Posted on 07/01/2005 7:24:55 PM PDT by Sandreckoner
China throws down gauntlet to USA Inc
Frank Kane Sunday June 26, 2005 The Observer
If you want to understand the global economy and feel the pulse of capitalism in the early 21st century, look no further than the $19 billion bid by the China National Oil Operating Company - Cnooc - for Unocal of California. Add a large measure of geopolitical tension, and you have probably the single most important corporate event of the young millennium. The offer - which Cnooc's president Fu Chengyu and his team have been considering ever since rival US oil giant Chevron agreed a takeover of Unocal for $16.5 billion - encapsulates the growing business confidence of China, the land of totalitarian capitalism. Its dynamic economy needs raw materials if it is to continue the eye-watering growth rates of the past few years. Chinese demand has already helped push up global commodity prices, including oil. Now Beijing wants to own the means of production, too. A middle-ranking American oil company will do nicely.
American nerves are already frazzled by the rate at which China is catching it up as the world's biggest economic power. There have been takeovers by Chinese groups of such pillars of US capitalism as IBM's PC business and Hoover. These are serious brands - but not in the same league as an oil company with real, strategically significant assets. West coast senators are already beginning to lobby the President, who must be worried by the prospect of Chinese ownership of a quintessentially American business. (When Japan bought up a chunk of USA Inc in the Eighties, it was regarded as a corporate Pearl Harbour.) Throw in the spat over Chinese textile exports to the US and Europe, which will be the centre of bitter recriminations at the next meeting of the World Trade Organisation, and the import of the Cnooc bid looms even larger.
Americans will not admit it, but they are almost impotent in the face of Chinese financial firepower. The Cnooc bid is in cash, backed by the near-limitless resources of the Chinese state, and in a country like the US, which has always lived by the epigram 'cash is king', it looks hard to beat. Chevron would certainly struggle to match it. That is why the political lobby is already rolling, with much muttering about the 'national security' implications of the proposed deal.
(Notice, however, that such patriotic concerns do not extend to Wall Street. Goldman Sachs and JP Morgan, perhaps the finest names on the Street of Dreams, are advising the Chinese. Morgan Stanley is waving the flag for Unocal, but its fate will probably be decided by the mainly American hedge funds that dominate its share register. The business of America, it seems, is not business, but finance.)
And - to seal American paranoia - China is also a major holder of US debt. Put simply, the US is in hock to the Chinese to such an extent that if all the bills were called in at once, Uncle Sam would be bust. It's not in China's interests to destabilise the world economy at the moment, but circumstances change. Beijing might just like to keep that card - a financial nuclear option - up its sleeve for some future geopolitical crisis.
Corporate America will climb a traumatic learning curve over this bid, and be forced to confront the growing reality of Chinese economic power. For business people elsewhere, the lesson is far simpler: learn Mandarin - now.
The glee is almost palpable. The article itself is largely hogwash, but it illustrates the attitudes - even hopes - of many in Europe, and is a timely reminder of the sort of mindset we're increasingly facing outside our borders.
Uh Huh... Just like Japan was supposed to dominate the world according to the pundits back in the 1980s.
Our per capita GDP is around 40k, China's is around 10k. They've still got a long, long way to go to catch us.
If China continues on the course it is on, there will be a civil war over human rights within China by 2020. It will turn into a horrific World War. Eventually the commies will lose, but not until 50 million perish.
First, Mr. Kane needs to do some research and find out how many different languages are spoken in China, which is an indication that China is not really a nation at all but something along the lines of the Holy Roman Empire. Second, Mr. Kane should understand that given the empire-like nature of China, there is an irreconcible tension between what the Chicoms needs to do in order to become an economic power (i.e. increase economic liberty) and what they need to do in order to keep their empire together (i.e. suppress political liberty).
You should see their keyboards for computers and typewriters. Absolutely ridiculous.
I tend to discount anything written by "economists" and "economic experts" because if they were all so prescient, none of them would have to work for a living and we'd never hear anything from them.
One thing all of these folks tend to forget: the Chinese Commuinist government merely allowed people to have the illusion of economic freedom in the hopes of avoiding a Soviet-style meltdown. The idea is that if people are seduced by material wealth, they will forget they have political rights, and the party will remain in power.
