The world has just learned with astonishment from a simple press release by the International Monetary.
Fund on October 10 that China has become the largest economy in the world.
According to the International Monetary Fund the Chinese economy is worth 17.610 trillion dollars, as opposed to 17.200 trillion dollars for the United States.
According to the International Monetary Fund, the Chinese economy will be worth 27 trillion dollars in 2019, which will be 20% more than the United States’ 22.3 trillion dollars by that same date.
This creates a new economic, diplomatic, financial, political, business and legal, but also social and sociological situation.
Clearly, allies belonging to one country will turn to new alliances, certainly not exclusive of the former alliances. However surely more numerous, more complex, more flexible.
Here, we will conduct a series of reflections on China, who has become the largest economy in the world and the chain of consequences that may arise from it. We will see how it might be possible to think about some ideas and try to predict the potential turnout of consequences.
The main topic that governs international relations today is undoubtedly Finance. Whether we like it or not, this is the area that affects trade between countries, states, corporations and human beings. Even more than the economy, the financial world both directly and indirectly influences our lives.
After a financial world dominated in the nineteenth century by London, and to a lesser extent by Paris (in the twentieth century for sugar and food), the twentieth century was that of New York and Wall Street with New York Stock Exchange and NASDAQ, and in the field of commodities and futures and options, the Chicago Mercantile Exchange, the famous CME.
This first decade of the twenty-first century has seen the exponential growth of Asian financial centers, like Singapore, Tokyo, Seoul, but also and especially Hong Kong and Shanghai.
Meanwhile, the Bombay Stock Exchange in Mumbai, the BSE, the Mexican Stock Exchange and BOVESPA Sao Paolo were also developed to become major financial centers. As for Frankfurt, propelled forward by the creation of the euro and the European Central Bank, the ECB, its importance on trade of securities was strengthened by its power of decision and financial firepower created by the European Union and its part of a monetary union that is the Eurozone. So much so that the ECB is viewed in the United States as sometimes faster and more decisive than has been the Federal Reserve America, the Fed and the American Treasury during the crisis of subprime mortgages in 2007 and 2008, as well as the subsequent crises in international liquidity in 2008, 2009, 2010 and 2011 that shook the United States, Europe and to a lesser extent Asia (Ripple Effect).
The very powerful Securities and Exchange Commission of the U.S. is now openly challenged by its Chinese counterpart, the China Securities Regulatory Commission; this has already completely redistributed the balance of powers in the international financial law for the past 5 years.
This is what we see in the next article.