LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
June 25, 2005 Saturday
London Edition 1
SECTION: LEADER; Pg. 12
LENGTH: 585 words
HEADLINE: Rich and popular: here comes China: Why hostile bids may paradoxically be good for peace
BODY:
China has come a long way since wistful 19th-century English industrialists considered its vast population and expressed the hope that every Chinese would add an inch to their shirt-tails to keep the textile mills of Lancashire busy for another generation.
Already, China is a factory for the world, making its own shirts and the shirts of others, as well as their trousers, televisions and dining room tables. It is now clear that impatient Chinese chief executives, including those in charge of state-run companies, feel ready for the next step. They want not only to export but also to invest abroad, emulating the international expansion of Japan in the 1980s.
CNOOC's Dollars 19.6bn (Pounds 10.7bn) bid this week for Unocal, Haier's Dollars 1.28bn approach to Maytag and Lenovo's Dollars 1.75bn acquisition last month of IBM's personal computer business are proof that Chinese corporations intend to buy companies that help produce the world's oil, assemble its PCs and manufacture its washing machines. Cars and microchips may follow.
The CNOOC bid coincided with evidence that China - still nominally communist but more openly capitalist by the year - wields increasing diplomatic influence as well as economic power. According to the 16-nation global attitudes survey by the Pew Research Center in Washington, China is now more popular than the US, in spite of concern about China's industrial strength and the resulting job losses among its rivals. Of the seven European countries surveyed, only Poland favoured the US over China.
This rise of China is both inevitable and desirable. Granted, it is surprising that Chinese companies have launched their international forays at such an early stage in the country's economic development; unlike their Japanese counterparts of 20 years ago, they lack technology, management skills and well-known brands. But the circumstances are different. Chinese companies venture abroad partly because their domestic market, open to investment by multinationals, is painfully competitive. And the country is swimming in surplus cash. There is no reason why China should hoard US treasury bills when it can vary its diet by purchasing equity in US companies.
Although the recent bids only mark the start of China's international ambitions - it may not be long before a large European company is in the firing line - there is no reason for China to be complacent or for the rest of the world to be particularly alarmed.
Chinese executives have succeeded in buying foreign assets, but there is scant evidence so far that they are any better than Europeans or Americans at making a profit out of them. Even if CNOOC overcomes US political objections and outbids Chevron to buy Unocal, the Chinese state company may struggle to absorb the alien culture of a US private sector enterprise.
Nor should the latest Pew Research survey be misinterpreted. Even among those who dislike George W. Bush, US president, few people would seriously place more trust in the People's Liberation Army than the US armed forces. It is just that the US uses its military might, while China has neither developed such power nor yet shown a desire to deploy it overseas.
Chinese leaders say they are trying to engineer a "peaceful rise". Whether they are sincere or not, the rapid integration of China into the global economy makes that aspiration more plausible and a Sino-US conflict less likely. Every Chinese takeover of a US company should be seen as a building block for peace in the Asia-Pacific.
LOAD-DATE: June 24, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
June 25, 2005 Saturday
London Edition 1
SECTION: LEADER; Pg. 12
LENGTH: 585 words
HEADLINE: Rich and popular: here comes China: Why hostile bids may paradoxically be good for peace
BODY:
China has come a long way since wistful 19th-century English industrialists considered its vast population and expressed the hope that every Chinese would add an inch to their shirt-tails to keep the textile mills of Lancashire busy for another generation.
Already, China is a factory for the world, making its own shirts and the shirts of others, as well as their trousers, televisions and dining room tables. It is now clear that impatient Chinese chief executives, including those in charge of state-run companies, feel ready for the next step. They want not only to export but also to invest abroad, emulating the international expansion of Japan in the 1980s.
CNOOC's Dollars 19.6bn (Pounds 10.7bn) bid this week for Unocal, Haier's Dollars 1.28bn approach to Maytag and Lenovo's Dollars 1.75bn acquisition last month of IBM's personal computer business are proof that Chinese corporations intend to buy companies that help produce the world's oil, assemble its PCs and manufacture its washing machines. Cars and microchips may follow.
The CNOOC bid coincided with evidence that China - still nominally communist but more openly capitalist by the year - wields increasing diplomatic influence as well as economic power. According to the 16-nation global attitudes survey by the Pew Research Center in Washington, China is now more popular than the US, in spite of concern about China's industrial strength and the resulting job losses among its rivals. Of the seven European countries surveyed, only Poland favoured the US over China.
This rise of China is both inevitable and desirable. Granted, it is surprising that Chinese companies have launched their international forays at such an early stage in the country's economic development; unlike their Japanese counterparts of 20 years ago, they lack technology, management skills and well-known brands. But the circumstances are different. Chinese companies venture abroad partly because their domestic market, open to investment by multinationals, is painfully competitive. And the country is swimming in surplus cash. There is no reason why China should hoard US treasury bills when it can vary its diet by purchasing equity in US companies.
Although the recent bids only mark the start of China's international ambitions - it may not be long before a large European company is in the firing line - there is no reason for China to be complacent or for the rest of the world to be particularly alarmed.
Chinese executives have succeeded in buying foreign assets, but there is scant evidence so far that they are any better than Europeans or Americans at making a profit out of them. Even if CNOOC overcomes US political objections and outbids Chevron to buy Unocal, the Chinese state company may struggle to absorb the alien culture of a US private sector enterprise.
Nor should the latest Pew Research survey be misinterpreted. Even among those who dislike George W. Bush, US president, few people would seriously place more trust in the People's Liberation Army than the US armed forces. It is just that the US uses its military might, while China has neither developed such power nor yet shown a desire to deploy it overseas.
Chinese leaders say they are trying to engineer a "peaceful rise". Whether they are sincere or not, the rapid integration of China into the global economy makes that aspiration more plausible and a Sino-US conflict less likely. Every Chinese takeover of a US company should be seen as a building block for peace in the Asia-Pacific.
LOAD-DATE: June 24, 2005
posted by Eastlaw at 8:46 AM
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