原文:
IN THEORY, the ownership of a business in a capitalist economy is irrelevant. In practice, it is often controversial. From Japanese firms’ wave of purchases in America in the 1980s and Vodafone’s takeover of Germany’s Mannesmann in 2000 to the more recent antics of private-equity firms, acquisitions have often prompted bouts of national angst.
Such concerns are likely to intensify over the next few years, for China’s state-owned firms are on a shopping spree. Chinese buyers—mostly opaque, often run by the Communist Party and sometimes driven by politics as well as profit—have accounted for a tenth of cross-border deals by value this year, bidding for everything from American gas and Brazilian electricity grids to a Swedish car company, Volvo.
There is, understandably, rising opposition to this trend. The notion that capitalists should allow communists to buy their companies is, some argue, taking economic liberalism to an absurd extreme. But that is just what they should do, for the spread of Chinese capital should bring benefits to its recipients, and the world as a whole.
Why China is different
Not so long ago, government-controlled companies were regarded as half-formed creatures destined for full privatisation. But a combination of factors—huge savings in the emerging world, oil wealth and a loss of confidence in the free-market model—has led to a resurgence of state capitalism. About a fifth of global stockmarket value now sits in such firms, more than twice the level ten years ago.
The rich world has tolerated the rise of mercantilist economies before: think of South Korea’s state-led development or Singapore’s state-controlled firms, which are active acquirers abroad. Yet China is different. It is already the world’s second-biggest economy, and in time is likely to overtake America. Its firms are giants that until now have been inward-looking but are starting to use their vast resources abroad.
Chinese firms own just 6% of global investment in international business. Historically, top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50%, in 1914 and 1967 respectively. China’s natural rise could be turbocharged by its vast pool of savings. Today this is largely invested in rich countries’ government bonds; tomorrow it could be used to buy companies and protect China against rich countries’ devaluations and possible defaults.
Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets. But they are under the guidance of a state that many countries consider a strategic competitor, not an ally. As our briefing explains (see article), it often appoints executives, directs deals and finances them through state banks. Once bought, natural-resource firms can become captive suppliers of the Middle Kingdom. Some believe China Inc can be more sinister than that: for example, America thinks that Chinese telecoms-equipment firms pose a threat to its national security.
Private companies have played a big part in delivering the benefits of globalisation. They span the planet, allocating resources as they see fit and competing to win customers. The idea that an opaque government might come to dominate global capitalism is unappealing. Resources would be allocated by officials, not the market. Politics, not profit, might drive decisions. Such concerns are being voiced with increasing fervour. Australia and Canada, once open markets for takeovers, are creating hurdles for China’s state-backed firms, particularly in natural resources, and it is easy to see other countries becoming less welcoming too.
That would be a mistake. China is miles away from posing this kind of threat: most of its firms are only just finding their feet abroad. Even in natural resources, where it has been most active in dealmaking, it is not close to controlling enough supply to rig the market for most commodities.
Nor is China’s system as monolithic as foreigners often assume. State companies compete at home and their decision-making is consensual rather than dictatorial. When abroad they may have mixed motives, and some sectors—defence and strategic infrastructure, for instance—are too sensitive to allow them in. But such areas are relatively few.
What if Chinese state-owned companies run their acquisitions for politics, not profit? So long as other firms could satisfy consumers’ needs, it would not matter. Chinese companies could safely be allowed to own energy firms, for instance, in a competitive market where customers could turn to other suppliers. And if Chinese firms throw subsidised capital around the world, that’s fine. America and Europe could use the money. The danger that cheap Chinese capital might undermine rivals can be better dealt with by beefing up competition law than by keeping investment out.
Not all Chinese companies are state-directed. Some are largely independent and mainly interested in profits. Often these firms are making the running abroad. Take Volvo’s new owner, Geely. Volvo should now be able to sell more cars in China; without the deal its future was bleak.
Show a little confidence
Chinese firms can bring new energy and capital to flagging companies around the world; but influence will not just flow one way. To succeed abroad, Chinese companies will have to adapt. That means hiring local managers, investing in local research and placating local concerns—for example by listing subsidiaries locally. Indian and Brazilian firms have an advantage abroad thanks to their private-sector DNA and more open cultures. That has not been lost on Chinese managers.
China’s advance may bring benefits beyond the narrowly commercial. As it invests in the global economy, so its interests will become increasingly aligned with the rest of the world’s; and as that happens its enthusiasm for international co-operation may grow. To reject China’s advances would thus be a disservice to future generations, as well as a deeply pessimistic statement about capitalism’s confidence in itself.
Fabian Frank wrote: Nov 11th 2010 4:50 GMT .One can only hope that the Chinese leadership sees it the same way. I agree that not allowing Chinese enterprises into the world market could be interpreted as a weakness in capitalism, but without a democratic political system to balance its growing economic weight, can we trust the Chinese to play by the rules and to compete on equal terms? How can we be sure that a state owned manufacturer in China pays its debt to a state bank or the full price on electricity to a state owned electric company?
