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Monday, June 27, 2005

When China comes to America

Well, there are the stories or facts that China discovered America before Christopher Columbus.

May be it is a sign of times that China returns to the US with a great appetite for business. Acquisitions, so to speak and if anything, the recent thirst of China for acquisitions of US companies also starst to spark concerns. It might not have started with the Lenova aquisition but this move catapulted the country into the spotlight.

Now came the bid for Unocal, a California oil and gas company with extensive fields in Asia. I wrote about it before, but now it seems to be for real.

The bid is surely related to the growing hunger of China for resources. , but it also shows the ongoing weakness of the US. As the New York Times writes: "For months, many lawmakers in both parties have become almost frantic about China's soaring trade surplus and its impact on American manufacturers", and,further in the article "China is also a leading creditor of the United States; it acquired more than US$200 billion of Treasury securities over the last year.

Moreover, China is already home to a growing number of American-owned factories, many of them exporting to the United States, and a large number of factories that are suppliers to American companies."

China still keeps running, despite all its problems and challenges, and it opens up to the world, more than the world has expected.

The next deals are in the making already - "Chinese appliance maker Haier Group would not comment on its plans after competitor Maytag Corp. of Iowa said it was reviewing a $1.28 billion buyout offer from Haier and two U.S. private equity firms, Bain Capital and Blackstone Group."

And this means that all of us - countries, individuals, companies, need to shift their mental maps because, believe it or not, China is not going away.

(By Asia Business Consulting)