Ni Hao España celebrates the second day of his international tour in Madrid to build bridges between Spanish, Ibero-American and Chinese business people

"If China aligns itself with Russia, it could be leading public opinion to generate rejection of the Chinese market"

photo_camera china

Russia's invasion of Ukraine has shaken up the geopolitical chessboard. The multipolar world seems to be on its last legs, curiously provoked by reminiscences of the Cold War, before mutating towards a scenario marked once again by bipolarity, where the United States will presumably maintain its hegemonic position, but this time with China balancing the scales. The position that Beijing adopts in the conflict will be crucial for understanding the world to come, although no decision will detract from the strategic weight of the Asian giant.

Ni Hao España, a national company with the vocation of building bridges between Spanish, Latin American and Chinese businessmen, is there to project the Chinese market in the world and to channel commercial relations with China. A booming company that held the second day of its international conference tour on Tuesday, sponsored by the Juan Pons Foundation in Madrid. The event, dedicated to business and internationalisation, served to delve deeper into the Chinese market and understand its business logic.

china-iberoamerica

The conference was attended by Margaret Chen, founder of Optimus Horizon and honorary president of China Club Spain, Dr. Ricardo J. Palomo, Professor of Financial Economics and Dean of the Faculty of Economics and Business Studies at CEU San Pablo University, and Isabel Cortés, Head of International Legal Affairs at PONS IP. The founder of Ni Hao España, Laura G. Escallada, moderated a colloquium that addressed issues such as the exponential growth of the Chinese economy, its strategic advantages, its commercial links with Spain and its legislation in relation to intellectual property.

China, strategic opportunities

"China is not a country, it is much more than that, it is a civilisation," Professor Palomo began his presentation, "and that means, among other things, having a large market". With 1,402 million inhabitants, China is the most populated state on the planet, ahead of India, a comparative advantage for all companies, both national and international, that operate in the country, as it gives them access to a market of enormous proportions and with a multitude of opportunities.

A market whose growth rates are virtually unheard of. "When we were young we were told about China as a developing country. When Microsoft was founded in 1975, poverty in China was widespread," said the Dean of the Faculty of Economics and Business Studies at CEU San Pablo University. In 2021, Beijing's economy grew by more than 8%, surpassing even its official targets. "This is a good sign of the way forward".

china-iberoamerica

Ricardo J. Palomo also pointed out that China has been "the world's factory". "And it still is, but it has taken a very important qualitative step forward. It has taken the step into the world of new technologies. It is at the forefront of quantum computing and artificial intelligence".

Margarita Chen was categorical in this respect: "China is now 10 times bigger than Silicon Valley". There is no doubt that Beijing holds technological supremacy, in the words of Professor Ricardo J. Palomo, a position of strength in a world that has "bravely" undertaken the digital transformation imposed by the COVID-19 crisis. For the Professor of Financial Economics, 2020 marked the beginning of this new era, and China has an advantage.

Two further derivatives enter into this equation: the consolidated importance of the Asia-Pacific region and the growing reliability of the yuan. "The world is polarising towards the East. The world is tending towards the East, and Europe is lagging far behind, self-absorbed in regularisation", said Professor Ricardo J. Palomo. The 'Pivot to Asia' doctrine, already on former President Obama's agenda, is trying to be implemented by the major powers. This is where interests are concentrated.

china-iberoamerica

"The dollar is the reference currency. The dollarisation of international trade plays in favour of the United States, but let us not forget that China is the largest holder of dollar reserves in the world," warned Ricardo J. Palomo. Although the Chinese currency has been gaining weight in the markets, as reflected in the recent negotiations between Riyadh and Beijing to fix oil contracts in yuan.

The ambitious new Silk Road project is just the icing on the cake. All of this is the result of long-term planning, because, as the Dean of the Faculty of Economics and Business Studies at the CEU San Pablo University remarked, for the Beijing regime "strategic planning is achievable". According to the professor's calculations, by 2049 China will have world primacy, coinciding with the centenary of the Revolution.

 China and Spain, a road to build

Margarita Chen highlighted Spain's position vis-à-vis China: "China is Spain's largest trading partner outside the European Union; Spain is the fifth largest among the EU-27. Trade relations can improve, but they are not bad". Although she acknowledged that Madrid has seen its positions in Latin America, where in the past it had been a leading player, shrink, something that China has taken into account.

 china-iberoamerica

"China has greater relations with the United Kingdom, France, Italy... Spain has to be practical and realistic, and recognise that China is a market that it can take advantage of", said the president of honour of China Club Spain. At present, "most of the investment comes from China here", Chen recalled. In addition, the founder of Optimus Horizon positively valued the Comprehensive Investment Agreement signed between Beijing and Brussels at the end of 2020. A significant step forward in their relations.

 Beijing's response

"China, if it is a smart country, knows that a large part of its market is the Western world. And Western public opinion is against Russia's invasion. Therefore, if China were to align itself with Russia, it could be leading this public opinion to generate rejection against the Chinese market", said Ricardo J. Palomo. Moreover, Washington's threat to Beijing, formalised by US President Joe Biden in a telematic conversation with his Chinese counterpart, could alter investment possibilities in the country in the short term.

It all depends on which side of the scales China falls on, if it decides to officially take one side. Although ostensibly leaning towards Moscow, Xi Jinping has not yet shown all his cards. If he supports Vladimir Putin's aggression with military backing, the White House would launch a package of tough sanctions, and Brussels could follow suit. In any case, it would not be a simple operation.

china-iberoamerica

"We have dependencies," said the professor of financial economics. "The factories are in China, as we have seen with the issue of face masks". For Professor Palomo, "one part is the wallet and another is the heart" in the issue of economic reprisals against the Asian giant. It is proving difficult to find a solid energy alternative to Europe's deep dependence on Russian gas, and it would be even more difficult if the West were forced to disconnect from the Chinese market, which is currently the world's largest exporter.

The last part of the event materialised the issues addressed at the round table in relation to the internationalisation of Spanish and Latin American companies in China. Ni Hao España, together with Arcos Ibéricos, Arbonaida and Spirit of The Bull, three powerful Spanish companies in the food sector, offered a tasting of their products to the attendees in a space where music was mixed with flavour to give the companies an opportunity to take the first step in their international projection.

More in Society