China has become the world′s second biggest economy and its largestexporter. It possesses the world′s largest foreign exchangereserves and has 29 companies in the FT 500 list of the world′slargest companies. China′s Rise′ preoccupies the globalmedia, which regularly carry articles suggesting that it is usingits financial resources to buy the world′.
Is there any truth to this idea? Or is this just scaremongeringby Western commentators who have little interest in a balancedpresentation of China′s role in the global political economy?
In this short book Peter Nolan – one of the leadinginternational experts on China and the global economy – probesbehind the media rhetoric and shows that the idea that China isbuying the world is a myth. Since the 1970s the global businessrevolution has resulted in an unprecedented degree of industrialconcentration. Giant firms from high income countries with leadingtechnologies and brands have greatly increased their investments indeveloping countries, with China at the forefront. Multinationalcompanies account for over two–thirds of China′s high technologyoutput and over ninety percent of its high technology exports.Global firms are deep inside the Chinese business system and arepressing China hard to be permitted to increase their presencewithout restraints.
By contrast, Chinese firms have a negligible presence in thehigh–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 governmentthrough state ownership and other support measures. They are inindustries such as banking, metals, mining, oil, power,construction, transport, and telecommunications, which tend to makeuse of high technology products rather than produce these productsthemselves. Their growth has been based on the rapidly growing homemarket. China has been unsuccessful so far in its efforts tonurture a group of globally competitive firms with leading globaltechnologies and brands. Whether it will be successful in thefuture is an open question.
This balanced analysis replaces rhetoric with evidence andargument. It provides a much–needed perspective on current debatesabout China′s growing power and it will contribute to aconstructive dialogue between China and the West.