Is China Buying the World?
-
- $28.99
-
- $28.99
Publisher Description
China has become the world's second biggest economy and its largest exporter. It possesses the world's largest foreign exchange reserves and has 29 companies in the FT 500 list of the world's largest companies. ‘China's Rise' preoccupies the global media, which regularly carry articles suggesting that it is using its financial resources to ‘buy the world'.
Is there any truth to this idea? Or is this just scaremongering by Western commentators who have little interest in a balanced presentation of China's role in the global political economy?
In this short book Peter Nolan - one of the leading international experts on China and the global economy - probes behind the media rhetoric and shows that the idea that China is buying the world is a myth. Since the 1970s the global business revolution has resulted in an unprecedented degree of industrial concentration. Giant firms from high income countries with leading technologies and brands have greatly increased their investments in developing countries, with China at the forefront. Multinational companies account for over two-thirds of China's high technology output and over ninety percent of its high technology exports. Global firms are deep inside the Chinese business system and are pressing China hard to be permitted to increase their presence without restraints.
By contrast, Chinese firms have a negligible presence in the high-income countries - in other words, we are ‘inside them' but they are not yet ‘inside us'. China's 70-odd ‘national champion' firms are protected by the government through state ownership and other support measures. They are in industries such as banking, metals, mining, oil, power, construction, transport, and telecommunications, which tend to make use of high technology products rather than produce these products themselves. Their growth has been based on the rapidly growing home market. China has been unsuccessful so far in its efforts to nurture a group of globally competitive firms with leading global technologies and brands. Whether it will be successful in the future is an open question.
This balanced analysis replaces rhetoric with evidence and argument. It provides a much-needed perspective on current debates about China's growing power and it will contribute to a constructive dialogue between China and the West.
PUBLISHERS WEEKLY
In this informed review of international business patterns, Nolan (Integrating China: Towards the Coordinated Market Economy), a professor of Chinese economy at the University of Cambridge, answers the title's rhetorical question in the negative. As Nolan notes, the ascendancy of multinational corporations stemming from the liberalization of international trade since the 1970s has made allegiance to "home" countries a polite fiction in the global market. While multinationals seek access to the markets of developing nations, Nolan clarifies that foreign direct investment in other regions exceeds that in China. Although China's immense foreign-exchange reserves, the largest of any nation, fuels apprehension in the West, this issue should be seen in context the holdings of Western asset fund managers overshadow them. Unfortunately, Nolan slights some important considerations: for example, he acknowledges Beijing's historic determination to build "a group of globally competitive giant firms to match those from the high-income countries," but leaves largely unexplored the implications of the advantages these companies can derive from the state's "majority equity share" and "high investment rate." He also skirts the contentious issues of forced technology transfer, counterfeiting Western products for export, and displacing overseas labor with low-cost Chinese workers. Overall, Nolan provides an important perspective that challenges popular conceptions; no volume of this size can do more.
