Since my early days in Beijing, back to the time where Yuan were frozenly  tagged to US dollar at the never-returning  8.3 RMB per USD,  I have always been very skeptical about decade-long projection about how China would be the sole financial and political ruler of the world. At that time, China’s destiny as the factory of the world was etched in stone. Outpacing US and Europe and becoming the world’s largest industrial manufacturer have already been showed as being no longer a challenge for China’s competitive, ultra-specialized production hubs.

Looking at non-stop migrants from the countryside flooding the old HuTongs of the ancient capital with their working tired faces and terrible oral health I didn’t make the mental exercise of how everyday life reality was lived out, would some time in timeline meet the now-broken Wall Street fancy investment bank forecast of how China would surpass the top economies in the world in the following decades. Everyday street life simply did not match with newspaper headlines.

If one has to argue that numbers and macro-economic forecasts are rarely perceptible in daily life and human lifestyle, I can agree in part, because as the mass media exposes China’s  mainland economic miracle in China and abroad, I could not feel the kind of change in lifestyle, maybe bending towards a more “imperialistic”, straight-forward view of the world. I could never feel any sign of that particular kind of war-like, self-affirmative ambition, neither in my Chinese counterparts at Peking University, nor at the factory owners that I came to met in the following years, as my business relationships flourished throughout mainland. In my naïve young mind, there was simply no way how the tiny, paper-white skeleton-body, noodle-eater Chinese would take over the world.

It was not until last year when I first heard some smart people cogitating whether People’s Currency (RMB) will ever substitute US dollar as the standard international trading currency, bringing Bretton Woods down. If I had ever heard such an awkward statement at the beginning of the decade, there was no possible reaction other than laughing aloud, as a clear sign of skepticism. 

Please do not get me wrong. I had never stopped believing China would outpace major world economies and actually become the largest manufacturing nation in the world.  With its production installed capacity, export-driven economy (so far) and adequate transportation structure, such as paved high-speed roads, trains and high-container output processing seaports, it’s unlikely that China won’t overpass US economy in the following years in terms of GDP. I have always defended the position that China’s growth is not only based on cheap factory-floor labor, but also in the broad education and infra-structure projects  that decade-long, state-controlled development plans have delivered.

What I was skeptical about over the years is China’s capacity to project its material manufacturing power overseas, converting it in soft power to the extent of changing current world international institutions, such as the old Washington Consensus.

Shifting time to the present date, shifting scenarios to the arrogance of wealthy southern states, I cannot only believe in it, but also I can whisper a brief prospect of how this Yuan-ruled world can become.
 
Backgound-scenario starts with another regular buying trip to wealthy Zhejiang province, sourcing automotive components for a major wholesaler in Brazil, after more than a year abroad. The materialistic power of China can be perceived not only as brick and mortar factories delivering astonishing volumes of industrialized cargo to overseas customers literally around the world, but as a well-structured, highly ambitioned engine towards the future of the nation, and a new shaping of world power. You can see that because a third of the suppliers visited, once small factories in the middle of nowhere, will be getting listed in Shanghai or Shenzhen stock market in the coming years. Second, they have top-quality machinery imported from Germany, Taiwan, USA and Japan. Third, they drive Touaregs, Hummers, Audi A6s, Mercedes and Porsches. Hundreds of them, all brand new, imported cars. Fourth, they travel abroad constantly, striving to unleash new markets, not only US-Europe axis but also including South America and the Middle East.   

That is only the very exterior perception of a wealthy province. Then let us talk about landscape.  Everywhere in China now you cannot ride 30 miles without seeing gigantic, never-ending building projects, most of them heavy pillars all over the horizon. It is the new Tie Lu, the massive bullet-train railroad network system China is building for itself, with trains running hourly from each province main cities centres in 350 km/h speed, high tech trains. That is what I mean by shaping the future, since that will lead inevitably to an interconnected behemoth of city hubs, thus making transportation for business and common middle-class people incredibly easy thorough-out the awaking giant. Simply put, it will virtually take down the concept of urban and intra-city transportation, to an ever-developing complex of linked megalopolises, no clear division of rural and urban areas, the old inaccessible countryside China, in a matter of decades, will cease to exist.  As a quick example, before, it would take 4-5 hour car drive or 1-hour plane flight to go to our old injection-molding supplier in the centre of Zhejiang province. Not to mention the new 35km bridge across Hangzhou Bay, there is already a fast train that makes downtown Shanghai to factory door in 2 hours, which means by same day you can leave your apartment in Shanghai, get the new-built subway two corners away, take the train and still come back for dinner. Same-day, high-speed train business trips helped me to shift my old Beijing view to actually believe it and feel the emerging power of China, which I prefer to call the Shanghai Consensus, not Beijing’s. 

It is 6pm, 34o C and very humid. Scenario is Shanghai Lujiazui financial centre, with its crowded streets in another EXPO day, at the rush hour, all the foreign and well-educated Chinese office workers and the magnificent XXI century architectural monumental skyscrapers. The battlefield to go up and down the subway. People talking in many languages, a hundred nationalities bounded by the same city lights. This is much more alike the backstage of Yuan’s ruling influence over world finance. I feel bad not being able to completely translate the power of Shanghai, it’s Zeitgeist (a spirit of a time) in words. The brighter than ever lights at the Pearl of Orient tower, the finest dining places, the outburst of energy moving people over its crowded walkways. The sound of music from down the subway entrance, the students at the convenience store.  The passing, lonely-in-the-crowd Shanghai girl with her fake LV bags and the flip-flop sandals, rushing back home. I spend two years without coming back to Shanghai, only in the south and north parts of China. I could simply not recognize old Hongqiao airport, which I used twice a week to take flights to other cities in China, it was totally rebuilt and expanded in just as if it was new. The Line 2 subway was three times longer than last time I took it, they simply added 5 or 6 stations east, and 5 or 6 stations west. Not to mention that Shanghai now has nothing less than 13 subway lines! One cannot buy an apartment downtown with less than RMB 20K per square foot, which means that an ordinary 60sqm apartment downtown could not be sold for less than USD 180k, and that with the current post-crisis  US$ 1 to RMB 6,7 exchange rate, which will appreciate for sure until end of the year. Explanation: the whole world wants to move to Shanghai. Despite of the unsustainable boom, I can see but a symbol of prestige typical of rising nations.

That proven reality, yes, that I can trade for the Manhattan lights, even though I really like the Big Apple. But now I can buy the idea of a ruling Yuan. Why must businessmen all around the world keep purchasing greenish gray pieces of paper, helping US to export its major commodity, the US$, while there is no value added in the operation? Why does an telegraphic transfer from a Thai importer have to come all the way to a Wall Street bank computer, convert Thailand Baht to USD at a given exchange rate, pay bank fees, wait for a couple of days, then re-convert US$´s to RMBs at a branch of Bank of China in Zhejiang province? Does it have to be that complicated? What value is added in the process? Is the US$ that solid-gold nowadays that still worth keeping the scheme? These are a few questions that more and more people will start to make themselves. Not to mention the outbound of RMB to purchase US$ to pay its imports, as China is also turning into world first importer of large array of consumer products. Interesting times we are living, that’s a watershed world. Keep tuned.