Will 2018 be the year of China?
We began to talk about China around 40 years ago as a very cheap production hub. Many goods that people around the world used were being produced in China. A few decades later China began to invest in people and started to fund global brands. And now today almost every day we hear more astonishing news about China.
Reuters reported just yesterday that China is set to overtake Japan as the world’s biggest natural gas importer. China - already the biggest importer of oil and coal - is the world’s third biggest user of natural gas behind the United States and Russia, but has to import around 40 percent of its total needs as domestic production cannot keep up with demand. This high demand for natural gas will deeply change global energy markets.
It was also reported by Reuters yesterday, citing local news agency Xinhua, that the Chinese government is building a $2 billion artificial intelligence (AI) research park as it looks to become a world leader in the field by 2025. The AI research park — to be located in west Beijing — will reportedly be able to accommodate 400 companies that are expected to generate 50 billion yuan each year.
According to the World Economic Forum, in the lead up to the 2015 Paris climate summit Chinese President Xi Jinping announced that his country would launch a carbon market in two years. Xi has since delivered on his promise, opening up what will become the world’s largest carbon market. If wielded wisely, it could help the world’s biggest emitter of greenhouse gases hit the goals set under the Paris accord and avoid catastrophic climate change.
Another news report from last week revealed that Facebook is no longer the world’s most valuable social network. That is because Chinese technology giant Tencent, its share price bolstered by stronger-than-expected quarterly results, became the first Asian firm to join the club of publicly traded companies worth more than $500 billion. In the process it ousted Facebook from the global top five companies by market value.
China is trying to diversify its portfolio by investing in foreign markets. U.S. firms are China’s main targets but there is an opposition that has emerged to Chinese takeovers. On Jan. 3 a U.S. government panel rejected Ant Financial’s acquisition of money transfer company MoneyGram International over national security concerns, in the most high-profile Chinese deal to be torpedoed under the Trump administration. The $1.2 billion deal’s collapse represents a blow for Jack Ma, the executive chairman of Chinese internet conglomerate Alibaba Group Holding, who owns Ant Financial together with Alibaba executives. He was looking to expand Ant Financial’s footprint amid fierce domestic competition from Chinese rival Tencent Holdings’ WeChat payment platform.
China is also investing in space: Its Chang’e-4 lunar probe is scheduled to land on the far side of the Moon sometime before the end of 2018, carrying 11 scientific payloads, including four developed by other countries.
So while we continue to struggle with various fundamental political issues in the Middle East, while the U.S. is busy trying to find a new role for itself, and while Europe is trying to figure out what to do with its aging population while also trying to keep the EU together, China is progressing very, very fast.
We will hear more stories about China in 2018. In a couple of years I do not doubt that Chinese companies will put Silicon Valley companies to shame.