What they are discounting is human nature ("There is no such thing as human nature" -- Chairman Mao). Once people begin to accumulate wealth and property, they tend to expect (and fight for) political rights in order to safeguard that wealth and property. The two (economic and individual rights) cannot be seperated.
Now, of course, the Commies expect this sort of thing to happen in a vacuum, that they will be able to keep the lid on the whole thing, which is a fallacy. In the modern world, it is now easier to communicate than ever before. With the introduction of the PC,internet, cell phones, blackberries, cable and satellite television, the ability to begin and sustain a mass movement of like-minded individuals now truly exists for the first time in history.
The communist government cannot keep the lid on things this time like they did in Tianemmen Square.
Anyone who will stand up for individual rights in China is now capable of reaching a larger audience than ever before. It is now easier to broadcast that message not only across China, but around the planet than ever before. The ability to foment and disseminate anti-government information grows by leaps and bounds on an almost daily basis. The ability to co-ordinate information and communications grows just as rapidly.
I feel sorry for the Commies when a sizable number of their wage slaves wake up and realize just what kind of power they actually possess.
And when that happens we can stop talking about China the economic powerhouse.
China could sacrifice a billion people in war and still come out on top. Any confrontation might evolve into a nuclear exchange...
They play with fake money.
Until it is truly valued and not artificially pinned to our dollar, most wise investors would steer clear of investing.
LOL It is tonal as well. I learned one tone based language but it has a phonetic, if convoluted, alphabet. I haven't enough years to devote to another. What one other poster writes about the vast number of "minority" languages in China is relevant.
You may, in fact, have to be a genius to learn Chinese but something on a higher plane to solve the keyboard and programing problems in a simple manner.
Well, from what I've heard about CAFTA, recently passed by the Senate, we'd better brush up on our Spanish. Thank God, it will not receive a friendly welcome in The House.
Mandarin should be easy if a billion children can do it.
Why would we give up a superior language with far greater linguistic resources (English) in favor of a clearly inferior, backwards, undeveloped language, whose vocabulary is barely 1/100th that of English? That would be like asking someone to trade in a Rolls Royce for a rickshaw.
I want to learn great war now. I don't want to kowtow. I want to defeat the East.
"Americans will not admit it, but they are almost impotent in the face of Japanese financial firepower. The Mitsubishi Estate bid is in cash, backed by the near-limitless resources of the Japanese state, and in a country like the US, which has always lived by the epigram 'cash is king', it looks hard to beat. Grubb and Ellis would certainly struggle to match it. That is why the political lobby is already rolling, with much muttering about the 'national security' implications of the proposed deal. (Notice, however, that such patriotic concerns do not extend to Wall Street. Goldman Sachs and JP Morgan, perhaps the finest names on the Street of Dreams, are advising the Japanese. Morgan Stanley is waving the flag for Rockefeller Center, but its fate will probably be decided by the mainly American hedge funds that dominate its share register. The business of America, it seems, is not business, but finance.) And - to seal American paranoia - Japan is also a major holder of US debt. Put simply, the US is in hock to the Japanese to such an extent that if all the bills were called in at once, Uncle Sam would be bust. It's not in Japan's interests to destabilise the world economy at the moment, but circumstances change. Tokyo might just like to keep that card - a financial nuclear option - up its sleeve for some future geopolitical crisis. Corporate America will climb a traumatic learning curve over this bid, and be forced to confront the growing reality of Japanese economic power. For business people elsewhere, the lesson is far simpler: learn Japanese - now. "
Read "Sun Tzu". That will be more than enough to know.
"I tend to discount anything written by "economists" and "economic experts" because if they were all so prescient, none of them would have to work for a living and we'd never hear anything from them."
Actually, the thing that's disturbing to me is that _economists_ rarely write this sort of thing, and the "economic experts" -- at least those whose opinions grace magazines, newspapers and even television -- are rarely _economists_. They are often, like Mr. Kane, business or finance types, but those are not economists. What actual _economists_ say is usually ignored outright, or at least rarely gets any publicity.
Mr. Kane, by the way, has degrees in "politics and history" and "Irish history."
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