Just in time for the Christmas shopping season, the Economist features an article on China's companies turning to takeover targets outside the Middle Empire, a move that is causing controversy especially in natural-resource-rich countries as Canada and Australia. Having historically focused on consolidation within its borders and investment of its excess cash in Western government bonds, Chinese are now getting more confidence in acquiring foreign companies.
Currently, Chinese own a mere 6% of global investment in international business. Historically top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50% in 1914 and 1967 respectively. If China shifts its investment from rich countries government bonds to foreign equity it could soon be in a similar position.
As long as strategic industries are protected and the acquired firms continue to satisfy consumers, the economist reckons, the West should welcome such movements, even if the shopping tour is subsidized money from government companies and state banks. The influence will not just flow one way. To succeed abroad, Chinese companies will have to adapt which means to hire local managers, investing in local research and being receptive to local concerns.