Year of the Monkey in China and its economic key terms
China and its wine consumption were the focus of our last post. In this new article we will continue with the Asian giant but focusing on its economic key terms.
Last February 8th China welcomed the new Lunar year, 4717, which according to the Chinese Yearbook corresponds to the Monkey horoscope. As many analyses confirm, this New Year will be key for the second world’s biggest economy and therefore for the entire world. A new era will begin with more tourism, culture, and much more commerce. Below you will find how Monkey’s year will be in economic terms.
All the plans they want to implement are followed up by a major symbolic significance, since China is assuming its role as the world’s second-largest economy
1. The new silk road
2016 will be the year in which many business operations will take place abroad with the aim of rebuilding what is well known as The New Silk Road.
The Silk Road Economic Belt is the land-based half of China’s One Belt One Road (OBOR) initiative that will facilitate the creation of a colossal network of new highways, rail lines, logistics and industrial zones, pipelines, power plants, sea ports, administrative centres and new cities that will spread from East Asia to Western Europe, reaching 60 countries and over half of the world’s GDP.
2. Selling China as a culture
China plans to boost the massive outflow of its businesses in new countries paying, if needed, primes to acquire the “know how” in order to be well positioned regarding industries they consider strategically important.
At the same time, the Asian giant bets for cultural topics such cinema or even sports, as the country doesn’t only care about business but also about gaining influence: they want to sell China as a culture.
3. Yuan’s devaluation
Another key figure of the Chinese economy and again of the worldwide economy will be Yuan’s devaluation. Although it is expected a 15-20% decrease with respect other major currencies, we still don’t know whether it will be sudden or gradual.
What it is a certainty is that, this effective devaluation, is shown both by capital markets behaviours and a convergence between the onshore and offshore interest rate.
Summing up all the previous circumstances, it could clearly be a great opportunity for European markets to invest in Chine, which will help to boost the internal development and thus to reactivate its economy.
4. Towards regular growth
So far, one of the main issues for China has been its economic growth, which has been unstable, unbalanced and uncoordinated.
Therefore, it is essential to implement successfully the reform agenda set in 2013, which aims to fix these issues. Last October, Chinese President Xi Jinping forecasted a GDP growth target of 6.5%. Furthermore, it is also expected that Chinese growth tends to restore.
Finally, as a conclusion, we could say that culture and commerce are the main focus for the upcoming Monkey’s year. But it is also important to highlight that these issues are above the economic understanding, all the plans they want to implement are followed up by a major symbolic significance, since China is assuming its role as the world’s second-largest economy.