|Culture Map from the World Values Survey|
In a recent paper published by a London think-tank, the Legatum Institute, its author the Geographer, Joel Kotkin, looks at the world through the prism of culture. The ties of history and habit and of shared experiences and common customs can explain a lot about who does business with whom. For example research shows that two countries that share a common language trade 42pc more with each other. Two countries that once shared imperial ties trade a massive 188pc more. Imperial ties affect trade patterns more than membership of a common currency which boosted trade by only 114pc.
China's growing might is reinforced by its links with the overseas Chinese. Around 70m ethnic Chinese live outside mainland China. Some are descended from those that moved abroad during China's imperial expansion from the 12th to 15th centuries, settling in what is now Indonesia, Vietnam, Malaysia and Myanmar. More recently many have migrated to the US and to other developed countries.
Overseas Chinese are the biggest innovators in mainland China, around 68pc of the foreign direct investment that China received in 2009 came from places where ethnic Chinese are the biggest group such as Hong Kong, Singapore and Taiwan. Moreover China's government has funded hundreds of Confucius institutes to teach the Chinese language and nurture China's soft power abroad. In business, cultural ties matter because they lower transaction costs. And cultural affinity can super charge communication and foster instant trust the glue of successful business. In this way kinship still counts to foster relationships. Chinese-Americans naturally do business with Shanghai and Singapore.
The Hispanosphere and the Anglosphere
In a similar vein research shows, for the hispanosphere and the anglosphere, the two great European cultural blocks, that the flows of people and information are a massive 93pc higher when compared with traffic flows with the rest of the world. Moreover it is calculated that Spain's ties with its old ultramar provinces in América Latina are even closer than Britain's with its ex-colonies in the US, Ireland, Canada, Australia and New Zealand.
Interestingly, the World Values Survey divides the world into big cultural zones as the chart above shows on the basis of common values. The Anglosphere is currently the world's biggest economic block, it accounts for more than 25pc of the world's GDP. It produces more scientific papers than any other country. In addition, English is the closest the world has to a lingua franca. It has dominated international business and diplomacy in the 20th century and into the 21st century.
Language Diversity in the 21st century
The Chart below shows the US, China, Mexico and Russia have over 100 languages each, but score relatively low on the diversity index, because English, Chinese, Spanish and Russian have grown to the point where they threaten to destroy the many tiny native languages. By contrast, linguistic rivalry and relative poverty have kept a single language from dominating countries like India and Nigeria, which score high on the diversity index. Both poverty and geography combine to make Congo and Papua New Guinea the most linguistically diverse countries in the world.
|Chart of Language Diversity in 21st Century Source: The Economist|