Article written by Roberta Carbone
Is the Davos 2007 summit still actual?
In January 2007 a summit of the world’s capitalist powers took place in Davos. According to the capitalism leaders in the next thirty years the centre of the world’s economy will move from US and EU to China. Unfortunately from January 2007 to today the world’s economic balance has consistently changed in consequence of the world economic crisis of 2008. In the middle, there was another Davos summit in the last quarter of 2008, but this time the expectations were not as positive (for China) as they were the previous year. Since June 2008 we have been living in economic crisis conditions and the situation has even worsened now. In this state of things it is perhaps difficult to say if the expectations of 2007 about China are still valuable or not.
The 2008 world economic crisis
As a matter of fact the 2008 financial crisis began in the second quarter of the year with the bankruptcy of Lehman Brothers, the great American investment bank. The fact that in January 2008 the rating agencies gave the most positive quote to the bank which a few months later would have given rise to the most important capitalist crisis since 1929 is proof of the internal cancer’ of the deregulated capitalist system. Like in 1929, in 2008 the crisis started from the United States and spread only later to the European Union and to the rest of the world.
In this context China has proved to be effectively a potentially great capitalist power, because the world’s economic balance was in her hands: posessing a great part of the American Treasury bonds, China could have sold them, provoking a catastrophic depreciation of the dollar, with worldwide consequences.
Relations between West and East
The great western powers have evidently some problems recognizing the potential of the developing countries. They tend to underevaluate the economic growth of the eastern part of the world (i.e. China, India), because it represents a threat to their own economies. In the same way in the 2007 Davos summit they misunderstood some important signs coming from the conomic world, thus they assumed that by 2035 China would have become the world’s economic centre, not considering the other developing countries seriously. The result of the 2008 crisis showed, though, that China is already a great power, which can face, and even decide to save’, the US, while other developing countries, like India, register a continuous upward trend. Most probably it will be India the other great capitalist power by 2035.
Nowadays there is no doubt that the western countries are on a downturn, because they don’t have the means to face the crisis; the proof of it is that the United States are trying to solve a private debt crisis producing new national debt. China, on the other hand, is stable and, in the first quarter of 2009, its GDP has even grown.
Over the last year the process of moving the economic epicentre from US to China has received a strong impulse and the result is that China didn’t suffer much from the worldwide financial turmoil, thanks also to the strong political measures taken by the Chinese government. Moreover the Chinese economy bases itself mostly on manufacture, rather than on financial speculation, as it is in the US. All this notwithstanding the fact that EU and US continuously reject lots of Chinese goods, because they are counterfeit or because they are produced with toxic materials a clamorous example is the scandal of the Mattel toys in 2007 .
China is expected to be the future world’s greatest power. Or not?
From the period after World War II the world shifted first to a bipolar period, in which the two great powers were USA and URSS, than to a post-bipolar age, which is the present age. The latter is characterized by the American supremacy with the new uprising of Europe, thanks to the creation of the European Union. In my opinion we are now shifting to a third period, the multipolar age. In this kind of world there won’t be the supremacy of a single country anymore, rather there will be many different economic centres; some examples could be China, India, Russia, EU, Brasil and, again, but less powerful, USA.
Perhaps this new balance of powers will lead to a new and more fair model of capitalism.