China Investing Globally Essay Sample
- Pages: 3
- Word count: 740
- Rewriting Possibility: 99% (excellent)
- Category: china
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Introduction of TOPIC
After amassing a great vast of financial reserves on its export-led growth economy, China is now conducting an intensive investment campaign around the globe. And what perfect time for it to launch its current investment spree during which major economies from the North are in the brink of a financial crisis that precipitates in countries of developing regions. China is thus consciously or unconsciously presenting itself as a champion in helping the economies of developing countries in dire need while at the same time posts as a threat to the economies of dominant countries like the United States.
China’s investment scheme seems to follow two strategic trends. First is that most of its investment projects concentrate on resource extraction particularly oil and minerals. Secondly, China’s dynamic campaign focuses on forging bilateral relations with developing regions such as Southeast Asia, Africa, and Latin America.
For the former, China’s total oil investments in February of 2009 alone amounted to $41 billion. (Barboza, 2009) The leading countries to which it has made oil investments include Russia and Valenzuela. Valenzuela’s commitment to boost oil exports to China will greatly enhance the country’s oil supply but creates a direct threat to the US considering that Valenzuela is one of its nearest and cheapest oil supplier. A cut of oil exports from the country will increase the US reliance on Middle Eastern oil which has dire security consequences. (Kurlantzick, J. 2006).
Chinese companies are also starting
to enter the mining industry by actively pursuing investments in major companies in the industry.
China’s strategic investment on natural resources will not only ensure its steady supply to fuel their growing economy for the future but can serve as a buffer when supplies tighten considering that these depleting resources are non renewable or during an economic boom once after the world successfully endures the extant recession.
On the other hand, China’s focus on developing nations is a plausible strategy as it can apparently wield better influence on them compared to developed nations. More importantly however, most of these developing nations like those in South America and Southeast Asia have shared a failed experience on the neo-liberal economic model that Northern economic powers have adopted. China on the other hand, embodies the success of a state-led economic model for economic development, which developed countries may find a more viable alternative. Instead of minimizing the role of government and depending on private enterprise to be the agents of economic growth, this model gives the government a central economic role. Instead of placing one’s fate solely on market forces, the government proactively engages in directing and controlling economic priorities. Instead of privatization, it adheres to nationalizing major economic entities. (Heynen, 2007) More importantly, this model also advocates social distribution of wealth instead of letting people struggle for their selves to survive.
This economic model by China which allures developing countries in South America, Asia and Africa plays a crucial factor for the success of the Chinese in forging bilateral and diplomatic relations required for its investment activities around the globe.
Barboza, D. (2009) China Starts Investing Globally. New York Times February 20, 2009. Retrieved from:
China Economic Net (2006) Higher demand likely to boost gold use by 17% (Shanghai Daily). Retrieved from http://en.ce.cn/Markets/Commodities/200612/05/t20061205_9673497.shtml
Heynen, N. (2007). Neoliberal Environments: False Promises and Unnatural Consequences. Routledge
Kurlantzick, J. (2006). China’s Latin Leap Forward. World Policy Journal. Fall 2006.