Jeremy Wong Fischer wrote: Nov 11th 2010 4:55 GMT .Dear Economist:
This is easily the most open-minded and refreshing piece on a China-related topic that I have seen written by you in about a century. I sat around here waiting for the baiting, fear-mongering, slander, communist-bashing and irresponsible journalism and all I found was positive advocacy for increased integration between Chinese companies and the rest of the world. Kudos. I can see a glimmer of hope in this newsmagazine.
Orion Burma wrote: Nov 11th 2010 5:20 GMT .Another piece from Economist rallying behind the motto of "open everything."
Here's my pet peeve about Western media's depiction of China: please stop calling China a communist country. China is CINO (no pun intended) "Communist in Name Only!" Japan and Scandinavian countries are probably more "communist" than China actually is.
Ohio wrote: Nov 11th 2010 5:47 GMT .The normal anti-monopoly fears should be raised when a large existing firm wishes to purchase further market share, but I fail to see how the fact that the corporations governance is strongly influenced by the CPC makes a difference. The laws that govern the coporation's operations do not change because a CPC controlled company has bought it. Yes, the CPC controlled company could engage in practices which favor other CPC controlled companies, but this applies to many other corporations without government ties.
To have only Chinese companies mining rare earth materials is a worry, and a potential problem, because of their monopoly power, i.e. the lack of an alternate supplier. As long as we have alternative suppliers, no monopoly, the world should be safe from the CPC. The only exception that I think we need to make for China is that, for anti-monopoly purposes, all Chinese corporations must be considered as one player in the market. If there are 5 chinese corporations who own 75% of a market, it is reasonable to stop a 6th from purchasing a non-chinese company that will raise that stake. Given the control exerted by the CPC over corporate governance of its largest corporations, it is fair to assume that the Chinese government could, in a crisis, choose to cause those 5 corporations to act as one player, and as such hold a near monopoly.
Beyond that, China investing in the outside world is a good thing. I think the level of xenophobia in Japan and the US/Europe decreased after Japan invested heavily in the 1980s, amidst much fear and recrimination. It was good for all sides, and eventually we all learned to work together. The same will be true for Chinese companies. Let's remember. The Chinese government holds enormous potential power by being the power behind the throne at most large Chinese corporations. But coupled with that power is the responsibility to keep Chinese capitalism firing on all cylinders. The Chinese government can't afford to playing geopolitical games with its corporations if that causes them to lag in growth and profitability.
The worst that the Chinese government has been guilty of up to now is mercantilism -- favoring the owners of production over the consumers and workers (most of them Chinese). That flawed policy has been practiced by many non-Chinese governments over the years, and it wasn't a good reason to stifle capital investment then. It shouldn't be now.
Ampoliros wrote: Nov 11th 2010 5:56 GMT .@Economist: "To reject China’s advances would thus be a disservice to future generations, as well as a deeply pessimistic statement about capitalism’s confidence in itself."
Deeply pessimistic, are we? Bubba, the last 30 years have proved beyond a shadow of doubt that the neoliberal mania of unregulated Capitalism and freetrade has directly lead....to the 'hollowing out' of the West.
Simply said, the West has lost mojo while China et al have acquired it. The West has *lost* more and more influence and clout, while the average Westerner is today a lot worse off than he was 30 years ago.
The only benefits were cheap consumer goods & credits. But tell me, Economist, what would you prefer: A good, solid job and & realistic prices *OR* dirt cheap prices for shoddy goods (built on the back of mass exploitation of millions of (Chinese) workers) and no job?
Waketh up, brothers. Globalisation has *FAILED*. Neoliberalism has *FAILED*. Anglosaxon Casino-Capitalism has *FAILED*.
It´s time for something new.
tp1024 wrote: Nov 11th 2010 5:58 GMT .The difference between the USA and China owning a significant part of the worlds assets is a very simple one: China deserves it.
The USA has 300 mio people, China has 1300 mio people - there's nothing wrong with China owning 4 times as many assets as the USA.
So, how bad will it be?
Well, not quite as bad as the fearmongerers would have it. Extrapolating from the current state of the world to the future has to take into account that China is in very special circumstances, as it is trying to build the infrastructure of the largest developed country the world has ever seen *from scratch*. This is necessarily a resource-intensive process and it is one that will only be repeated once on that scale: by India.
You wanted to bring wealth and happiness to the world - you did so on a massive scale (compared to the last couple of centuries anyway).
Now, deal with it.
