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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (517)	6/24/2005 12:57:55 AM
From: Wharf Rat	Respond to of 24210

"Many Chinese companies have grown to such a size that it is a strategic imperative to establish themselves in the home counties of their competition." Q&A: The roaring dragon Don Sull, an Associate Professor at the London Businesses School and author of a book on the economic rise of China, talks to Times Online about the CNOOC’s offer for Unocal and the growing purchasing power of Chinese businesses. Interview by Andrew Ellson Why is CNOOC making a bid for Unocal? This offer is part of a broader trend of Chinese companies building beachheads in foreign markets after establishing themselves in their fast-growing domestic market. These companies are cash-rich and global capital markets are willing to back them. Given the pace that China is getting though oil, it is no surprise that it would be more comfortable with access to larger reserves. Why are Chinese companies increasingly looking to purchase internationally? At a certain scale, companies have to think about competing globally, particularly in industries such as oil and technology where there are large fixed costs such as exploration and research and development. Many Chinese companies have grown to such a size that it is a strategic imperative to establish themselves in the home counties of their competition. Two members of Congress have appealed to President George W. Bush to review the CNOOC/Unocal deal citing possible security implications. Are we likely to see increasing resistance to Chinese companies buying American businesses? Oil is like food in that it is very emotional for politicians and people. They do not like to be dependent on external sources for these products. Many people are surprised at how quickly China has become a critical part of the global economy and are still grappling with the political and economic implications and how to deal with them. Why are many Republican politicians, previously among the fiercest advocates of free trade, suggesting protectionist measures to counter the growth of China? In representative democracies like the US and UK, where interest groups have political power, there is always going to be a gap between rhetoric and reality on issues such as free trade. Many Congressmen and Senators may have strong ideological preferences for free trade but if the jobs of their constituents are affected these politicians leave themselves open to criticism and replacement by their opponents. When you are dealing with the rise of an economic superpower, you will find competing views and different perspectives that will pull the Government in opposite directions. Don Sull is the author of Made in China: What Western managers can learn from trailblazing Chinese entrepreneurs business.timesonline.co.uk