Economic Prostitution

There has been quite some fuss over the recent visit of the Chinese President Xi Jinping receiving a state welcome from the Queen et al. In fact, you would have been forgiven for thinking there was a royal wedding given the pomp, ceremony and banquets.

 

There has been much questioning on why this President should receive such a welcome at vast cost given China’s human rights track record, stance on Tibet and their nuclear policy. Clearly these issues ruffle plenty of feathers.

 

I wrote as recently as the start of September (Who’s Buying: http://stevesmithlive.blogspot.co.uk/2015/09/whos-buying.html) that to understand our royal and political flirting, it was necessary to consider the economic love making between the UK and the various partners on offer throughout the world. And with China to overtake the US as the largest (and most powerful) economy in the world over the next decade, you start to understand why the controversial President Xi Jinping received the grandest of welcomes.

 

Here’s a few numbers that start to paint the picture further:

 

- China has more money in the bank than any other country in the world.

 

 

- 3 of the world's 10 biggest sovereign wealth funds are Chinese, with collective wealth of $1.5 trillion in assets.

 

 

- China’s overseas investments have grown from $20 billion in 2005 to $171 billion in 2014.

 

 

- China has invested nearly $30 billion in the UK since 2005.

 

 

- China is a significant investor in UK companies.

 

So is it any wonder that the Queen and Prime Minister put the UK’s morals to one side to go after Chinese treasure? You need only see the £18 billion that China has agreed to invest during this visit in the Hinkley Point Power Station to realise why the best red carpet was rolled out.

 

Economic prostitution at its best!