Thread by @nrgomes

A thread about how well #China is playing the international game to become the most prominent economy in this decade, by @swardley.

https://twitter.com/swardley/status/1215978326986235904

@swardley Some key points about #China's long-run #strategy:

- For the #CPC (Communist Party of China) the #market is only a tool to leverage the power of the Chinese people, culture, and state, and not the holy sacred truth, as most western liberals believe. See @swardley's explanation.

@swardley - #China, through its CPC, acts as the #world's #biggest #buyer of goods & services, and hence, is able to impose its conditions (read law, prices, access to intellectual property, etc) to all multinationals that want to access the Chinese market, no matter how big they are.

@swardley - Because the #Internet has the potential to disrupt entire industries & societies (as we saw during the last 2 decades), the #ChineseFirewall is by design, and since the beginning of the Internet, also a tool for the state to control its citizens and protect its internal market.

@swardley - The #GreatFirewallOfChina (#GFW) is also helping #China grow its political, cultural and economic influence around the world, in countries with authoritarian regimes (#Russia, #Cuba, #Vietnam) and even exporting its state #surveillance #technology.

abc.net.au/news/2019-05-2…

@swardley - By strongly protecting its massive internal market, #China uses the #market as a tool to fast develop through competition the technologies the #CPC elected as top priorities (e.g.: #AI, #eCommerce, #SocialNetworks, #Communications, #RenewableEnergy, #ElectricCars, #Genetics).

@swardley - By using the #market as a tool, later the #Chinese #companies that win the internal competition are ready to become worldwide players able to compete with the #Western companies on an equal foot.

See this #WardleyMap for a better explanation:

https://twitter.com/swardley/status/1215991376250392581

@swardley - On the other hand, the #Chinese state does not relinquish control of its #strategic #assets (energy, oil, banking, insurance, construction, automotive, etc).

This implies that almost all the largest Chinese companies are state-owned and will remain so:

en.wikipedia.org/wiki/List_of_l…

@swardley - And the #Top10 largest #Chinese companies (almost all state-owned) are already in the #Top50 of the #Word's largest companies by #revenue:

en.wikipedia.org/wiki/List_of_l…

@swardley - To reinforce its political & economic influence across Asia, Europe, Africa, Middle East, and Americas, gain access to new markets & resources, #China, through its infrastructure state-owned companies, launched in 2013 the Belt & Road Initiative (#BRI):

en.wikipedia.org/wiki/Belt_and_…

@swardley - The #BRI strategy pursued by #China is, as of today, impossible to copy by the Western countries (#EU + #USA) because:

- we don't have big state-owned companies.

- we don't view state-owned companies as a tool for economic & strategy development, due to our liberal beliefs.

@swardley - With already 152 countries and international organizations onboard of its #BRI, #China is positioning itself to displace the #USA and #EU as the main economic engine in this decade.

A way to validate this is to look into long term GDP (PPP) estimates:

en.wikipedia.org/wiki/List_of_c…

@swardley Or use the long term GDP (nominal) estimates... same conclusion:

en.wikipedia.org/wiki/List_of_c…

@swardley - With its state-owned banks financing the #BRI mega-#infrastructure projects across the world, #China will replace in this decade the $USD as the main international currency for trading with its own currency, the $CNY / $RMB, by investing primarily in $USD...

@swardley ... (which #China has huge amounts of reserves) and signing infrastructure loans and trade agreements in $CNY, thus reducing its dependency on the $USD, and making the $CNY the world's most valuable trading currency in just 10 years (2030).

beltandroad.news/2019/11/21/inv…

@swardley - Also in the realm of currencies, another #strategic #move from #China is being done today by its private-owned #fintech companies (#Alibaba, #Tencent, #JD, #Xiaomi, and #DiDi) across all #Asia, paving up the road for...

fintechnews.hk/8688/infograph…

@swardley ... the introduction of a tokenized #blockchain-based $CNY across all #Asia, fully backed and centrally issued by the People's Bank of China, but without the #anonymity and #PoW / #PoS of #bitcoin and other #cryptos. This will happen soon, maybe in 2020.

bloomberg.com/opinion/articl…

@swardley That's all for today.

Major learnings from #China's #strategy:

- The open market is only a tool to develop big and global-ready private-owned companies compliant with Chinese law.
- State-owned companies are only a tool to expand China's influence overseas (through the #BRI).

@swardley - Supporting other countries' development (through the #BRI) is a way to acquire new markets for Chinese businesses, access natural resources, expand China's influence, strengthen the $CNY globally, and overthrown the #USA and the $USD.

@swardley - Private-owned #Chinese #tech companies work closely with the #Chinese government and Central Bank to expand markets and revenues.

Now... what #strategic moves can Western (#USA, #EU, #Canada, #UK, #Australia) and Eastern (#Japan, #Korea, #India) democracies play to counteract #China's strategy game to become the most powerful nation on Earth in this decade?

This is an open question.

Feel free to reply.

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