The state-of-the-art rocket launchers and tanks and perfectly choreographed troops parading through Tiananmen Square yesterday to mark the 60th anniversary of the foundation of the People's Republic of China (PRC) were a powerful symbol of how far the country has come in six decades.
The display highlighted China's much vaunted "soft power", backed by formidable military strength, underlining the country's political position as a superpower. But this diplomatic muscle is built on China's astonishing economic rise in the past three decades and the country's emergence as the world's third-largest economy, one seen as a saviour for the rest of the world.
The tanks, rocket launchers and well-dressed children waving flags and banners were intended to represent a country in robust economic health, while the rest of the world still struggles with the Great Recession.
Indeed, China is well on track to achieve 8 per cent economic growth this year, propped up by one of the biggest fiscal stimulus plans the world has ever seen, where bank lending accounted for a staggering 25 per cent of GDP in the first half of this year.
Gazing down on the parade was the image of Chairman Mao Zedong, founding father of the PRC, the "Great Helmsman" who steered the communist course for many years. His portrait also featured on a float borne aloft through the crowds.
But the first 30 years of the People's Republic were characterised by grinding poverty, of grain production targets oversubscribed on paper while the people starved during the disastrous agricultural reforms of the Great Leap Forward, and of the political instability of the Cultural Revolution (1966-1976) which kept China closed to the world. Mao was, frankly, bad for business.
Much more in evidence at yesterday's parade were Mao's successors: the great reformer Deng Xiaoping; the incumbent and similarly reform-minded leader, Hu Jintao, and, surprisingly perhaps, Jiang Zemin. Mr Jiang, president Hu's immediate predecessor, appears to be given more credit than ever for steering through the system of socialism with Chinese characteristics which, heading into the second decade of the 21st century, looks an awful lot like capitalism with a strong element of state involvement.
The real star of the parade, however, was Mr Hu, who has held fast to the economic reforms introduced by his predecessors while distancing himself from calls for greater democracy in China.
"The development and progress of the New China has fully proved that only socialism can save China. We will unswervingly continue to follow the policy of socialism with Chinese characteristics," he said in his keynote address.
Unusually for an administration that has sought to distance itself from the cult of personality that caused so much damage in the latter days of the Mao era, a float carried a huge portrait of Mr Hu through the crowds. It broadcast a message outlining his version of stakeholder capitalism: "Work hard to achieve new victories in building a moderately prosperous society in all respects and write a new chapter of happy life for the people!"
Significantly - and China is a country where symbols are a hugely important way of reading political realities - Mr Hu wore a suit in the style of Sun Yat-sen, the great Nationalist leader who founded the Chinese Republic in 1911, a style also favoured by Chairman Mao. The rest of the State Council, or cabinet, wore the blue business suits the Chinese leadership has favoured for years now.
The message is China means business as usual, but Mr Hu will continue to rule with a firm hand.
It would be wrong to think China has abandoned its Marxist-Leninist principles entirely. The Communist Party has always been suspicious of the idea of a totally free market, largely because that makes it difficult to enforce political control, and the leadership needs that to ensure single-party rule.
Mr Hu's obsession with stability is generally seen as a positive sign for the country's growth prospects as it means the government will provide stimulus as necessary to keep the economy growing.
"Growth can be sustained," said Wang Tao, a UBS economist. "We expect a sustained recovery of GDP growth to 8.2 per cent in 2009 and 8.5 per cent in 2010. The massive credit growth in the first half of 2009, coupled with local governments' drive for investment and growth, has and will continue to lead to rapid fixed investment growth in the coming months," she said.
Her bullish tone is borne out by China's official Purchasing Managers Index (PMI) which rose to 54.3 from 54.0 in August, a sign that the country's manufacturing sector continued to gather strength last month as a pick-up in new orders boosted both output and jobs. Export orders gathered force to reach a 16-month high, as did employment, which hit the second-highest reading on record.
"These conditions show China's economy will continue to recover and, following the relatively quick increases in employment and incomes, the recovery is sustainable," said Zhang Liqun, a researcher at the State Council's Development Research Centre.
Premier Wen Jiabao and other senior officials have spoken of how they are confident China can overcome the economic crisis. But they also urge caution, saying ongoing uncertainties mean the authorities must guard against risks.
Liu Tienan, the vice chairman of the National Development and Reform Commission, China's top planning agency, said in Hong Kong recently: "China's economy is at a crucial time of recovery. Stability is the foremost task in front of us. We should guard against all sorts of risks, including inflation."
Following the military parade was the mass parade that featured all kinds of floats. One represented advances in agriculture, the great achievement of post-revolutionary China being to feed its 1.3 billion people.
Another was supposed to represent industrial development, with a focus on car production and the transportation industry.
Then came the energy float, which featured model oil derricks and coal-fired power stations alongside green energy options such as wind and solar power.
Green energy even got its own float, which illustrates the fact that China is aware of its responsibilities as the world's biggest emitter of carbon dioxide, and highlights, perhaps, the challenge it faces in dealing with these issues.
As the parade wound down and the tanks and rocket launchers headed back to base, the next battle facing this leadership will be to see how it can maintain this kind of growth beyond the end of the stimulus programme.
business@thenational.ae
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The specs: 2019 Mini Cooper
Price, base: Dh141,740 (three-door) / Dh165,900 (five-door)
Engine: 1.5-litre four-cylinder (Cooper) / 2.0-litre four-cylinder (Cooper S)
Power: 136hp @ 4,500rpm (Cooper) / 192hp @ 5,000rpm (Cooper S)
Torque: 220Nm @ 1,480rpm (Cooper) / 280Nm @ 1,350rpm (Cooper S)
Transmission: Seven-speed automatic
Fuel consumption, combined: 4.8L to 5.4L / 100km
The%20specs
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Pots for the Asian Qualifiers
Pot 1: Iran, Japan, South Korea, Australia, Qatar, United Arab Emirates, Saudi Arabia, China
Pot 2: Iraq, Uzbekistan, Syria, Oman, Lebanon, Kyrgyz Republic, Vietnam, Jordan
Pot 3: Palestine, India, Bahrain, Thailand, Tajikistan, North Korea, Chinese Taipei, Philippines
Pot 4: Turkmenistan, Myanmar, Hong Kong, Yemen, Afghanistan, Maldives, Kuwait, Malaysia
Pot 5: Indonesia, Singapore, Nepal, Cambodia, Bangladesh, Mongolia, Guam, Macau/Sri Lanka
The specs: Rolls-Royce Cullinan
Price, base: Dh1 million (estimate)
Engine: 6.75-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 563hp @ 5,000rpm
Torque: 850Nm @ 1,600rpm
Fuel economy, combined: 15L / 100km
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
PAKISTAN SQUAD
Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
How to help
Donate towards food and a flight by transferring money to this registered charity's account.
Account name: Dar Al Ber Society
Account Number: 11 530 734
IBAN: AE 9805 000 000 000 11 530 734
Bank Name: Abu Dhabi Islamic Bank
To ensure that your contribution reaches these people, please send the copy of deposit/transfer receipt to: juhi.khan@daralber.ae
The specs
Engine: 3.8-litre V6
Power: 295hp at 6,000rpm
Torque: 355Nm at 5,200rpm
Transmission: 8-speed auto
Fuel consumption: 10.7L/100km
Price: Dh179,999-plus
On sale: now
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
