IF there were any doubts that 2009 was the year when China decided to use its financial clout to influence global economic policies and regulation, then a recent episode will have packed them away.
China's dissatisfaction with a raft of derivatives contracts signed by its large energy companies, mainly for hedging purposes, has been bubbling away for 12 months. Now they have effectively told six of the world's biggest investment banks to go and get stuffed. At the end of August, word got out that a group of China's state-owned enterprises had sent legal letters to the banks saying they reserved the right to withhold payments on commodities derivatives contracts they had bought. The news shook the markets only briefly, but this extraordinary move has potentially enormous implications.
One of the clear messages that came out of the World Economic Forum meeting in the Chinese city of Dalian two weeks ago was that the developing world very squarely puts the blame for the global recession on the West and they are being forced to bear the brunt of the fallout while the bankers who invested the toxic assets are being bailed out.
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