it is London. Tomorrow it may be Brussels, and the day after it could be the turn of the Bombay Stock Exchange.

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