Simon K. wrote: Nov 11th 2010 6:47 GMT .In reality, today's world is an American economic empire. Out of 1000 top global companies, more than 600 are American companies. When you go to China, you see American brands everywhere. In side the factory walls, Chinese workers are working day and night and get an insignificant amount of wages barely enough to survive, let alone send their kids to school.American companies channel billions of dollars back to the United States from every corner of the world. China is nothing but a geat playground for multinationals. Some chinese compnaies that too in raw materials extraction try to come the western market but there are huge barriers. China cannot erect the same barriers to the western countries because china does not have technology of its own. China's hand is always down.What world buying up by china we are talking about? How many US companies are in China? Does anyone has reliable data? How many chinese companies are in the US? If you look at the figure then you will know who is buying up whom. Nowadays, the west looks more like a communist in terms of economic policy. Comrade Obama is proposing a plan in which the central government of a country should decide the volume of exports and imports. Exchange of goods and services, in economics, should be determined by the market forces not by a government decree. Its is very difficult to understand Obamanomics.
Some in China may think that it is time to go outward. But what do they have to offer to the outside world except cheap capital? Nothing. On top of that, it is too early for China to go outward. China has millions of domestic problems to solve. For example, eighty per cent of China’s rivers and lakes are drying up. Sixty per cent of the water in seven major river systems is unsuitable for human contact. A third of the land is contaminated by acid rain. Two-thirds of the grassland have become desertified, and most of the forest is gone. Forty per cent of the arable land has been degraded by fertilizers and pesticides. Of the world’s 20 most polluted cities, 16 are in China.My picture of China and that of Econonist is quite different. here is the contrast.
tocharian wrote: Nov 11th 2010 7:09 GMT .Deng's famous quote about the colour of the cat can be interpreted in the following way: In order for China to become a "superpower" it has to go through an economic and technological "Great Leap Forward". Deng wanted technology transfer from the West. Russian communism wasn't really helping the Chinese economy too much!
Well, in the 90's, many people in the West (especially CEO's and Wall Street guys in the US) are so naive (or perhaps they were just out-smarting themselves?) that they thought they can make a "quick buck" out of the huge Chinese market and labour force, but look, who's got all the cash now? China! That's actually not even the main thing for China. What they really wanted was technology transfer and they got it big time (through offering cheap labour). Perhaps they would have gotten that (by hook or by crook) someday anyway, but the faulty economic and political decisions made in the West expedited those Chinese goals. China is a big and ambitious dragon and we will have to wait and see what the economic, political and environmental effects will be, of this immense amount of cash and technology transfer for the rest of the world. After giving away valuable and fundamental know-how and technology for short term gains (for little nano-blips in the stock market), it is hard for the capitalists in the West to complain that the Chinese are now capable of cloning (or reverse-engineering as the Chinese would call it) any high-tech product, including weapons, from the West. On top of that they got a lot of cash. A double whammy (or doubly shellacked? lol).
Matt Andersson wrote: Nov 11th 2010 7:12 GMT .Western perception of China, and interaction with its industries, are fairly naive.
There is a considerable difference between China, Chinese companies and the Chinese, yet they all operate as a singular state vehicle.
The Chinese laborer is largely an effective slave; his wage rates and total costs are so discounted to Western total labor cost that it forms the central basis for China's ability to undersell and penetrate markets with export substitution (even net transportation).
As for Chinese companies, they are not analogues to US or EU ones; they do not have similar governance, capital structure, incorporation and by-laws or regulatory conformity demands, amoung other obligations.
Western consumers do not refer to Chinese companies or Chinese brands because there are effectively none: they are subsumed under "China" because that's exactly how the country operates: it is a sovereign conglomerate.
If one names Germany, we might cite VW, Mercedes, Lufthansa or Deutsche Bank; if France, LVMH, Hermes, Air France or Dassault; if the US, Ford, Boeing, Microsoft, Intel, Dell, Caterpillar, Citi Bank or Harvard. We would also respond with dozens of names of businessmen, celebrities, politicians, investors, even families.
If one cites China, it generates one response: "China." China may have disaggregated industrial players, but they are part of a monolithic sovereign whole.
In the meantime, China is very vulnerable to leverage and exploitation by western firms, if they can see through the illusion of power.
Dan M. wrote: Nov 11th 2010 7:17 GMT .I'm with Jeremy Wong Fischer's opinion on this topic. I think The Economist could not sum it up any better than its last sentence:
"To reject China’s advances would thus be a ... deeply pessimistic statement about capitalism’s confidence in itself."
To act in a protectionist manner so blatantly, is to admit serious flaws in the capitalist system and strongly admit an underlying merit to the fundamentals of communism without intending it directly. It is a gross distortion of the economics of free markets by their proponents who are also their benefactors.
gkamarinos wrote: Nov 11th 2010 7:34 GMT .During the Soviet invasion of Checkoslovakia, a popular joke went like this:
As comrade Dubcek was twiddling his thumbs in his Soviet prison cell, a jin appears and offers the Check leader to fulfill the proverbial three wishes. Dubcek recovers from astonishment and accepts the offer.
