Clampdown Driven by an Unmentionable Fear

Monday, December 10, 2007 21:14
Posted in category The Big Picture

I am not sure what you thought when you read this title, but for me it was either another round of NGO closures were coming, or consumers were turning away from Made in China during the Christmas season.

As it turns out though, this article written by DEREK DeCLOET looks at the phenomenon surrounding Canada’s fear of Chinese inbound investment, and it is really interesting.

I say “really interesting” because we have all seen how the U.S. reacted to the attempted buyout of UNOCAL, and we are all seeing the fear factor that Lou Dobbs is instilling into his viewers, but there have been so few tests of just how much resistance there is in these markets and I think this article asks a lot of interesting questions and raises some good points

For the time being, I do not see this being a large issue. the majority of activity is occurring south of the equator and I expect that to continue as it is much easier for the Chinese to transact there. Less Australia and a few other nations, many in SE Asia, S. America, and Africa are willing to allow Chinese investment much more easily. Perhaps this is a result of China’s push over the last few years to make friends, part of it is a need for China to gather resources, but I think partly this makes economic sense as well as their economies more closely match in terms of maturity and fragmentation ( that is not meant to sound bad..)

Where this gets interesting for me, and this is something people have been speculating on for a while, is that at some point Chinese money is going to look for a home in the U.S. and E.U. markets. It is something that I can see companies preparing for in a few industries already, and there is little doubt in my mind that when it occurs there will be push back. After all, the model will be for Chinese firms to come in, buy a company for its distribution channels (the first moves will be industry players), move manufacturing to the best shore model, and then align the manufacturing and distribution into what are hopefully (fingers crossed) strong global positions.

Some of them will hit the front page, and some of them will hit the wall…. and as a product of the 80s, I am wondering if Michael Keaton will come out and make a movie called 加油!(Jia You) that will rally the auto industry?

After all, my prediction is that in 5 years one of the big 3 (Ford or Chrysler) will be Chinese…

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6 Responses to “Clampdown Driven by an Unmentionable Fear”

  1. China Suppliers says:

    December 11th, 2007 at 12:08 am

    I wonder how they still haven’t got here (Balkan), and regarding buying out Ford or Chrysler I believe that’s not going to happen. If you said Japanese or even Koreans OK but Chinese… Anyway they would be better buying Hundai or even Kia and “start” from there…

  2. Rich says:

    December 11th, 2007 at 1:58 am

    Top China Suppliers!

    My reasoning for Chrysler or Ford is simply they are already having real financial issues, and Chinese manufacturers are much more familiar with GM, Ford, and Chrysler (SAIC, Chery, and Changan partnerships).

    Also, as you don’t respond to emails, I would appreciate it if you would either link me to your blogroll or give me credit for the posts that you put on your site. Not that I am doing this for revenue, but you are ranking higher than me for my own posts!

    Thanks
    Rich

  3. China Suppliers says:

    December 12th, 2007 at 12:37 am

    Chrysler’s having financial issues since… too long.. Does Chery for example have a production line in USA? If some of them do, then I guess there’s a possiblity..
    And regarding your posts Rich, I’m sorry if you see it that way but:
    1. I responded to your email, like in couple of hours after you send it, and removed most of that posts that were “sourceless”
    2. You were No# 1 or 2 in my blogroll (when I had it:)
    3. I’m giving everyone >deserved< credit, check it out
    4. I’m a loyal reader of yours

    And regarding to my rankings, can I offer you my marketing services? (Just kidding!)
    PS: Make that “Stumble it” link bigger and put it just beside ShareThis, Stumbleupon is powerfull!

  4. Rich says:

    December 12th, 2007 at 1:02 am

    Hi China Supplier (TOP China suppliers).

    At this point, I don’t think there is a Chinese firm that has production in the U.S., but what is interesting is that the Japanese have done very well setting up plants…

    Appreciate your reponse on the other.
    1) I never got the email, but I never sent a second one either!
    2) I did notice the new design and it looks much better than the first…. we all have transitions
    3) We all appreciate
    it
    4) Fantastic!

    for Stumbleupon, I was just having that conversation yesterday with a friend. I am somewhat up on all the code and buttons, but I am still just tring to figure out which buttons are worth putting up on the site….. I don’t want to kill readers with the options.

    Hope all is well and thanks for the tips.

  5. China Suppliers says:

    December 12th, 2007 at 5:52 am

    Quote-Rich: “but what is interesting is that the Japanese have done very well setting up plants”

    Now we’re back to what I was saying:
    Quote “If you said Japanese or even Koreans OK but Chinese”

    Regarding social network applications, ShareThis has enough options, but adding additional links to StumbleUpon, Digg and del.icio.us can’t hurt you.. I bet digg too will do good for you..

  6. Rich says:

    December 12th, 2007 at 6:11 am

    TCS,

    ok. I came around in the circle. What makes the Chinese difference is:
    1) Koreans and Japanese already have established their own manufacturing and distribution for U.S. they paid a lot of tuition, they did it themselves, and they entered a market where the big 3 were still strong in the U.S.

    2) Chinese are FLUSH with money that needs to leave the shores, and groups like Blackstone would gladly work the finance side should they need it!

    3) Like Lenovo, a big play like that would have a lot of support from the Chinese government. not sure the Japanese or Korean governments are still that involved in their auto industries

    4) The Chinese would see this as the quickest way into a market they badly want to enter – Japanese are already there.

    R

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