While Europe grapples with a 12 Bln euro plan to restore hope in the Greeks, and carries out reflections on the Transatlantic Trade and Investment partnership with the United States (which considering a set of real social and environmental risks would create the largest area of free trade in the world), a large speculation bubble burst in Beijing and Shanghai currently estimated at 2.500 billion dollars. And now the question is whether this nasty surprise may stop the growth of the Asian country, or even introduce destabilizing elements, with the prospect of dragging downwards the economy of half of the planet. The collapse and rebound of stock exchanges, from Tokyo to Wall Street, mitigated by the immediate intervention of the Chinese authorities, could be but the first sign of much deeper problems: not surprisingly economists representing various schools of thought have already warned of the danger of a sharp slowdown in the Chinese engine. The Chinese “giant” undoubtedly reposes on a solid manufacturing system, on the wide availability of raw materials, education, research and “brains” in abundance, along with cheap labor (often to the limits of the dignity of workers), on endless capital invested – in the homeland and abroad – in production and financial processes. But it’s equally true that China is witnessing strong population unbalances; the air is unbreathable owing to pollution mostly in urban areas, coupled by unrestrained exploitation of the environment; the real estate market has grown beyond all reasonable demands; the stock market is in the hands of speculators ready to profit to the detriment of tens and tens of millions of small shareholders… In short, even in the empire of the Far East, where a revised form of communism continues to reign, not everything is going well and that’s why a speculative attack against the Chinese market should be feared for its potential, perverse chain effect. The Germans are well aware of it. During the recent EU-China meeting in Brussels they reflected on the fact that they are the major Community partners of Beijing. But also France, United Kingdom, Italy or Spain preserved – in addition to USA, Russia, Japan, India – entertain close relations with China. Thus three conclusions can be drawn on the news arriving from the opposite side of the globe. First of all it confirms that economies are increasingly interdependent. This applies to the single European market and its currency, the euro; but it also goes for the rest of the world. And this interdependence does not only involve, as might be assumed, the “highest levels” of the economy (big business, transcontinental oil import and export…). In fact, it also affects the local markets, because we all carry in our pockets a Finnish mobile phone, we drive a German or Korean car, we eat burgers in an American chain and maybe wear a t-shirt “made in China” because it costs less … So the alarm that takes off from Shanghai should put on the alert the Portuguese clerk, the Italian housewife, the Brazilian worker, the Dutch fisherman. Not to mention those who live in developing or underdeveloped countries, as always happens, in fact, the poor always pay the highest price. The second warning is also linked to increased interdependence. In the contemporary era, marked by extra-large players, there appears to be increasingly less room for “small sizes”. Namely, the United States, China, Russia, South Africa, and the other Cyclops scattered across the continent do business and compete at a level of (almost) parity with subjects of similar size. Thus on the side of the Old Continent the European Union (reviewed and amended, strengthened, revived) is bound to be the true protagonist of the scene in the future. Certainly that role won’t belong to Germany or Greece alone, and nor to Italy, or Estonia, Slovakia or Ireland. Third point: what is happening in the Chinese stock markets rather than in US ones, in South American plantations or in the squares of Athens, once again involves the duty to question the development models we have undertaken so far, the values that innervate cross-border coexistence between different peoples, the tenure of modern democracies also with regard to a balanced relationship between politics, economy, justice and fundamental rights. The encyclical “Laudato si” by Pope Francis offers guidance on this subject.
China's stock market bubble scares fragile Western systems. Global interdependence grows. The role of Europe