As the world recovers from the worst pandemic in a century, we see China as an integral, if not indispensable, part of the global supply chain.
Michael Pettis, a long-time Beijing resident and economist, senior fellow at the Carnegie Endowment, considered one of China’s top economic experts, recently released the results of a Pew survey which found that the majority of Europeans respondents “seem to believe that China is the dominant nation in the world”. economic power”.
This notion runs counter to the real data, which shows that the United States has a GDP about $6 trillion larger than China, as well as the largest stock market in the world, the most dominant currency. in the world and the wealthiest individuals.
“Do they think China is the biggest economy in the world or is there some other reason?” Pettis asks.
Among the responses was that of Andrew Haynes, a Canadian working in the energy sector. “They see major (acquisitions) and investments by Chinese companies, and see major sales of China-related commodities, in and from their countries, and they equate this with economic dominance,” he wrote. .
In Italy, for example, residents might view China as the dominant economic force after purchasing economic and cultural icons such as Pirelli Tires and Inter Milan football club from Chinese buyers. A high-profile attempt to buy AC Milan from former Prime Minister Silvio Berlusconi by Chinese investor Li Yonghong ended in failure, but it grabbed headlines for months, no doubt fueling further the perception that the Chinese are the world’s leading economic force.
And if the source of perceived economic dominance is consumer goods on store shelves during Europe’s looming energy crisis, China could indeed be the powerhouse. According to the official China Daily, there has been “explosive growth” in exports of heaters and other heat-generating products to Europe.
It says that “statistics from AliExpress, the Alibaba Group’s business-to-customer site that sells consumer goods in overseas markets, showed that sales of heating appliances such as electric blankets in the European market jumped nearly 300% in September compared to August.”
Additionally, there is a strong demand for heat pumps – devices that collect ambient heat from the air and ground and then compress it to heat water – especially in Germany, Poland, the Netherlands and in the UK, with orders up more than 100%. year-over-year for the past 90 days, according to the newspaper.
“As natural gas supplies from Russia become volatile and energy prices continue to soar, China’s energy-saving heaters at reasonable prices are gaining more and more popularity with European consumers,” Liang Zhenpeng, an independent consumer electronics analyst, told China Daily.
Consumer demand and perceptions run counter to growing efforts by the European Union and individual countries to rein in what they see as unfair barriers to open trade and investment. Today, China is the largest exporter in the world and the largest source of goods imported from the European Union. In turn, it is the EU’s third largest export destination after the United States and the United Kingdom.
At the 9th EU-China High-Level Economic and Trade Dialogue last summer, “the EU raised concerns about the business environment, including the lack of a level playing field and the growing politicization of the business environment in China,” according to a statement from the European Commission following the trade summit. “This is leading EU companies to reconsider their existing operations and planned investments in the country.”
Valdis Dombrovskis, the committee’s executive vice-president for trade, said he “stressed the need for continued engagement to build more balanced and reciprocal trade and investment relations between the EU and China” during a meeting.
And while consumers welcome affordable products made in China, a survey by the Central European Institute of Asian Studies of 13 European countries found that the Covid-19 pandemic has eroded trust in the Asian giant.
More than 50% of respondents in Sweden, France, Germany, UK, Czech Republic and Hungary now have a negative view of the country, with people from Latvia, Serbia and Russia being the only respondents to have a positive opinion.
“When looking at various aspects of interactions, only trade with China is viewed overwhelmingly positively in most countries,” said report author Richard Q. Turcsányi. “In comparison, Chinese investments are viewed somewhat more negatively, with only a minority of countries – such as Serbia, Russia, Latvia and Poland – leaning towards the positive.” Chinese investments are the most negatively perceived by respondents from Sweden, France and Germany.
Similarly, the Belt and Road Initiative was perceived rather positively in Serbia, Russia, Latvia, Italy and Poland, while the other countries surveyed lean towards a negative opinion.
Yet, in terms of perceived economic power, among most citizens surveyed, China is still considered more powerful than the US, EU and Russia. All of this shows that people can sometimes think globally, but they live locally. Few read the latest data from the International Monetary Fund.
And most avoid ideology when it comes to their own wallets.
As the world recovers from the worst pandemic in a century, we see China as an integral, if not indispensable, part of the global supply chain. This is perhaps what the man in the street intuitively confuses with economic domination.
– Jon Van Housen and Mariella Radaelli are seasoned international journalists based in Italy