China Buys the World : Analyzing China's Overseas Investments

This book discusses the strategies that will define China’s overseas expansion in the coming years. China is spending billions of dollars acquiring overseas companies and assets, from the Chicago Mercantile Exchange to the Hinkley Point nuclear station. Will this corporate buying binge continue? In this book, Collier argues that state control will occur only among certain strategically key acquisitions while many of the corporate acquisitions will be done by smaller, private firms. However, China’s rising debt load may restrict the ability of many firms to obtain capital, including from China’s shadow banking sector. A key to understanding China’s strategy is to look at how the state intervenes in private business. Collier ably brings clarity to the “gray area” between state and private economic activity in this complex landscape. As the West faces China’s growing investments abroad, this book will be required reading for executives and decision makers, journalists, and policy makers. Contents 5 List of Figures 6 Chapter 1: Introduction 8 Creating Global Champions 10 Where Does the State End? 13 Current Political Climate 15 Bibliography 17 Chapter 2: The Setting 18 The Bureaucratic Entrepreneur 18 The Party and the Entrepreneurs 19 The Trends 22 China’s FDI 22 Bibliography 30 Chapter 3: The Dealmakers 31 Syngenta 31 The Ultra-rich in China 34 The Aviation Entrepreneur 37 The Airline Turned Conglomerate 39 HNA’s Mysterious Investors 41 Problems with Beijing 42 The Secretive Firm 44 Anbang’s Thwarted Ambitions 48 Anbang’s Cash Squeeze 50 Bibliography 52 Chapter 4: State or No State? 53 State Capitalism 54 Drawing the Line 55 China’s Own Classification 56 A Guide to State Control 57 Postal Bank’s Private Ambition 58 Networked SOEs 59 Government and Influence 60 An Informal Taxonomy of State Control 60 The China Dealmaking Hierarchy 61 A Taxonomy of State Control over Corporates in China 61 Direct Ownership 62 SASAC’s Role 63 Political Control 65 Access to Capital 66 Bibliography 68 Chapter 5: China’s Global Tentacles 69 The Currency Problem 69 The PBOC Faces a “Quandary” 71 Beijing Cracks Down on Capital Flight 72 Debt as a Weapon 74 OBOR’s Problematic Financing 76 Security or Money 81 Bibliography 84 Chapter 6: The Money Behind the Deals 85 Low Success Rate 85 Who’s Paying for China’s Buying Spree 86 Profitability Problems 87 Sources of Capital: China’s Policy Banks 89 Beijing’s Own Bankers 89 ChemChina’s Debt Problems 95 Shadow Banking and the Case of HNA 96 One HNA Vehicle: JBH.com 98 Another Capital Source: P2P 99 Bibliography 100 Chapter 7: Will China Take over the World? 101 Introduction 101 China’s Imperial Ambitions 102 A Quick Take on Future Trends 104 The Political Crackdown 105 Shadow Banking’s End Game 108 The Global Real Estate Gamble 111 Debt Remains a Problem for Developers 114 Tightening Circle of Capital 117 Slowing Pace of Loans: A Cautionary Signal 118 How to Control China? 120 Summary 122 Bibliography 123 Bibliography 124 Index 130 Front Matter ....Pages i-viii Introduction (Andrew Collier)....Pages 1-10 The Setting (Andrew Collier)....Pages 11-23 The Dealmakers (Andrew Collier)....Pages 25-46 State or No State? (Andrew Collier)....Pages 47-62 China’s Global Tentacles (Andrew Collier)....Pages 63-78 The Money Behind the Deals (Andrew Collier)....Pages 79-94 Will China Take over the World? (Andrew Collier)....Pages 95-117 Back Matter ....Pages 119-128