In early June, hoping to ease growing trade tensions with the European Union, China agreed to place voluntary limits on the growth of its textile and apparel exports to Europe. The decision came hours before the EU was set to impose its own trade restrictions on China. A few days later, deep misgivings about China's rising economic and political clout fueled a fierce debate over a major Chinese oil company's bid to buy U.S. producer Unocal. Topping Chevron's original offer of $16.8 billion, the $18.5 billion bid from the government-controlled China National Offshore Oil Corporation (CNOOC) came under fire from U.S. lawmakers. These two incidents highlight the new economic reality: China is no longer just a destination for foreign direct investment (FDI)--it is the home for Asia's new multinationals.
Bamboo Networks to SEZs
Since the 1500s, southern China has been a springboard for emigrants to Vietnam, Thailand, Indonesia and elsewhere in Southeast Asia. These overseas Chinese have developed an informal "bamboo network" that transcends national boundaries and extends throughout the region, where entrepreneurs, business executives, traders and financiers of Chinese descent are major players in local economies.1 Today, the array of complementary business relationships comprises more than fifty million ethnic Chinese, who control many of Asia's largest public companies and who have contributed to the rise of China's new multinationals.
When, a century ago, the first wave of globalization swept across the developed economies of western Europe and North America, East Asia enjoyed a boom of its own. Chinese capitalists launched operations outside China while investing in their home country.
