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chine Global systemic crisis – 2015: The world is defecting to the East
Two important facts emerge from the past four weeks’ news. First, China is becoming the world’s largest economic power, officially overtaking the US, based on GDP measured in purchasing power terms (IMF figures) of $17.61 trillion (compared to $17.4 trillion for the US). If the official media hasn’t raised the slightest eyebrow to this information, our team believes that it’s an historic event: the US is no longer the world’s largest economic power and, inevitably, that changes everything ! (1)
 GEAB N°88 is available! Global systemic crisis – 2015: The world is defecting to the East
Chart 1: China GDP (in blue) and US GDP (in red) in purchasing power parity (PPP) in $trillions, 2002 – 2090 – Source: Financial TimesEspecially as, in addition to crossing this threshold, the US, after having tried to impress the world with an overflowing militarism during the Ukrainian crisis, is revealing a major strategic weakness in its “management” of the Iraqi crisis. A strong-arm policy which seemed to require the world to remain under US tutelage for an as yet undefined time is coming to an end.

Both these two indicators enable us to see the beginnings of a major turning point in the unfolding of the global systemic crisis: a tilt from a US world to a Chinese world…

Europe, Russia – Setting up a Chinese-style Marshall plan 

This obvious emergence of the Chinese player was precipitated by the Ukrainian crisis. Whilst it was in China’s interest to develop its emergence from under the radar, whilst the Russians kept their distance from an inevitably invasive China, whilst the Europeans also had to maintain the conditions for a smooth emergence of this mega-player, the Ukrainian crisis accelerated the change and caused the players to partly lose out.We have already noted that the Ukrainian crisis and the political sanctions pushed the Russians to sign the famous Russian-Chinese gas agreement on less advantageous terms than they had hoped. The Ukraine has lost out to the Russians in their negotiations with China on this agreement.
Currently, the Chinese Prime Minister is on an official visit to Europe and Russia (3). His pockets are full of contracts, investment projects and business prospects (4), a real Marshall plan for the European and Russian economies’ reconstruction partially destroyed by the Ukrainian war (5)… an irresistible plan of course. But are the conditions met for us to be careful enough to preserve our independence as regards this new power? Remember that the Marshall plan helped bind post-war Europe to the US.

The City has already been saved from bankruptcy by China making it the leading financial centre outside China for issuing Yuan bonds (6) Accordingly, the UK has become a strong proponent of adding the Yuan to IMF SDRs. The ECB is even beginning to consider adding the Yuan to its international reserves (7) And Europe finds itself playing the role which behooves it as the facilitator of systemic transition between a ... Read