The tensions between UNITED STATES and the Chine, two of the world’s greatest powers, have deep roots that span decades. Although their relationship has seen moments of cooperation, especially after China opened up to the world in the 1970s, fundamental differences have always existed. These differences encompass a variety of areas, ranging from political ideologies (liberal democracy versus communism) to geopolitical ambitions, to concerns about human rights, trade and technology.
As China rose to greater economic and military stature in the 21st century, the United States saw this growing power as a potential threat to its global hegemony. That rivalry has escalated with trade disputes, allegations of technological espionage, tensions around the South China Sea, and differences over issues like Taiwan and Hong Kong. These disputes are not simply circumstantial, but reflect a strategic competition for global influence and primacy in the international order.
An economic change that will hurt!
One of the most striking indicators of the changing relationship between Chine et the west is the drastic change in financial flows. Historically, Chinese companies have actively sought overseas investment opportunities, and the United States was often at the top of their list. Yet a recent study shows a dramatic drop in such investment, signaling a potential shift in Beijing’s economic ambitions.
Since the start of the year, Chinese investment in mergers and acquisitions in the United States has plunged to levels not seen since 2006, totaling just $221 million. When comparing this to the previous year, when investments were $3.4 billion in the same period, the magnitude of the change is undeniable. It’s not just a question of numbers; this decline in Chinese investment in the West indicates a strategic reassessment on China’s part of where and how it deploys its capital.
Although the technology sector is the main scene of these economic tensions, the financial implications go far beyond the technology sector alone. China’s restrictions on exports, from essential metals for semiconductor manufacturing to drone-related equipment, have economic reach that extends well beyond the industries themselves. same. By adopting such a restrictive approach, China seems to want to use its financial resources and production capacities as strategic levers.
China doubles investment in metals and mining
According to recent data relayed by the Financial Timesthe country is on track to set a record for foreign investment in metals and mining for 2023. In the first half of this year, such investment and new contracts have already exceeded 10 billion dollars, an amount that exceeds the annual total for 2022, and is on track to surpass the previous record of $17 billion set in 2018. This renewed interest is explained by China’s ambition to consolidate its dominant position in the production of electric vehicles, batteries, solar panels and wind turbines.
To ensure this primacy, Beijing is betting on projects involving nickel, lithium, copper, uranium, steel, and iron. The scale and diversity of these investments, spread across Africa, Asia and South America, highlight a strategy of economic autonomy, driven by President Xi Jinping, which aims to strengthen China in the face of escalating tensions. geopolitics with the United States.
Other sources of tension
Moreover, the introduction of China’s new counter-intelligence law adds an additional layer of complexity. For U.S. companies, regulatory uncertainty could dampen future investment in China, fearing unforeseen sanctions. Conversely, China could also be more selective about the foreign investments it allows on its territory.
In sum, financial movements have become one of the main barometers of Sino-US relations. If China continues to drift away from Western markets in terms of investment, it could signal the start of a new economic era, with profound implications for global geopolitics. The question remains: what will be the next steps and how will global players adapt to this new financial landscape?
2023-08-06 16:29:14
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