The epic process of China “going global” has been underway for over a decade, but the events of late July 2007 may well be its defining moment. The stake in Barclays bank purchased by the China Development Bank – one of Beijing’s state-owned “policy banks” – is significant in itself, but it also represents a high-profile reversal of the dominant perception of China’s international economic role.
Since China’s entry to the World Trade Organisation in 2001, foreign investors have salivated at the prospect of buying into a market with one of the highest savings-rates on the planet ($1.7 trillion sits in Chinese personal savings accounts). The Royal Bank of Scotland and the Bank of America (to name only two) have taken stakes worth billions of dollars in Chinese banks. But even a few months ago, the thought that China’s own banking institutions might themselves undertake such bold action wasn’t envisaged. [Full text]
Kerry Brown is an associate fellow of Chatham House, and director of Strategic China Ltd.