During the Communist party Congress last month, President Xi Jinping unambiguously broke away from the decades-old mantra of China’s prudent rise. The goal now is to place the country firmly on the global centre stage by 2050, powered by massive Chinese investment in both industrialised and developing economies.
On the face of it, this is good for everyone, including Europe. But, given the scale and nature of Chinese investment, what looks like good business could in fact bring our open market system to breaking point. Europe is centre stage in this drama: both as the holder of the global trade system (given the current US protectionist retrenchment on trade) and as a growing target of Beijing’s investment might.
Initially, Chinese investment was much needed. The financial crisis left Europe with an estimated €330bn-investment gap. Spotting an opportunity, China has boosted its investments across Europe by 1,500 per cent since 2010. As a life-long advocate of free trade, I would usually welcome this as good for the European economy.