The recent G20 Summit in Cannes, France, provided evidence, if ever it was needed, that the balance of global economic power has dramatically shifted eastwards. The big question in the media was "Can China save the Eurozone?", an idea that would have been laughed at only 5 years ago!
It now seems that the very survival of the European, if not the global economy, depends on China's willingness and ability to:
- support the financial package to save the Eurozone, and
- maintain their own economic growth levels so as to ensure continuing growth in Asia and the countries that most depend on China for their exports (particularly the large resources countries: Australia, Canada, Brazil etc)
China seems to be making all the right noises on both issues. They have already indicated their willingness to offer support to the Eurozone by increasing their contribution to the International Monetary Fund (a fund which ironically was established by the G7 countries to support emerging economies) and there is general confidence that they will manage a "soft landing" of their economy from GDP growth of 10.4% in 2010 (a level which was creating an over-heating, particularly in the property sector) to the 30 year long term average of 8.5% in 2012. Most seem to predict a growth rate of 9.2% in 2011.
I was interviewed on SBS Mandarin News Australia which provides an interesting perspective on these issues from a Chinese perspective (with subtitles). Please click on the link below to watch this: