I have just returned from a work trip covering the AFP Conference of corporate treasurers in Miami, US, and every time I turn on a TV now back in the UK I expect to be assailed by a barrage of political attack ads. That’s the danger of visiting a swing state such as Florida during the US presidential elections of course, but one thing that kept coming up in those ads is China’s potential threat to the US, China’s alleged ‘manipulation’ of its currency, the rise of China and so forth. It got me thinking about the Sibos 2012 trade show, organised by Swift, and the withdrawal of Chinese banks from attending the event this year in Osaka, Japan, after political rows. Is this the 'new normal' quasi cold war kind of situation that global politics and finance is going to have to navigate in the 21st century? I hope not.
The political row between China and Japan over the sovereignty of islands in the East China Sea known as Diaoyu in China and Senkaku in Japan has already lead to the withdrawal of the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China and the Bank of China from Sibos 2012; all of whom have withdrawn their speakers, stands and delegates from this year’s Sibos, which is being held 29 October – 1 November in Osaka, Japan.
The potentially resource-rich Senkaku / Diaoyu islands are currently controlled by Japan, which recently brought them from a private Japanese owner, but they are claimed by both China and Taiwan as well. The row has even lead to cancelled World Bank and IMF meetings on the global finance and political stage, illustrating just how powerless Swift has been in preventing the dispute from adversely affecting its Sibos show.
The withdrawal of the Chinese banks is a major blow to Sibos 2012, which is already struggling for numbers as most Asian shows do, because many attendees would have been keen to talk to Chinese bankers about the rise of the renminbi (RMB) as a trade currency, the increasing liberalisation of the currency and the adoption of new technology and payment systems in China and Asia – all of which are expected to hot topics out in Osaka.
I just hope that this row is not a premonition of what is to come as China and Asia are now the drivers of the world economy and source of much global banking business and technology investments, alongside other ‘emerged’ markets such as Brazil and India. If outside political arguments are allowed to disturb the normal running of global finance – not to mention trade shows – then what hope is there of a smooth transition of power from West to East without conflicts emerging and what disruptions to ‘business as usual’ might lie ahead as China perhaps becomes increasingly nationalistic as its power rises? The latter supposition was one of the key threats outlined at the AFP Conference I was at last week in Miami by the closing keynote speaker, Dr Robert Gates, ex-head head of the CIA and US Defence Secretary, who outlined the political scene for the 21st century. A century that incidentally is often referred to as the Chinese century as the 20th was called the American century. As China’s export-led economy is adversely impacted by a global economic slowdown and its gradual move towards value-added services, mirroring Japan’s earlier development cycle ironically, the threat of nationalism as living standards stall might well create problems in the future, said Gates.
There is no guarantee of this, of course, and I like most other sane people sincerely hope that the recent Chinese / US and China / Japan rows are just growing pains as a new world order is established. No-one wants to return to the days of the cold war where politics impinged upon every single business, sporting, diplomatic or political consideration. The importance of keeping politics out of business has already been demonstrated by the sad withdrawal of the Chinese banks from Sibos 2012 – let us hope that it is a one-off.
With Swift planning the next Sibos trade shows in Dubai in 2013, Boston in the US during 2014 and Singapore in 2015, the Sibos jamboree is not due to return to Europe until 2016 at the earliest, as the organisers target the growing Asian and traditional American economic powerhouses of the future. Let’s hope that there are no more boycotts of these future shows.
It would be better if everyone could leave the politics aside and just concentrate on the show. The intricacies of the Swift Standards Forum or the superbly geeky Innotribe innovation sessions at Sibos are quite enough to be getting along with, without having to worry about what premier said what at various national executives across the globe.