China has become the world's second biggest ecomy and its largest exporter. It possesses the world's largest foreign exchange reserves and has 29 companies in the FT 500 list of the world's largest companies. China's Rise' preoccupies the global media, which regularly carry articles suggesting that it is using its financial resources to buy the world'. Is there any truth to this idea? Or is this just scaremongering by Western commentators who have little interest in a balanced presentation of China's role in the global political ecomy? In this short book Peter Nolan - one of the leading international experts on China and the global ecomy - probes behind the media rhetoric and shows that the idea that China is buying the world is a myth. Since the 1970s the global business revolution has resulted in an unprecedented degree of industrial concentration. Giant firms from high income countries with leading techlogies and brands have greatly increased their investments in developing countries, with China at the forefront. Multinational companies account for over two-thirds of China's high techlogy output and over ninety percent of its high techlogy exports. Global firms are deep inside the Chinese business system and are pressing China hard to be permitted to increase their presence without restraints. By contrast, Chinese firms have a negligible presence in the high-income countries - in other words, we are inside them' but they are t yet inside us'. China's 70-odd national champion' firms are protected by the government through state ownership and other support measures. They are in industries such as banking, metals, mining, oil, power, construction, transport, and telecommunications, which tend to make use of high techlogy products rather than produce these products themselves. Their growth has been based on the rapidly growing home market. China has been unsuccessful so far in its efforts to nurture a group of globally competitive firms with leading global techlogies and brands. Whether it will be successful in the future is an open question. This balanced analysis replaces rhetoric with evidence and argument. It provides a much-needed perspective on current debates about China's growing power and it will contribute to a constructive dialogue between China and the West.
Peter Nolan is Professor of Chinese Management at the University of Cambridge and Director of the Chinese Big Business Programme at the Judge Business School. He has been centrally involved in discussions about the integration of China with the global economy and business system. He has testified before the US Congress' US-China Economic and Security Review Commission and served as an Advisor to the World Bank.