When Deng Xiaoping visited the US in 1979 he attended a rodeo, signalling not especially subtly perhaps that he was firmly in the saddle as China began a process of opening up to the world. Xi Jinping, the current Chinese president, visits America this week in what could be the most important summit since the 1970s.
A well-publicised anti-corruption drive and a more assertive foreign policy, as well as cybersecurity and climate change issues and an economy firing on fewer cylinders, mean that when Mr Xi sits down with Barack Obama there will be some key issues of substance to be ironed out.
In the seven or so seconds it takes you to read this next sentence, 28 children will have been born around the world, according to Unicef data.
Many of them will live healthy lives and see this century out. But when they talk to their grandchildren or friends how will they describe their 85 years? As an era of progress or lost opportunities in the pivotal relationship of the 21st century, between the US and China?
Let’s start with the basics. It’s easy to see what the US offers as the world’s major economic power, but what does China offer the US?
From roughly the time that Ronald Reagan became US president in 1981, China has witnessed the biggest movement of humans from field to factory. History has never seen anything like it.
China is growing. Its urbanisation drive means that approximately 220 million more people will move to urban areas over the next 15 years. In the 15 years of this century, 320m Chinese people became urbanites. This will ensure a greater focus in Beijing on public services, infrastructure, and – crucially – reducing pollution. It will also involve partnership with other countries. Europe has 35 cities of one million or more to attract US investment; China has 160.
This means opportunity, not just for China, but the US.
The world is changing. Predictions by the IMF suggest that by the end of this decade the Chinese economy will be worth nearly $27 trillion (Dh99tn), putting it ahead of the US. But China may not hold that position for long. In time, India will probably overtake them both. This does not diminish the importance of the US-China relationship, but it does broaden the perspective.
One particular issue stands out in US-China relations, and that is climate change. The world’s largest economies have a defining role to play in this discussion. All else, by definition, pales. And the climate on tackling climate change has improved.
China has agreed to cap its greenhouse gas emissions by 2030 and to increase its use of energy from zero-emission sources to 20 per cent by the same year.
The United States has pledged to cut its emissions 26 to 28 per cent below 2005 levels by 2025.
Of course, the world needs the US and China to work together. For their own interests alone, both need to work together.
This takes on added impetus when you consider the UN expects the global population to hit 10 billion by 2085, up from about 7bn today.
Most of this population expansion is expected to come from the developing world. Africa’s population will rise from 1bn in 2010 to 3.6bn in 2100. Just after the Second World War, 32 per cent of the world’s people lived in today’s rich countries. Just 13 per cent will do so by 2100.
There are billions of reasons to get this relationship right. There are no excuses to get it wrong.
Tom Clifford is a journalist in China
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5