China fights for cheapness

At the APEC summit in Beijing, China will offer a new concept of delivery of its goods to foreign consumers

In Beijing, on November 8-9, the Summit of Organization of Asia-Pacific Economic Cooperation (APEC) is held. The scandals associated with the preparation of such a summit in Vladivostok two years ago are still fresh in memory. For the Beijing Summit, large -scale construction was not required.

A week before the start of the forum, however, the authorities had to close some enterprises, ban the entrance to the city of cars and take many other measures to at least slightly clean the air in the city, notorious all over the world because of the Solu constantly covering it , which, although it is ongoing, so far unsuccessfully. If we talk about the content of the summit, then from China it is worth waiting for a number of serious initiatives, says Alexei Maslov, head of the Center for Oriental Studies of the Higher School of Economics in Moscow:

- China’s infrastructure is already entirely ready. There is no need to rebuild anything again - it is about the organization in existing areas. More recently, China held such major events as the 2008 Olympics, then Shanghai-Expo in 2010. China is preparing more in political and economic terms. For China, the APEC summit is an opportunity to declare its new ambitions. China is going to lay a variety of roads - both roads and railway, to adjust air transportation so that goods from China with significantly lower costs fall into Europe.

China offers several concepts that are combined into an initiative entitled "Economic Belt of the Great Silk Road"

Now in China there is an increase in prices for almost all types of products. Moreover, this is an objective process - labor is getting more expensive, salaries increase, social deductions increase. As a result, Chinese goods become less competitive. Plus, new competitors appear not only in the countries of Southeast Asia, for example, in Malaysia, Indonesia. Latin America countries come out with noticeable new offers. Brazil, Argentina is activated, begins large production of Mexico, which is ready to supply goods in the United States at prices competitive with China. China must sharply lower the cost of production of goods. This is not so simple. Therefore, one of the ways to lower the cost is a decrease in the cost of delivery of goods to the final consumer. As a matter of fact, for this, China offers several concepts that are combined into an initiative entitled "Economic Belt of the Great Silk Road." There are no exact parameters of this offer today. Obviously, we are talking about large -scale infrastructure projects, which should be held, on the one hand, on the sea around India and further. And on the other hand, this is a land "economic belt of the Great Silk Road", which will most likely pass the countries of Central Asia, through Russia and to Europe. And in this regard, China receives a rather serious profit in terms of reduced production.

In addition, China makes a huge initiative (in fact, this is part of the concept of the Great Silk Road) on the creation of a single free trade zone in the APEC countries. On the one hand, for China, this is certainly a very profitable offer, since the PRC will be able to supply their goods to Europe at noticeably lower prices.

For many economies, of course, there is a tactical win, since for the end consumer many products will be cheaper. On the other hand, the free trade zone is somehow based on a decrease, or even the complete abolition of both export and import duties. This money will not enter the budgets. This is the first thing many countries will think about. And I do not think that with some particular joy, many will perceive this proposal.

As for Russia, it fights for import substitution, that is, the development of its own industry, its own industry, its own agriculture. But the supply of cheap and high -quality goods from China most likely again torpedo the initiatives of many Russian entrepreneurs about the production of their goods. And this causes a number of fears.

China is very persistent in its offers

China is very persistent in its proposals. And as far as one can understand, many countries of Central Asia have already supported his proposal or are ready to support. For Russia, this is a more serious question. Because you have to think how profitable it is. But, given that today Russia and China are not just strategic partners in the traditional sense, but partners in developing the concept of a new world order, then I think Russia will have to make some concessions so as not to lose such a serious partner as China.

Of course, this position of China on the development of the new concept of the Great Silk Road seriously comes on the interests of the United States - the largest trading partner of the PRC with more than $ 500 billion. But China is full of determination, because if its initiatives are supported by most countries, for example, in Central Asia and, possibly, Russia, then, of course, the United States will not be able to make anything against China's proposals. And while the United States will not be able to reduce the cost of the production of its goods on its territory or in the territory, for example, Canada or Mexico, China will always occupy a huge share precisely in the production of goods. For the production and delivery of goods to the consumer, China is fighting today, ”said Alexei Maslov, head of the Center for Oriental Studies of the Higher School of Economics in Moscow.

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  Andrey Sharogradsky

  International Radio Offer Freedom. Author and host of the information and analytical digest, podcast "Time of Freedom"