<div>Trade numbers for 2012 show that China has become the world’s biggest trader, unseating the United States that has ruled the global trading charts for several decades. It is a momentous shift that is bound to have far-reaching impact on the way Beijing sees itself and the manner it influences geopolitics.<br /><br />As it becomes the biggest trading partner of many developed countries, eclipsing their bilateral trade trends, a China flushed with cash, has the ability to increasingly push its agenda even in places where it has been seen as a security threat. After all, business means money and nobody wants to make any less if there is an opportunity to make more. That’s why countries with close commercial ties seldom go to war.<br /><br />The US Commerce Department said this month that America’s exports and imports of goods totalled $3.82 trillion in 2012. According to China government figures unveiled last month, that country’s total trade in goods stood at $3.87 trillion last year. China, however, seems to be a reluctant torchbearer of global mercantilism. It is now contesting the method of calculation and has said that the United States continues to be the world’s biggest trader and that a new World Trade Organisation report due out soon will say as much.<br /><br />But despite the reluctance on part of the world’s second-biggest economy to take over the mantle of the global trade leader, the fact remains that China’s economic influence has only increased in recent years. By 2011, China had overtaken the United States to become the biggest trading partner of 124 countries, according to a Chinese government report. That number was only 70 in 2006. The shift has mostly been at the cost of the United States and going ahead that is unlikely to change as a ravenous China – hungry for natural resources and technologies – will buy more and more to feed its factories and people.<br /><br />For an economy that is still only half the size that of the United States, China’s economic muscle flexing is not new. Flushed with huge foreign exchange reserves, Beijing has offered to help economies in trouble as its large companies – backed by state banks and the government — have gone around setting businesses across the world. There is a view that the Chinese economy would surpass the US by 2018 mainly because of an inward fuelling of demand by a large population. Beijing is also trying hard to shift from its export-led economic boom after a domestic slowdown thanks to a collapse of demand from its major Western buyers.<br /><br />As its trade with the world and the overall size of its economy expand, China’s ability to influence trading blocs and politics in its big trading partners will also increase. To some extent, the shifts are already visible. In Europe, in Africa, in Asia and in South America, there are signals that despite fears countries are more willing to work with China than before. <br /><br />So, while the United States can grumble and threaten to take steps to curb its growing deficit with China, it will always find it difficult to turn it into a full-blown and sustainable bilateral economic or diplomatic issue. The two countries have extremely deep economic ties and a trade of surplus of $219 billion in favour of China 2012 is only one sign of that intricate relationship.<br /><br />Despite a view in the United States that Chinese companies are up to little good in foreign markets in their quest for business, US regulators have approved China National Offshore Oil Corporation’s $15 billion takeover of Nexen Inc. – the largest overseas buy by a Chinese company. Given that the US Congress called in two Chinese telecom companies for a hearing on charges of alleged threat to national security only a few months ago, this is a remarkable change of heart. Nexen is a Canadian energy company, but the buyout required US approvals since it has assets in the Gulf of Mexico.<br /><br />Most countries – small and big, rich and poor — will go out of their way to accommodate their biggest trading partner, and this is where China will continue to make gains. Beijing will be able to influence trading blocs and individual nations part of such groupings. So if China and Germany can work to each other’s advantage, would Berlin want it some other way for the European Union? Probably not, as it will not only sour bilateral trade ties but also impact jobs and the economy.<br /><br />At the peak of its colonial might, Great Britain was the world’s biggest merchant. Not only did it control a vast swathe of the landmass with colonies dotting all parts of the globe, its ships controlled most of the oceans. The little island of traders off the coast of continental Europe also influenced the economies and politics of a large part of the world before the Empire crumbled and United States – itself a former colony – became the world’s biggest economy and trader after World War II.<br /><br />It is now China’s turn, even though it might be reluctant to wear the crown. Since it opened its economy in the late 1970s, China’s shadow over the world has never been bigger than it is now. It may not yet be a political and military superpower like the United States, but its economic prowess gives it an edge over most of the world. It’s an edge that Beijing has used to its advantage in the past and will continue to do use.<br /><br />(<em>The columnist is president, public affairs, Genesis Burson-Marsteller and a former newspaper editor. He has a deep interest in matters related to China and Southeast Asia</em>)<br /> </div>
