reforms in exchange for the cash.
The China Development Bank, the New
Development Bank (formed with BRICS
countries Brazil, Russia, India and South
Africa but dominated by China) and the
Asia Infrastructure Investment Bank
(which counts key U.S. allies like Britain
and Germany among its founding members)
all bolster this strategy. Together
with its “One Belt, One Road” initiative,
created to open new routes for commercial
exchange between China and Europe,
these institutions will help China join developed
countries as an internationally
recognized lender of first resort. That
will help China redefine the rules of international
direct investment in its favor.
China also has a favorable geopolitical
environment over the short term. While
the country will one day face tougher political
and economic competition from
India, Prime Minister Narendra Modi’s
fast-expanding global influence pushes
it across an important threshold and becomes
impossible to ignore—before those
long-term problems finally take their toll.
The U.S. has been the world’s leading
economic power since 1872. But it’s a
question of when, not if, China will overtake
the U.S. to become the world’s largest
economy. When adjusted to account
for differing exchange rates, in a measure
called purchasing power parity, China’s
GDP became No. 1 last year. With the
U.S. still sluggish, Europe stuck in the
mud and many emerging markets struggling,
the global economy will depend on
China to propel it forward for at least the
next few years.
Even as its growth slows to a more
sustainable pace of around 7% this year,
China, a voracious consumer of oil, gas,
reforms in exchange for the cash.The China Development Bank, the NewDevelopment Bank (formed with BRICScountries Brazil, Russia, India and SouthAfrica but dominated by China) and theAsia Infrastructure Investment Bank(which counts key U.S. allies like Britainand Germany among its founding members)all bolster this strategy. Togetherwith its “One Belt, One Road” initiative,created to open new routes for commercialexchange between China and Europe,these institutions will help China join developedcountries as an internationallyrecognized lender of first resort. Thatwill help China redefine the rules of internationaldirect investment in its favor.China also has a favorable geopoliticalenvironment over the short term. Whilethe country will one day face tougher politicaland economic competition fromIndia, Prime Minister Narendra Modi’sfast-expanding global influence pushesit across an important threshold and becomesimpossible to ignore—before thoselong-term problems finally take their toll.The U.S. has been the world’s leadingeconomic power since 1872. But it’s aquestion of when, not if, China will overtakethe U.S. to become the world’s largesteconomy. When adjusted to accountfor differing exchange rates, in a measurecalled purchasing power parity, China’sGDP became No. 1 last year. With theU.S. still sluggish, Europe stuck in themud and many emerging markets struggling,the global economy will depend onChina to propel it forward for at least thenext few years.Even as its growth slows to a moresustainable pace of around 7% this year,China, a voracious consumer of oil, gas,
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