First wish : Dubcek asks the jin to make sure all the Chinese come overland to Prague. The Jin is baffled but promises to make the wish come true.
Second wish, Dubcek asks the same. Again the jin cannot understand the point, but promises to oblige, once again.
Third wish, Dubcek asks again for all the Chinese to come to Prague overland . This time the jin loses its cool and asks Dubcek what the hell is this fixation of his with the Chinese travelling. And Dubcek answers calmly:
'Elementary, my dear Jin, if all Chinese come to Prague three times they will cross the Soviet Union ...6 times'!
I believe it is obvious that for us, of the lesser vassal states of the 4th Reich in the southern underbelly of the Beast, the distant rumble of the Chinese hordes ever closing, is our only precious source of lip smacking sweet 'Schadenfreude'!
LuckyBlackDragon wrote: Nov 11th 2010 11:18 GMT .The risk on China buying companies all over the world come from the fact that there are many democracies out there whose institutions are not as strong or well established as those in Europe or America. This means that as China gains specific weight on those economies it will also be capable of exercising considerable political power both in legal and non legal ways: from plain bribery to lobbying, China's possibilities in gaining support with such a strong checkbook are endless. Just see what Chavez has been able to do in Latin America: From buying full support from Argentina (due to owning a big chunk of their debt) to boosting the rise to power of leftist parties in Bolivia, Nicaragua and Ecuador. So far China has been careful not to show any political interest in their endeavors but make no mistake: sooner or later China will do what powers usually have been doing, from Spain in the XV century to Britain and lately the US in the XX century, and that has tremendous implications for democracy, human rights and the balance of power.
Bordersare wrote: Nov 12th 2010 3:42 GMT .Just a simple question for those who are freaking out about China playing by the rules... Have the western countries played by the rules til now? Isn't that the rise of another empire was because they failed to maintain what they had?
Also, I would second the idea of NOT calling China a communist country... If you have lived in China for some time, you would notice that you would function the same way as you would in the west... What is communism anyway? Try Japan, Russia, and south Korea and then make your comparison with China.
I think China needs a chance to be number one, like any other country... It's up to them however to maintain the power or give it away to another country. As for the following countries, they shouldn't see the difference anyway.
watchingchina wrote: Nov 12th 2010 4:00 GMT .o happy to compliment the Economist on an open-minded article. Well-done. Really.
Many posters, and a few governments too, appear excessively worried about China's foreign investment. In fact, thousands of foreign companies, especially US firms, are in China and have bought many assets. So far, China has purchased virtually nothing in any other country.
As to the opening philosophy, we might as well ask if Protestants should be able to buy assets in a Catholic country, or Muslims in a Protestant one, or maybe blacks in a white one. I don't believe we're so effective at separating racism or xenophobia from practical commercial concerns.
Anyone who wants to begin spending its surplus in the US (or the Right-Wing world), will have the process effectively shut down. For Japan, it was 'because you're yellow'; for China, it's 'because you're communist'. And often covered with a blanket of "national security". This is much more about Imperial Prerogative than about form of government. I can buy you because I'm superior to you and it's my right.
When the US had cash, it went around the world buying up everything attractive in sight and would bludgeon to death any government that objected.
Canada awoke one morning in the 1950s to discover that US companies owned almost the entire country. Almost all mining, manufacturing, distribution, wholesale, everything. Most products on the shelves were American; almost every program on TV was as well. Even every book used in Canada's elementary and high schools, and every university, were written and published in the US. It took Canada 50 years to buy itself back.
These huge Western multinationals from 'democratic' countries may be less trustworthy than any foreign government; for sure they have fewer principles and less moral guidance.
There is no shortage of examples of US companies buying all competitors in a market and shutting them down to kill the brands, then giving foreign consumers a choice of "American or nothing". How is this better than China buying a copper mine? Because they're 'democratic'? Because they follow 'free market principles'?
George Soros would be happy to pump several hundreds of billions into the currency of Brazil or China, create a few bubbles while driving up the currency, and then get out with a massive profit and leave behind a devastated local economy. Why is this more defensible than China buying a copper mine? Because Soros is 'democratic'? Because he believes in 'a free market'?
There is no shortage of examples anywhere of multinationals committing economic atrocities just for the sake of more profit - and these firms were neither yellow nor communist. And there is no shortage of examples of multinationals committing crimes against humanity either; do some research on Nestle and baby milk powder in Africa - countless tens of thousands of babies died, from an unforgivably cynical and ruthless pursuit of profit. Do we forgive that because they're "white, democratic and believe in a free market."?
We have bigger problems in the world than a Chinese firm looking for supplies of raw materials.
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