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Controlled expansion

Sometimes it loses the prospect that China is not an open market.

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Controlled expansion

Since China is world's second largest economy in terms of production, investment capacity and influence, its business-space occupation movements in almost all geographic areas have logic. Chinese financial investors have spread easily in Latin America and Africa; They seek profitability and influence and often get both. China behaves as an expansionary economic power. However, investment flows have down this year; In first nine months of 2017 Chinese investment abroad has fallen by almost 42%, because Chinese government has decided to cut capital outflows abroad. The economic team of Xi Jinping considered that it could not assume risk that an outflow of capitals weakened its financial system, whose solidity, by way, is one of great mysteries of its economy.

But re's nothing mysterious about Chinese expansionism. The country has sufficient liquidity, re is undisguised capital accumulation, technology deficit, and improved domestic consumption capacity. Money looks for opportunities abroad. It has done so by following somewhat eccentric patterns in relation to Western investment modes. Beijing's investment was well oriented to purchase of energy and natural resources, or to acquisition of technology companies. It is proverbial apparent Chinese disinterest towards subtleties of profit margin or optimization of profits. Understand, it is not that Chinese investors despise m; They just didn't privilege m. As it suggests its repertoire paremiological, Chinese are considered patients; That is, y bring toger a harmonious mixture of wisdom and self-confidence.

Separate topics, Chinese expansion, observed from afar, begins to offer anor aspect. In first place, because its speed of expansion is moderated. The balances between large monetary areas plus pressures of US and Europe slow down what many economic managers of dollar and euro consider commercial ventajismo. There are also reasons for internal politics and caution in power elites. But keys are hidden and are only available to a few chosen.

The compulsive purchase of companies does not only comply with availability of liquidity, facilitated inter alia by financial exchanges that for decades have agreed to treasures of great economies. Particularly to United States. It has also been due to need to incorporate into its production technological knowledge, restricted by Western governments that assimilate, by derivation, to technology to armament. In honor of China's investment, it must be said that y have persevered in ir efforts, that y have not been arredrar by limitations of Governments and that little by little y have become, thanks to ir ability to seize opportunities, in saviors of companies in crisis; They have descended even to detail of football, as it is well known in Spain.

What is to be resolved in Chinese enigma? As a precise knowledge of its financial system, which is, to put it in vulgar terms, Achilles heel of its economic stability. And, in short, reciprocity is a serious problem. China benefits from a global trade scheme of widespread freedom while foreign investment in China is bogged down in endless processes and frustrating results. Sometimes it loses prospect that China is not an open market.


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