A SUDDEN spike in China’s investments abroad is a harbinger of momentous changes in global fund flows that could eventually transform the Asian giant into a major source of capital, analysts say. China, long one of the world’s top investment destinations, issued surprise figures last week showing that its outbound investments more than doubled in 2005. And that, economists said, might just be the start.
“By 2010, China will emerge as a major global foreign direct investment source,” Jiang Xiaojuan, a Chinese Academy of Social Sciences professor, wrote in a recent article in the China Economist.
The sharp increase was driven partly by mergers and acquisitions, which accounted for half of last year’s outbound direct investment flows, according to the China Daily . This reflects a penchant among Chinese businesspeople for buying existing companies rather than starting new ones.
Many argue it makes more sense to buy operations with a proven track record, tested management methods, and perhaps even a valuable brand.
Taking over a company with established drilling or mining rights may also be the easiest way to get ahold of coveted energy and raw materials.
The increasing value of the Chinese yuan is one of the main reasons for the sharp rise in China biz acquiring foreign assets. Our government is pressing for more and similar increases. Should help us a lot.
Whoever “us” is?
The scary thing is how they’ve been able to purchase hundreds of corporations in the U.S. straight CA$H just during this past year. Better have the kids start learning Chinese/Mandarin and Spanish! now!
I often wonder, when reactionists posts messages like #1, do they not realize the same thing was said twenty years ago about Japan?
As for the investment abroad, I say “great”. It’s not democracies that don’t go to war, but capitalist nations. There’s too much money to lose.
This sounds like a good thing – it’s keeping the dollars moving. I was getting worried that sooner or later they’d be tired of trading material goods for little green pieces of paper (or electronic blips.) Now they are actually doing something with it…
guess I should have learned japaneese 20 yrs ago then, eh #2?
All of these comments about language. In so many post on so many stories. How do you think it is possible that so many people can communicate with English speaking people. Chinese people learn to speak English just as Japanese people did before them. Thanks to the U.S. and it’s gigantic economy many people’s from many nations realized the need to learn to speak English. I wonder if they have conversations about “having” to learn English. The assumption is that learning another language is like being sentenced to death. The Ironice thing is this talk invariably comes from ancestors of people who forced others to speak there language. Everyone does not act the same way so expecting them to makes little or no sense.
” It’s not democracies that don’t go to war, but capitalist nations. There’s too much money to lose.”. I agree with you on this Mr. Hill. I will stipulate that the capatalism must be true free market capatalism. When it is operated with government protectionist intervention where subsudies and trade limiting laws from those on the left and on the right so as they cannot lose money the whole things fall apart.
John
#2It’s not democracies that don’t go to war, but capitalist nations. There’s too much money to lose.
Comment by James Hill — 9/11/2006 @ 11:07 am
I disagree wholeheartedly. Especially since I live in this capitalist nation that is at war, again.
We learned a few very important lessons from WWII and heard a very critical warning from Dwight D Eisenhower… And chose to see war as a revenue stream. There is nothing but profit in war. Boeing, Haliburton, McDonnel/Douglas, and many more. Capitalism allows for privatization, which is almost always a bad thing too. Now we outsource the fighting to third parties. We have mercenaries in Iraq, firing weapons at civilians while running escort missions for supply convoys.
Plenty of Americans are profiteering off this war. But that okay, because American policies have also created a vast cannon fodder class so we have a steady supply of bodies to throw at the war too.
You can pretend we are only acting in defense, fighting for democracy, protecting American values, but that is all bullshit. We attacked Iraq outright and without provocation, for the second time. There is a just war to be fought in Afganistan, but we are going to lose there since we aren’t committed to it in any meaningful way.
Of course, victory is not relevant in this sort of fighting. Win or lose, our tax dollars still line corporate coffers who sell the machinery of war.
Frankly, I want my money back.