Let the Market Check Beijing’s Ambitions

PJ Media, April 4, 2013

–Article by Ying Ma

In the 21st century, China looks like it could buy the world. With over $3 trillion in foreign currency reserves, China is the largest foreign holder of U.S. debt. Its sovereign wealth fund owns minority stakes in prominent U.S. financial institutions such as Morgan Stanley and the Blackstone Group, and Chinese state-owned corporate behemoths span the globe, gobbling up assets and resources from Australia to Canada, from Southeast Asia to Latin America.

U.S. policymakers know well that Chinese foreign direct investment (FDI) brings jobs and other benefits to America’s weak economy, but many are alarmed by the influx of businesses that seem to respond to Beijing’s edicts more than they do to market forces. China’’s international bad behavior, such as aggressive cyber attacks against Western firms and government agencies, only magnifies the dangers of doing business with China’s government-affiliated entities.

Nevertheless, U.S. policymakers should not mistake the national security threats that China poses for the economic omnipotence of Chinese firms. In a world of intense global competition, and frequent hyperventilation about America’’s impending decline, avoiding an inclination to overestimate or panic over the prowess of China’s state-funded endeavors may be difficult, but would also be sensible.

To read the entire article, please click HERE.

1 Comment

  1. On China’s military reach, Shambaugh recalls, China had to hire foreign companies to evacuate 35,000 people from war-torn Libya dues to lack of long-range aircraft and ships. This is indication that China has not yet focused on its interests in the far abroad. Beijing’s continuing ambivalence over international involvements and preoccupations with domestic development and protecting its irredentist interests (such as Taiwan Tibet and maritime claims in the East and South China Seas) will continue to have a limiting effect on China’s security role.

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