And Now China…

And Now China…

“If opportunity doesn't knock, build a door.”

Milton Berle

By Erreh Svaia

Growing at an amazing 12% communist China and its capitalist experiment gave the world a big spin in recent years, transforming this bigger than life country into the second world economy very close to the U.S. first place and way ahead of India, forget about the so called BRICS, because neither Russia, nor Brazil or South Africa lived up to its reputation, as the big fall in oil prices ended up many of their expectation to become a major actor in world economy, it might be or not a casualty that these three countries organized or will organize either Football World Cups or Olympics in order to announce their status, but in the case of Brazil, it only served to expose their deficiencies, Russia corruption and who knows what will happen with China?

If the Greece situation gave the world a cold, China economy slowing down might be something close to pneumonia, as the Asian giant reported recently a growth of mere 7%, still a big number, but almost half of the percentage reported in previous years, the thing with China is that it is still an authoritarian state in process of opening, and that means that perhaps that 7% might not be too accurate, and that the Chinese Communist Party might be hiding a bigger decline on growth, a sign that the world might be entering a new crisis, as the experts think, the real growth of this country is a mere 4%, which in world standards is still respectable, but just a third part of what China was growing in past years, which is something to worry a lot, as it has sank the hopes of countries like Brazil and Argentina.

In past years China's amazing growth rates were taken as great news by countries in Latin-America, as Venezuela, Brazil and Argentina's commodities market benefited from China insatiable appetite for them, but now, a combination of economic contraction, low oil prices and dollar value appreciation is putting the Larin American countries in really big troubles, lowering even more the hopes for economic growth in this region, add that to no growth in Japan and in the European Union, leaving the U.S. as the only motor for the world economic growth and you have a big trouble coming ahead, economy might move, but at a really slow pace.

I have no doubt that China will overcome their economic difficulties in a really quick fashion, as their authoritarian regime gives them a speed that democratic systems as the E.U. lack, as decisions are not delayed by voting (the negative thing is that Chinese authorities might not know really what started their amazing growth after all), but the world economies should start to adjust their markets to lower growth expectatives, and to start a process of diversification of risks, as oil and commodities markets will be too volatile in years to come, those countries who structured their economies in order to make use of the astonishing growth of China might be having a really bad time nowadays.

For Latin America the future should be seen in terms of education, technology and innovation, in welcoming foreign universities that can help us take the big step forward in education, more private investing and less government involvement, and sending more and more students to study outside the country in order to have a more high skilled working class in order to start designing and developing new products aimed to the requirements of world markets, just as countries like Singapore, Vietnam, Israel and India have done, technology is the way to grow in a sustained way without the risk of volatile prices, it´s time for countries to start leading the creation of markets and making their own way instead of being at expense of other countries performance.

The world must be ready to take advantage of this coming crisis, as it might be look as opportunities and not as a catastrophe, innovation is the way, and those who embrace it might be able to survive this enormous storm coming.

As the saying goes: “Don’t put all the eggs on one single basket.”