Zhonghong Network published a signed article, Ma Xia: Opening up a new era of economic globalization with win-win cooperation

Source: Zhonghong Network

Thinking about the Sino-US strategic game and the transformation of strategic position, we must first answer the simplest question: What does US hegemony rely on? Rely on "carrots" plus "sticks". Militarily aside, the United States also relies on "carrots" and "sticks" to maintain its economic hegemony. Today, the hollowing out of industry in the United States imports consumer goods, exports raw materials and energy, and the economic structure of emerging energy and raw material countries is no longer complementary but competitive. High-tech companies, while high-tech, are highly innovative but rely on Asian capacity to convert into economic value, and the U.S. economy has been overwhelmed by its huge foreign debt. In short, today's United States has lost the temptation of "carrots", and "carrots" and "sticks" have always been tied together, and without "carrots", the power of "sticks" has been greatly weakened. The United States can't always use aircraft carriers to force people to buy US debt, right?!

　　The major changes that have not occurred in a hundred years are, first of all, the transformation of the economic globalization model, that is, the transformation from the financial hegemony model dominated by the United States and the West to the economic globalization model of fair, healthy and sustainable development, which of course means the reshaping of global leadership. There is no doubt that China, which has great potential for highly industrialized and globalized economy, is a key force leading the new type of economic globalization. The community of shared future for mankind proposed by Chinese leaders sets the tone for a future model of globalization. The new economic globalization will abandon the hegemony of the United States and the West and move toward a new order that is fair, reasonable, healthy and sustainable.

　　The difference between the new order and the old hegemony is that reshaping the new leadership means having enough "carrots" in hand to use "win-win strategies" to lead the "zero-sum competition" of globalization towards a community with a shared future for mankind. The following is a brief review of what key resources we have to promote the construction of a new order of economic globalization.

　　The industrial system of the whole industrial chain is the first necessary condition for a win-win future between China and the world. Only with an industrialization system with the whole industrial chain can we have the ability to achieve economic complementarity with emerging countries and achieve win-win results. China is the largest trading partner of more than 120 countries, which is the basis for achieving a win-win situation. Specific paths: First, through the purchase of primary products such as energy, minerals, and agricultural products in emerging countries, help emerging countries achieve economic growth and trade rebalancing; second, help emerging countries invest in infrastructure such as electricity, water conservancy, railways, highways, airports, wharves, and minerals; third, transport some low-end industrial chains to emerging countries to enhance their industrialization level.

　　China's perfect overtaking in the field of new energy power and new energy vehicles has the foundation to lead the fourth industrial revolution. Reinventing global leadership and taking ownership of the core position cannot be separated from the industrial revolution. The United States and the West led the first three industrial technology revolutions, and China already has the conditions to lead the fourth industrial revolution. The production capacity of new energy power and new energy vehicles has been controlled by China, and we also have an absolute leading position in the application of Internet technology. In the next step, we need to integrate and upgrade our own industrial chain and form an industrial chain cluster so that our new economy is not only large, but also strong.

　　The $3 trillion in foreign exchange reserves is the hard power of the offshore renminbi to replace the dollar hegemony. The dollar became the global settlement and reserve currency, which was gradually established through credit delivery. Leading the establishment of the four major functions of offshore currency settlement, credit, savings and hedging is the credit function. The following is a simple calculation of why with $3 trillion in foreign exchange reserves, you can replace the offshore currency function of the dollar with offshore yuan.

　　Divide the $3 trillion in foreign exchange reserves into three parts: one to help replace the dollar bonds in the hands of the governments of emerging countries; one for the "Belt and Road" export credits; and one to invest in the infrastructure construction of the "Belt and Road".

　　$1 trillion supports export credits, even without leverage, which can at least pull 10 trillion yuan of independent export credits. In 2021, the mainland's total exports will be nearly 21.73 trillion yuan, and with an increase in export credit of 10 trillion offshore yuan, it will vigorously stimulate onshore economic growth, promote the integration of the credit chain of the industrial chain, and greatly reduce the loss of bad debts of US debt, while supporting the offshore renminbi to become the reserve currency for international settlement.

　　According to the International Settlement Center, the external debt of emerging governments totals US$752 billion (including non-US dollar-denominated external debt). The so-called dollar hegemony is that Wall Street controls the finances of emerging countries through dollar debt. This number is not large, and we can lead the "Belt and Road" countries out of the dollar trap on our own. The author has an in-depth analysis of this in the book "The World's Currency - The Breakthrough and End of the Dollar Hegemony".

　　The $1 trillion support for the "Belt and Road" construction of power, water conservancy, railway, highway, shipping, wharf, warehousing and other infrastructure construction is much more affordable and safe than buying US bonds, and can also bring stable returns on offshore assets, and make the economies of the "Belt and Road" countries further coordinate with China and move towards high-quality development.

　　In short, the author believes that China is fully capable of leading the world to get rid of the hegemony of the United States and the West, establish a new model of fair, reasonable and sustainable economic globalization, and ultimately lead the world to a community with a shared future for mankind.

　　[Author: Ma Xia, Economist, Author of "The World's Currency - The Breakthrough and End of dollar hegemony"]

Editor: Wang Jingrong

Review: Wang Yiran