Is China Buying the World - Book Report/Review Example

Is China buying the world? Overview of the topic China’s economy is becoming one of the strongest economies of the world. When the rest of the world is facing recession and austerity China’s economy is continuously developing. The country is pursuing a soft but unstoppable ways of economic domination. China always encourages the domestic firms for domestic and institutional investment in potential foreign markets financial and regulatory support. The country is turning into a challenging nation to the developing and the developed world. China’s economy is becoming strengthened from the past three decades. A perception has become popular that China is purchasing everything of the world under the sun like companies, minerals, real estate, treasury bonds etc. This makes china flooded with high national reserves from foreign, cheap manufactures. If this continues with rapid growth, China might become the wealthier nation of the world. In the last few years, 103 international investments resulting more than $100 million is made by some state owned Chinese companies in the past six years. Many countless small investments are also made by the Chinese. In 2006 Sinopec, one of the major petroleum company of china joined Russia’s Rosneft in a bid for TNK –BP’s oil. Another big investment of Sinopec is it acquired 37.5% stake in an oil company of Saudi Arabia. This is the largest step taken by chi9na to secure and ensure china in the matter of oil. In December 2008 china National Corporation and International Petroleum Investment signed the contract for Abu Dhabi crude oil pipeline project. CNPC also acquired a Canadian company which was under performing in Kazakhstan. This is one of the successful overseas acquisitions of a Chinese company 1. Author’s claim In the book “Is China Buying the World?”, the author Peter Nolan throws light on the fact that China is purchasing the world which is resulting in a fearful reaction to many countries of the world mainly USA. The words used in the name of the book “buying the world” define the increasing wealth and buying power of china. In the book Nolan described that how china has made a shift in its economic growth and the attempts to change its ways of integrating the global economy. The author also mentioned about the challenges china has faced or is face for developing its economy and country. This book shows that the two multifaceted parallel universes. One is the high income countries highly enriched which is the host of world’s largest multinational firms versus fast developing china. The author gives information that in the recent decades three revolutions happened. These are technological, financial and business structural revolution. For all these revolution an unprecedented synergy is created which has turned empowerment in industrial measures. The countries having high income have everything, therefore, it became easy for them to bring more competition in the market from all corners of the world. On the other hand, China from 1980s is showing its growth, scope and speed. It created a large, vibrant and open economy within one generation. According to Nolan china so far has done either qualitatively or quantitatively riding on the economies of high income in the matter of technology upgrading, capital investment and commodity exports. So, now the platform is ready for China. The new global system dynamically produced global winners in the new capitalist global system (Nolan). The author gives the opinion that the secret of the growth and formation of the new type of systems integrators and multi-national industrial majors lies in the old principle of market shares, demand and supply. With the rise of the purchasing power of the middle class society, the demand horizon has stretched outward. Business mergers and acquisitions are seen in a massive way. Companies is using better technology is for maximizing the productivity. For the economic development of China it has become a major player in the race but the other high income countries having industrial majors are also struggling in the competition despite of their present economic downturn (Nolan). 2. Author’s suggestion According to Nolan “systems integrator firms” are the companies which produce final product like automobile. This becomes most recognizable and more visible in market and has the best technology. The development of this firm has compelled the suppliers to integrate their operations more fully with those firms. Slowly by this supplier firms become large global firms of their own and enter into the industry competing those big firms. As a result more control is exerted on the suppliers firms by the system integrators firm. Management of system integrators firm controls the suppliers’ action. It worsens the ownership and control. Most of these big firms have major presence in rich nations and developing countries. There is a large set of industrial firms in China which will be strong competitor the worlds market in the keys sectors like autos and truck, telecoms, banking & finance etc. Earlier in china the small medium companies engaged in direct marketing activities. By late 90s the small medium firms were released from state control and they started making huge contribution to the economic growth. Presently the state keeps control on larger companies. They prevent other countries expansion into china by forming rules on merger and acquisition. China is having a rapid growth in its GDP but it remains as a developing country. It does not have huge natural resources. Therefore, it has to import resources from Latin America and Africa. This results in the import of Chinese goods in these regions. China has been stymied in oil in a large extent. More than 90% of the world oil and gas is controlled by National Oil Companies that produce 75% of the output. The reserves of European and American oil companies are smaller than those of NOC but they are bigger than the oil reserves of China. The great deal of technical expertise of the Western countries makes them as the first choice NOC for becoming their partner. China is now attempting to acquire more oil reserves for ensuring their own security for energy. 3. Strategic direction by the Author In the concluding part the author points out that on financial service the Global firms mainly depends on. With the growth & development of the other sectors the financial sectors also grows. Therefore, banks get a huge power by which they can push the government for deregulating its activities. Unlike the banks of other rice countries the Chinese bank doesn’t have that connection with the system integrator firms which banks of other big nations have. China faces political barriers for expansion in overseas. So, only few Chinese banks have been able to establish abroad. Banks depends heavily on it. With no exception Chinese bank also do the same. The author aims to explain the ways & method China used for past years to develop its software and hardware system but presently the market for servers is dominated by IBM & HP in Chinese bank. These are the giant companies of US which occupies 90% of the market share. So, these firms integrate deeply in the strategy of the financial sector of china. In this book a good number of current information is available with clear explanations. This book aimed at asking the question regarding china buying the world in a most straight way based of the facts and figures. The author provides statistical summary in this book which aims in giving an advantage in dealing with questions emotionally charged with a touch on national rivalries. This book can benefit to the advance scholars and undergraduate. 4. Evaluation / Criticism This is a very well researched book. The author selected a highly debated issue for this book and presented in a very balanced way, supporting his words with appropriate and authentic data. The arguments in this book are precise and clear. The recent economic growth of china is acknowledged but also focuses on the entrenched position of the industries of economically developed country. Major operators of the world, supply chain, system integrator are well explained by Nolan. The book also offers a number of well needed visions on China’s operations, expansions, reach and its results. It highlights that china has a symbiotic relationship with the Western countries. Both side arguments presents on Chin’s economy are very interesting with relevant statistical data not any hypothesis. The author gives a descriptive and highly informative analysis on china’s economic potential and positions. With a clear idea about the subject the author ignored literacy gimmicks. Author also shows that china may become the world’s largest reserve of foreign exchanges but this may not lead to global dominance. The complexity of the global economy is explained well in this book. The book has a rich set of data within it. International development and social sciences are highlighted in a very simple way. The book throws light on the major aspects of the economy and describes the current position of china and other big nations of the world who have immense economic power. The growth of china in different aspect especially in economy is well described here with the support of statistical data describing the present scenario. The major players in the world industry and their relationship with china are written in a very balanced way. Main attraction of this book is its clear information, analysis of that information’s in a concise way. The word buying the world is defined in such a beautiful way that it explains each and every aspect of china’s economy, its growth, and its impact on the other nations. The recent mergers, acquisitions, tie up are given in here. The reader will get a vast social and international knowledge after reading this short book. The books gives information on the major economic rise in china in the recent world and why most of the countries are threaten of the power of china. Many international issues are highlighted to explain the effect relation of china and the global economy which will help the reader to become aware if these global incidents. Reader can get to know the about the largest companies of china which has now become world famous. The global media is preoccupied by China Rise which regularly gives articles on buying the world by using its financial resources. All this information makes this book a successful one. References Nolan, Peter., 2013. Is China buying the World?. Cambridge. John Wiley & Sons. Nolan, Peter., 2004. Transforming China: globalization, transition and development (China in the 21st Century). London: Anthem Press. Read More