Letters: China is not buying up the world just yet
"How China is buying up the world" proclaims your headline to a story setting out the way in which the People's Republic is supposedly exerting "an ever tighter grip in business" (12 January). How come, then, that China's outward investment last year was exactly half of the amount invested in China by foreign companies? Foreign investment in China rose by 18% in the first 11 months of 2010, while China's overseas investment increased by 10%. China's share of global outward investment is still far below that of this country, let alone the US.
Your story records the 2.6bn of deals struck during vice-premier Li Keqiang's visit to Britain this week. But Germany and South Korean companies alone have recently announced investment in plants in China that total twice as much. The deals Li did in Germany were to buy its exports not German firms, which are prominent partners in joint ventures in China, in high-speed trains and industrial equipment. A Chinese company may have bought Volvo, but joint ventures involving US, European and Japanese car companies are benefiting from the huge expansion of China's automobile sector.
Of course China has invested heavily in countries that can provide it with the raw materials it needs and would like to buy into firms that have technology it wants to move up the industrial value chain. But its ability to do so has been far more limited than you suggest for various reasons, including western concerns about national security. China will continue to seek investments abroad for sure, but, raw materials apart, the world is still buying into China, rather than China buying the world.
Head of China research, Trusted Sources
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