Moscow: China is a true island of stability amid the raging financial crisis. There are no chances of a large-scale crisis in the Chinese economy. An economic shock, let alone a recession, is unlikely in China because of its solid economic health and reliable protection from external risks.
Given its huge international reserves at $1.9 trillion, it can maintain its own stability, but it can also help developed countries overcome the crisis.
Is it ready to offer the money? And will anyone take it?
Bad loans make up only five per cent of Chinese banks' assets, which work mainly with the domestic market. The figure was 50 per cent in 1997-1998, when Asia was hit by a severe financial crisis.
China's dependence on exports is not as heavy as may seem at first glance. Officially, exports account for 37 per cent of its revenues and seem to be the driver of the Chinese economy.
But independent surveys by Dragonomics, an advisory firm specializing in China, put its "true" export share at just under 10 per cent of its GDP.
It is internal investments, which account for 40 per cent of its GDP, that are the driving force of China's economy. Although part of them is channeled into export-oriented projects, the global financial crunch will not slow China considerably.
Chinese companies' foreign debts are not large, only $87.6 billion as of March 2008, and their domestic debts do not worry international economists. China's budget surplus was approximately one per cent in 2007 and will be almost the same this year.
According to Arthur Kroeber, managing director at Dragonomics, the absence of structural problems make a "hard landing" for the Chinese economy highly unlikely.
Even if it happens, the worst possible scenario for China will be one year of very slow growth and average annual growth rates of 6.25-6.5 per cent for the next five years.
Kroeber thinks "a global slowdown - if tempered - could help China stage a soft landing for its breakneck economic growth."
This means a fall in economic growth rates between eight per cent and 8.5 per cent. At the same time, a decline in consumer activity in industrialized countries may have a positive effect on China's exports, with Western consumers opting for cheaper Chinese goods.
Given its strength and international reserves, China could have gained much more from energetic actions on the world market. But Chinese authorities seem unready for action, and the West is not eager to allow Chinese money in.
Evidence of this are the modest international achievements of the China Investment Corporation (CIC), China's sovereign investment fund set up last year to manage as much as $500 billion.
In 2007, the CIC spent $3 billion to buy into US investment company Blackstone Group, and paid $5 billion for a 9.9 per cent stake in Morgan Stanley.
As a result of the current crisis, the value of these two assets has plunged by at least two-thirds.
Several days ago, the Ping An insurance company announced the termination of a planned deal to buy 50 per cent stake in the Fortis banking and insurance group.
Ping An, which holds five per cent stake in Fortis, has lost $2.3 billion due to the financial crisis.
China's losses from its foreign investments have shocked the officials who had made the "buy" decisions. The bureaucratic psychology is a powerful hindrance to investment decisions.
China's current skepticism is fuelled by political considerations. The Western public and politicians are seldom happy with Chinese corporations buying into their companies.
The anti-Chinese propaganda campaign launched in the US to prevent China from buying Unocal infuriated China.
No wonder the Chinese are now considering foreign projects in the light of Deng Xiaoping's warning, "Cross the river by feeling the stones."
Seeking to keep its foreign transactions maximally secret, China is buying relatively small stakes, below the three per cent threshold at which shareholdings are required to be disclosed.
The most frequent buyer is SAFE Investment, the Hong Kong-based subsidiary of the State Administration of Foreign Exchange (SAFE), an arm of the People's Bank of China.
According to The Sunday Telegraph, SAFE Investment owns minority stakes in more than half of the FTSE100 companies, including Aviva, British Energy, Cadbury, the London Stock Exchange, Hong Kong and Shanghai Banking Copr., Marks & Spenser, and Tesco.
China has spent over $9 billion on the acquisition of minority stakes, ranging between 0.75 and one per cent in Britain.
Like the Americans in the case of Unocal, the British wonders what the political motives for the implicit Chinese actions could be.
It is reported that SAFE Investment plans to spend $85 billion to purchase cheap foreign assets, the amount by which China's foreign currency reserves increase monthly.
But nobody knows what it is going to buy.
Gao Xiqing, CIC's general manager and chief investment officer, said in one of his rare interviews with a Western media: "We are already getting too much, almost unfair amount of attention. You know, the Chinese culture is being self-effacing. We don't stick our head out for people to knock on."