Jumping on China’s money-go-round poses moral issues that are leaving democracies giddy and short-changed.
Since the global financial crash in 2008 and the Great Recession that followed, Beijing has rolled out a massive foreign investment campaign.
At home, it has gradually relaxed foreign access to around 300 million middle-class consumers.
But this renminbi rush has come at a cost as President Xi Jinping’s Communist Party government flexes its muscles on the international stage and clamps down on human rights in the domestic arena.
Predatory trading practices, allegations of technology theft and economic bullying have also been leveled at Beijing.
“Chinese investment in Europe is growing and has focused strongly on technology. This raises the question of whether the EU [European Union] should fear losing its technological edge, especially when Chinese state-owned companies might distort competition, not only in China but also overseas through acquisitions,” a report released by the European Parliament Think Tank stated last year.
- Chinese investment in the EU has topped more than 160 billion euros or US$180 billion since 2000, research by the Rhodium and the Mercator Institute for China Studies in Berlin revealed.
- But that is dwarfed by the £134 billion or $185 billion of assets it owns in the United Kingdom.
- Nearly 200 UK companies are either controlled by groups or individuals based in China and Hong Kong or count them as minority shareholders, an investigation by The Sunday Times uncovered.
- In the United States, William Evanina, of the National Counterintelligence and Security Center, said in February that Beijing-backed theft of American trade secrets was costing the US up to “$600 billion” a year.
- On Monday, New Zealand Prime Minister Jacinda Ardern was reported in the media as saying that differences with China were becoming “hard to reconcile.”
- Nearly a third of New Zealand’s exports go to the world’s second-largest economy.
Buying spree: Chinese investors own nearly £57 billion of shares in the top 100 listed companies in the UK. They have a 49% stake in global banking group HSBC and have invested £1 billion in pharmaceutical giant AstraZeneca. Other investments include Hinkley Point C nuclear power station, Heathrow Airport and utility companies, The Sunday Times reported.
Poke in the Five Eyes: New Zealand has taken a softer approach to China compared to Australia, Canada, the UK and the United States, the other members of the Five Eyes intelligence and security alliance.
But that might be changing: “It will not have escaped the attention of anyone here that as China’s role in the world grows and changes, the differences between our systems – and the interests and values that shape those systems – are becoming harder to reconcile,” New Zealand PM Ardern said in a speech at the China Business Summit in Auckland.
Tougher line: Australia has taken a tougher line after pulling out of Belt and Road projects last week. Now, it is reviewing a 99-year lease held by a Chinese group on a commercial and military port in Darwin.
Big picture: US Secretary of State Antony Blinken has warned of the dangers China’s state-controlled economy poses to democracies ahead of this week’s meeting of Group of Seven foreign ministers in London.
What he said: “What we’ve witnessed over the last several years is China acting more repressively at home and more aggressively abroad. That is a fact,” he told the “60 Minutes” program on CBS News at the weekend, adding that Washington has “real concerns” about technology theft.
China Factor comment: Finding the right balance between trade and investment with China against a backdrop of hostile rhetoric will be as easy as walking a tightrope over the Three Gorges Dam. One slip could have serious consequences.