Thomas P.M. Barnett :: Weblog

ARTICLE: “A British Classic In the Chinese Stable: The MG Roadster Becomes a Trophy Of a Restless Economy,” by Craig S. Smith, New York Times, 13 March 2007, p. C1.

The title of this piece is rather goofy.

How come whenever our companies buy something overseas, we call it an “investment,” but when rising economies buy something that once belonged to us, we dub it a “trophy”?

Bit egotistical, don’t ya think!

There’s no way China can sit on a trillion USD in reserves when something like 800 million of their people are barely scraping up an existence. It’s only natural that they’d diversify their holdings from super-safe T bills. They’ve got serious needs that they can fund themselves, without our development aid. Shouldn’t we be happy with that, especially when we’re talking something like one out of every eight people on the planet?

As for the buying up of foreign companies, that’s just what rising powers do. They can’t buy anything we don’t want to sell, and in the vast majority of these instances, the Chinese will pick up companies they desperately need in terms of development (like those in energy and infrastructure in general) plus the bargains like MG (is it better for MG to die or be reborn with a scrappy new boss?).

China’s government is now encouraging outbound FDI, which only increases the economy’s dense financial connectivity with the outside world, subjecting Beijing to more and more rules. It’s a totally natural progression, threatening only poorly run companies, who, quite frankly, should be devoured by somebody rather than linger and bring our economy down--however tangentially.

China’s playing up. We can look down in fear, or we can look up ourselves and get on with it.

Fear is always the choice of the lazy.

Jobs aren’t eternal. Talent is.