Are We in a Bipolar or Nonpolar World?

The West has elected Barack Obama, and in the East the Chinese Communist Party (CCP) has appointed the men. There isn’t a single woman in the “forward thinking” communist party, who will lead the country for the next five years, including new CCP Secretary General Xi Jinping, who in March will become president of the most populous country on the planet.

Xi Jinping’s administration will be the fifth ruling generation since Mao’s revolution. All reformists, including Xi, a “princeling” of the “aristocracy” [or] Chinese Communist bureaucracy, have nightmarish memories of Maoism. When he was nine, he experienced his family’s disgrace when the “Cultural Revolution” brutally ended the career of his father, a reformist colleague of Deng Xiaoping’s.

After a fleeting period of unipolarity after the disappearance of the USSR, when it seemed that world power was solely held by the United States, another actor emerges. The economic crisis has accelerated the reshuffling of powers. According to the Organization for Economic Cooperation and Development (OECD), by the end of 2016 the Chinese economy will be larger than that of the United States and the combined economies of the entire Eurozone. It is said the world is not gravitating toward a new bipolarity, but rather a less polarized, and more peaceful, global society.

Xi Jinping will be governing when the Red Dragon is established as the major world economic power, which will necessitate his converting the yuan into a global currency, thereby strengthening it. Additionally, China seems to be moving toward a change in its development model and gearing more toward internal consumption, having until now concentrated on exports and state investments. The greatest risk for Latin America due to the Chinese economy’s distancing itself from strong state industrial development is a fall in demand for raw materials, which constitute the majority of exports from the region.

However, if China dedicates itself to reinforcing internal consumption, that could create opportunities for Latin American businesses to export products of more value, thereby increasing and expanding its investments in the communist country. In 2011, China’s business with Latin America was $241 billion. In the same year, the Asian country made $10.1 billion in non-financial investments in the region, which made Latin America the second largest destination for foreign direct investment from the People’s Republic. The Asian giant is now Latin America’s third largest business partner, primary business partner for Brazil, Chile and Peru, and the third largest source of investments for the region.