China Buys the World

The Financial Times covers China's emergence as a leading creditor nation, racking up enough loans to Africa that it has the IMF concerned.

One has to accept this as a normal course of affairs for an export power that racks up significant levels of foreign reserves. China needs to do something with what it earns abroad, and it's investing where it sees a return. Importantly, China is investing in order to address future energy needs - a huge concern for a nation seeing its appetite increase dramatically.

And having burned their hands once trying to make major investments in the US, China's leaders have decided its better to invest elsewhere. For those who were alarmed at the prospect of China investing in Unocal, is this better for US interests? What's that old Sun Tzu maxim?

This is likely to be an area where China increasingly buts up against the rest of the developed world. Remember the confusion in China when Bob Zoellick said that China ought to behave like a stakeholder? Get used to the friction.

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