SHANGHAI — At a time when the U.S. and other traditional economic powers are weakening, China is flexing its muscles, signaling it will seek a much more assertive role in shaping the future of the world financial order.
The apparent shift in Beijing's approach is likely to be displayed at the Group of 20 nations' summit today in London, as China presses for changes in a global finance system long dominated by the U.S. and Western Europe.
Leading up to the gathering of the heads of 20 major developed and emerging economies, Chinese leaders have publicly criticized America's economic system, raised concerns about the safety of China's massive holdings of U.S. debt and, most recently, proposed the creation of a new international currency to replace the dollar.
At the same time, China is snapping up foreign oil fields and mines, ensuring that its raw materials cupboard will be well-stocked when the economy rebounds. This year China has signed deals with Iran, Russia and Venezuela for oil and gas deals worth tens of billions of dollars, and has made moves for stakes or outright purchases of at least seven mining companies.
Chinese companies are also looking to buy high-profile Western brands on the cheap, while recruiting foreign talent to upgrade China's technology. China's Geely Automobile Holdings Ltd. has reportedly talked with Ford Motor Co. about purchasing its distressed Volvo unit. And analysts on both sides of the Pacific have floated the prospect of a Chinese automaker acquiring General Motors Corp.'s venerable Buick line, if not the entire company, something once considered unthinkable.
China sees the global downturn as a once-in-a-century opportunity -- and it has the wherewithal to seize the moment. Although Chinese leaders too are struggling with shrinking trade and rising joblessness, their economy is still growing faster than those of other major nations. Chinese banks are more stable. And the Beijing government is sitting on the largest stockpile of foreign reserves in the world, some $2 trillion.
"They have fairly clear objectives of where they see their place in the new world order," said Oded Shenkar, a management professor at Ohio State University and author of "The Chinese Century." "They see it's time to position themselves more assertively."
