When we talk about the country of China many people have a lot of misconceptions especially when it comes to talking about their industry and the relationship, they have with other countries on the economic playing field. Over the past few years, we have seen China open its markets to foreign entities more and more as it seeks to increase its profit. Many people are skeptical of the reasons why China would suddenly take this massive leap into the worldwide economy even though many people seem to ignore the fact that China has been a massive player in a worldwide economy for as long as it has existed. So, let’s take a look at the current state of China and why it is looking to create more partnerships with foreign entities.

The supply chain

China made a name for itself currently in the worldwide discussions around the economy as it has had a very incredible year when it comes to the production of semiconductors. While China is not exactly isolationist the reality is that many Western countries have been putting sanctions as well as tariffs making it very difficult for China to be able to rely on the trustworthy supply chain coming from the West. This is why it’s no surprise that China is taking the opportunity to open trading routes towards the Middle East as well as Africa and the southern part of America to get the necessary raw materials like cobalt to make their production of semiconductors possible. This becomes even more apparent when you see that China is doing trade with a lot of these countries in a way that favors these countries in exchange for access to these resources.

Building a network

Many people have accused China of investing a lot in infrastructure in other countries to assure loyalty towards them but the reality is that China has been putting money and specialized workers in other countries to allow for the growth of their markets so they can both thrive together. In a way, China has been building in network by allowing many other countries to have a thriving economy that is not hyper reliance on others. One such example can be discussed when we talk about their potential deal with Afghanistan in exchange for access to their minerals. The reality is that of course China will benefit from all of these deals but the countries on the other side will also benefit greatly and will feel indebted to China on this specific issue.

Sanctions

While the West has not completely stopped its trade with China the reality is that following the increasingly violent conflict in Ukraine caused by Russia has also pushed many Western powers to sanction both Russia as well as China. This, of course, causes a lot of issues for China because Russia is one of their main trade partners hence the need to find new trade partners. Following the numerous sanctions applied by countries like the United States it’s no wonder that China has been looking towards the global South as a potential economic ally to bolster their growing industry as well as their growing economy. Since many of those countries are also under sanctions by America it is no wonder that many of them are looking forward to making deals with China. This means that if you go to Latin America, you shouldn’t be surprised to see power tools like drills and drivers, as well as electric cars with Chinese branding. Even in Europe, you will see a lot of Chinese electric cars on the streets.

As you can imagine as China continues to threaten the American economic hegemony, we will see more and more alliances be built between China and many other countries that find themselves at odds with America and its allies. While this may seem like a dark time ahead for many business owners their reality is that this will create a more competitive market, especially for consumers. At the end of the day while China’s shadow might be looming currently America is very much still the hegemonic power both economically as well as politically worldwide. Only time will tell what this means for consumers and the future of our economy.