This week's Economist magazine's headlining articles and cover-page, 'Buying up the world- The coming wave of Chinese takeovers' highlight the process and nature of foreign takeovers by Chinese firms. The piece offers surprisingly little discussion or speculation as to China's deeper motivations and timing in its recent takeover bids for large multinational companies, or as to the reasoning of other governments and critics who would resist the emerging trend before concluding that rejecting China's advances would "be a disservice to future generations."
There is something absurd about the reasoning in these articles, which do point out the "opaque and arbitrary" nature of authority within large Chinese companies, and which do briefly note that takeover bids are most often made on companies working in strategic resource sectors; but which base their conclusions on speculation that Chinese firms will "bring new energy and capital to flagging companies around the world," that "Chinese companies will have to adapt" and that its investments in the global economy will help to make China's interests "increasingly aligned with the rest of the world's." That the Economist can readily admit to not understanding the motivations and interests of "opaque" Chinese government and authority but then predict its evolution is a failure of logic and a cause for concern should policy makers around the world find agreement with this thesis.
A steady accumulation of bonds and hard currency in all denominations, especially of its largest rivals in the US and Euro-zone, coupled with a well timed and targeted increase in the rate of takeover of global means of production and access to raw materials represents an obvious, well planned, forward looking and ongoing effort to supplant Western hegemony in favor of an ill-defined future global order over which a preeminent China presides.
This is the Chinese mission according to Chinese leaders and state-owned news outlets, as discussed in a 2008 CSIS report which states among other things: "The PRC-owned Hong Kong daily Wen Wei Po opined that the elevation of the “harmonious world” theory in the congress work report indicates that Hu (Jintao) is “assuming an even more important role in international affairs that is, as ‘formulator, participant and defender of world order,’ in order push the entire world toward harmony.” Other such thinking among leading Chinese thinkers is evident in Zhao Tingyang’s The Tianxia System: The Philosophy for the World Institution (2005) and Liu Mingfu’s book The China Dream: Great Power Thinking and Strategic Positioning of China in the Post-American Age (2010). All of these sources are united in their assumption that a Chinese eclipse of Western economic power is inevitable, though they may differ on their view of that post-ecliptic world. Without knowing the truth about China's aims, the West should be wary of allowing a monolithic foreign government access to its strategic resources and internal economies.
The Economist article gives further evidence that China's entry into global capitalism is not motivated by the usual basic greed and desires of Western investors when it reports that "Natural-resources firms can become captive suppliers to China, rather than selling on the open market... Westerners realised their new objective was to maximise production, not profits" and "Chinese firms... risk political fallout if they fail. Their sense of mission makes them 'transparent', says one European executive." That China's is a long term view is undeniable in the context that they would forgo immediate profit by selling to the highest bid on the market in favor of repatriating newly exploited resources.
Western economic domination of the world reached its zenith in the 20th century, when according to this weeks Economist articles "Britain owned 45% of the world's FDI (Foreign Direct Investment) in 1914; America's share peaked at 50% in 1967." It is undeniable that, in competition and in concert, Western powers used their public institutions and militaries to further their economic-imperial goals, making the 20th century the bloodiest and most warlike known to history. Entire continents were subjugated and looted in the pursuit of profit and 'civilisation',- including China, and large parts of Central and South America, Asia and Africa remain captive to the national and corporate institutions which have inherited that legacy. While the West so often points out China's human rights abuses and excesses of power, the Chinese are always quick to point out the hypocrisy of such criticisms, as it did in its recent report on the US's human rights record published in the China-daily; a startling and credible list of very recent abuses. If there are any worries among people in the West as to the waning of Western power in favor of Chinese influence, it should perhaps not be in lament of a lost golden age of economic and military triumph, but in fear that the emerging power in China, accountable to no one and secretive in their aims and motivations, will as it hijacks a global economic system which promotes greed and consolidation of power, look upon and treat the West in the same manner that the West has China and the rest of the world.
Read the Economist reports and other related articles here:
The Economist:
http://www.economist.com/node/17463473
http://www.economist.com/node/17460954
Regarding Chinese policy and statements about US human rights abuses:
http://csis.org/files/media/csis/pubs/080129_murphydecoding.pdf
http://www.chinadaily.com.cn/china/2010-03/12/content_9582218.htm
Regarding takeovers:
http://news.bbc.co.uk/2/hi/7967604.stm
http://www.cbc.ca/money/story/2010/11/03/potash-ottawa-review.html
http://www.thetrumpet.com/?q=6336.4792.0.0
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