China is changing faster than ever before - everyone knows this but wait until you SEE it...

Four weeks ago, I started my exchange semester at Tsinghua University's School of Economics and Management, which is said to be China's most prestigious business school.

I am fascinated by the rapid both social and economic development of this country, which is truly unbelievable. The change can be seen and felt everyday in the changing faces of the largest cities Beijing and Shanghai but also in the growing self-confidence and openness of the Chinese people. They are willing and eager to challenge the largest global economies and I am sure they will prevail soon.

China is already the fourth largest ecomony in the world and has been able to sustain double-digit growth for several years now. And believe me, there is no sign that this will change soon.

With respect to exports, China is already number three worldwide (behind the US and Germany) and receives the second-largest amount of direct foreign investment (behind the US).

But all this data becomes negligible when you look at foreign currency reserves: China has by far the largest amount of curreny reserves. The country now holds nearly one trillion USD, mostly in US currency. In other words, US consumption is to a large extent financed by Chinese exports. China is the largest holder of US federal bonds which makes the US highly dependent on China. In case China would entirely change its currency reserves from USD into EUR, this would set the USD/EUR exchange rate at over 2 USD/EUR instantaneously...

This data and the last four weeks in my life have shown me, that for any internationally-operating company, China is not an option but a must. The sooner interntional companies begin to understand this country and adapt to its culture and rules, the sooner profits will materialize.

One comment on the fotos, which represent the current development in Beijing: the upper foto shows a traditional on-the-road bike repair shop, which is still common in the city. The foto below shows one of the growing number of high-end shopping malls specializing in designer clothing - you can find anything from Gucci to Burberry's there...