Tuesday, June 28, 2005
The buying of America
Paul Krugman has an interesting thing to say about China's recent buying of chunks of corporate America, in light of the brazen Chinese all-cash bid to take over the American company UNOCAL. He thinks that while Japan's buying spree of American companies in the 1980's proved ultimately harmless to America's larger geopolitical interests, China's bid for UNOCAL highlights an important qualitative difference between the Japanese investment in America fifteen years ago and the Chinese investment now. According to Krugman, China, unlike Japan, really does seem to be emerging as America's strategic rival and a competitor for scarce resources. And China is pursuing the less costly option of taking over an oil company rather than invading one whole Middle East country. Hmm, kung-fu masters are probably not quite up to the task yet.