Corporate China’s political shadows

Isabel Hilton in the Guardian says British business should be wary of the opaque Communist party role in China’s corporate culture

It was reported this week that China’s sovereign wealth fund is about to receive new capital from the government, adding billions of dollars annually to its already impressive wallet. As China’s economic power continues to grow and countries around the world compete for Chinese investment, the question facing developed countries is not so much what happens when China rules the world, as what will be the impact when China owns the world?

The China Investment Corporation was set up in 2007 to invest some of the $3tn in foreign exchange reserves that have accumulated through trade surpluses – fuelled in part, critics would say, by an artificially depressed exchange rate. It is currently the world’s fourth largest sovereign wealth fund but is growing fast as the Chinese government pursues its twin goals of securing raw materials and energy, and reducing its holdings of US treasury bonds – no longer seen by Beijing as future-proof.

Until 2000 China’s investments outside Asia were small and largely aimed at energy and natural resources in Latin America and Africa. But now China is on a spending spree, buying into mining interests from Australia to Canada and looking for acquisitions that might give them technology, major brands or market access. [READ THE REST]

Other China news: Economy

Just after the State Council acknowledged that the massive Three Gorges Dam has had a negative social and environment impact, the corporation running the damn announced that they came up short in a recent audit. // China has surpassed India as the biggest market for investment-grade gold, based on newly released statistics for the first quarter of 2011. (Although India is still the world’s largest overall consumer of  products.) … The sudden jump in Chinese demand for gold is thought to be driven by fears of inflation. Analysts expect that demand for gold in China will increase in the future. // More tragedy for  workers, as an explosion at a Chengdu plant killed two workers and injured at least ten. // The New York Times reports on a new fad among China’s super rich: illegal helicopters. // In recent weeks, Internet users in China have complained of increasing difficulty accessing overseas websites, in what many see as part of the ongoing crackdown on free expression. In the Global Times, Fang Binxing, the so-called Father of the Great Firewall, attributes the problem to cost-cutting measures by ISPs.

Other China news: Chinese soft imperialism

South Korean media has reported that North Korea’s heir apparent Kim Jong Eun is traveling in China on his first trip overseas since being chosen to take over power from his father, Kim Jong Il.  // China Confirms Visit by Kim Jong II – Wall Street Journal.

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