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Wednesday, May 26, 2021
Would China Be a Haven?
ANBOUND

A number of new labels have surfaced in today's society; namely anti-globalization, geopolitics, geo-capitalism, excess capital, unilateralism, proliferation of nationalism, information explosion, climate change, global emission reduction to name a few. These labels show. In fact, they imply a phenomenon which the Chinese President Xi Jinping has aptly described as "a major change never before seen in the century". These global changes are signifying that the world is undergoing a structural adjustment.

Currently, the world is defined through the changes, turbulence, and structural adjustments that are revolving around it. Therefore, it is necessary that every country learns to actively adapt to such changes. With China being a major emerging market, it too needs to learn how to get along with the rest of the world through a series of prudent and strategic actions.

ANBOUND has been monitoring the changes in global patterns in recent years, and has provided some forward-looking strategic judgments. It proposed that China is evolving from being the "world's factory" to "major Chinese market", and that the crux of the global trade war is the battle for market space. Previously, ANBOUND ascertained the dismissal of China's "strategic opportunity period" and the U.S.' National Defense Strategy in 2018 as a "long-term strategic competitor" strategy, and proposed that both countries have entered into a "strategic coopetition period". ANBOUND has also been observing the dynamics between the U.S.-China trade war and proposed a new "1+3" world pattern. Additionally, it proposed conducting further researches on geopolitical interference factors on the economy and the evolution of "geo-capitalism". In a nutshell, ANBOUND hopes to understand the drive behind world fluctuations beneath global structural adjustment, which would allow it to predict the future trends and risks associated with world development ahead of its time.

In recent years, China has been facing assaults from multiple sides, from trade to science and technology, finance, and geopolitics. China has had previously served the role of the "world's factory", producing a large portion of most countries' consumer and manufactured goods. Today, China's production capacity still exists and continues to expand thanks to its technological advancement. Yet, countries in the world are also looking to expand their production capacity too. This led to the birth of multiple "world's factories", causing the entire world enter into a state of serious overproduction. As pointed out by ANBOUND founder Chan Kung in his book The Crisis Triangle, such a world is a dangerous world where either larger and new market space would emerge, or war or severe economic crisis would occur. Under such context, the space for China's production capacity will inevitably be suppressed by all parties. Unless China learns to transition smoothly and rapidly, it will face more difficulties in its economic growth and constrained geopolitical space.

The current situation in both the world and China has confirmed ANBOUND's analysis and judgment two years prior. The question that begs to be answered now is, how should China establish its newfound position following the dismissal of the windows of opportunities (such as the "1+3" pattern)? Chan Kung proposed that in a turbulent world, China should shape the image and status of a "haven". The reason to that is simple. When the world is in a period of structural adjustment, both China and foreign countries are eager for a "haven", i.e., a stable society and huge consumer market space, and if China can safely cement itself as such with sufficient capacity, the world will naturally flock over to the country, allowing it to regain its global position.

If that is the case, then what should China do to brand itself as a "haven"? For China, this could include preserving the stability of economic growth, political and social environment, market space growth, financial market, pandemic prevention and control, reform and opening-up, market openness, public services, rule of law, marketization, and business environment. The premise of a haven is to strive for steady development in the above-mentioned aspects. This is especially true when the global economy is undergoing a period of adjustment. Under the impact of the COVID-19 pandemic, achieving steady development in itself is a strong international competition.

As an influential country, China needs to not only maintain its strategic determination, but also establish a clear strategy of its own. In fact, Chan Kung firmly believes China's future policy should maintain its strategic determination.

Final analysis conclusion:

Faced with great changes from the world, China needs to actively learn to adapt and adjust to complete the transformation of multiple fields. By tapping into its market space and the country's pandemic control success stories, China can cement itself as a haven in global geopolitics and geo-economics. The most effective way for China to do that is by maintaining stability and planning for the long-term.

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