Chapter 46 China: Outward!outward!

China has friendly relations with many African countries that the United States despises, including some with rich natural resources.They formed an informal coalition of countries—excluding the United States, which of course was not strategically valued by the U.S. government.The current informal alliance, dominated by China, is reminiscent of the confrontation between the two camps of East and West during the "Cold War".These African countries include Zimbabwe, Bolivia, Venezuela, Nigeria, Angola, Sudan, etc. From 2001 to 2006, the total trade volume between China and Africa soared from 10 billion US dollars to nearly 60 billion US dollars, and the balance of imports and exports was basically achieved.This has made Africa as a whole China's third largest trading partner.The top two trading partners of China are the United States and the European Union.Most of Africa's exports to China are oil, food, minerals and metals.With the encouragement and support of the government, Chinese companies have cooperated closely with oil refineries in Angola, copper mines in Zimbabwe, manganese exploration companies in South Africa, iron ore producers in Gabon, and timber companies across the African continent.China's direct investment projects in Africa have reached $7 billion, and billions more have been used to set up affiliates of large companies, such as China National Petroleum Corporation's Sudanese refinery.

China never interferes in the internal affairs of other countries, which is in line with its consistent principles.How many times has China adopted a foreign policy that differs markedly from that of the United States in international affairs.The United States always issues orders to its allies or opponents, while China is always willing to establish cooperative relations with these countries on the basis of mutual benefit.China will not interfere in other countries' internal affairs, nor will it comment on other countries' cultures.China will not send volunteer troops overseas, and the Bush administration's overseas presence has aroused growing dissatisfaction. Chinese leaders clearly understand that only a policy of non-intervention will win the goodwill of other countries.China can say to a country that is at war with the United States: "We will not tell you how to run your country, nor will we impose our judgment on you, we are here to make friends with you, let us develop Let’s cooperate.” China’s actions in Africa have been described by President Hu Jintao as a “win-win” cooperation, which will not only help African countries develop at a faster rate, but also allow China to obtain the development resources it needs.

China has also made significant progress in handling diplomatic relations with Latin American countries.President Hu Jintao held warm and friendly talks with the Presidents of Bolivia and Venezuela.The presidents of both countries have publicly expressed strong dissatisfaction with the policies of the Bush administration, and they have declared that the emergence of China has provided them with new development opportunities between the two options of supporting the United States and opposing the United States.For China, despite the high cost of transporting Latin American oil and gas resources back home, it will still help Bolivia and Venezuela to extract oil and gas.The Chinese leader's round-the-world tour has been greeted like heroes and friends in various countries.This sends a signal: China will become the center of the global system.Those poor countries and countries that the United States looks down on will become the focus of China's care.China has shown that it is also a developing country, and it will help other developing countries gain voice in the world system.This has allowed China to establish good relations with those poor and backward countries, and these countries will also provide China with a steady stream of industrial and agricultural products.

President Hu Jintao's visits to those backward and weak countries are also part of the ever-changing balance of power between China and the United States.China is a hero and a role model for developing countries. President Hu Jintao was warmly welcomed when he visited these countries.The Bush administration expressed dissatisfaction with China's insistence on a fixed exchange rate system and China's attitude on North Korea's abandonment of nuclear weapons.Public opposition to rising gasoline prices is growing, however, and this is only the beginning of the impact on American consumers.

China has focused on strengthening relations with African countries, and the deepening of cooperation with them has pushed up the prices of major industrial products around the world. After 2004, the price of oil rose rapidly, from $50 per barrel at the beginning, to $145 per barrel in the summer of 2008.China is the country that consumes the most copper in the world. The increase in China's copper consumption has led to a rapid doubling of the international copper price, and then it has tripled and quadrupled.Since copper is an important material for pipeline construction, the rise in international copper prices has pushed up the cost of real estate construction in the United States.Demand for steel is also huge in China, which is a major producer of low-end steel but also imports high-end steel from Japan and South Korea.Large quantities of steel are used in the construction of tens of thousands of kilometers of railways, the construction of countless new buildings and the ever-expanding production of automobiles.The huge demand for steel has made China an important consumer of iron ore in the world.China's huge production of low-end steel and its massive imports of high-end steel have caused the price of iron ore and high-end steel to rise, which has also greatly increased the cost of everything from automobile production to real estate construction in the United States.

In 2006, China's oil consumption reached 1/3 of that of the United States. The United States consumed 20 million barrels of oil per day, while China consumed 6 million barrels per day.However, the proportion of China's oil imports has shocked the world, and China's consumption of raw materials has also increased significantly. In the 1990s, mining companies jointly set the global supply of oil and metals, based on their assessment of the relationship between world economic growth and energy and resource use.Because new mineral deposits and oil fields will not be able to be exploited until 10 years or more later (this is mainly due to the severe global environmental situation), these companies must plan ahead for the next few decades.This is why major multinational companies, such as Shell Oil Company, invest millions of dollars in corporate vision planning every year.They need to understand the long-term situation so that they can decide how much to invest in energy extraction, and how much to extract each year.

These companies believe that the demand for oil and metals is closely related to the growth of the world's average gross domestic product.The problem at hand, however, is that no calculation model predicts a sudden surge in demand growth in China.China needs more oil and raw materials than the world currently supplies.Since oil production is elastic, the supply of oil is relatively easy to solve, compared to the ability to refine oil is a difficult problem to solve.Unprecedented huge demand from China has accelerated global product prices. After 2005, the price increase of global products has been truly reflected in the actual lives of the American people and people all over the world.If Americans have always regarded China as a threat to snatch their job opportunities, now China has "threat" to the cost of living of Americans.

As U.S. misgivings about China have grown, China has also begun to reduce the openness of its economy.But China's aid to Asia, Africa, and Latin America has gradually deepened China's relations with these countries. In comparison, Sino-US relations have paled a lot.In fact, on the way forward for China, it is necessary to maintain a relatively close relationship with the United States, including the relationship with the US government, as well as the relationship with American companies and American consumers.American companies are an important force in China's domestic economic development. They not only make direct investment in China, but also are the source of technological and management innovation; American consumers have the most purchasing power for Chinese goods; Pegging the renminbi to the U.S. dollar also provides the basis for the stability of the Chinese currency.Neither the voice of the United States against China nor the occasional response from China will change the general direction of the current development of the relationship between the two countries, nor will it slow down the flow of business and capital between the two countries.When the people in the United States are hostile to China, if big companies are also involved in this sentiment, then they will suffer losses.

From industrial enterprises to retail enterprises, from service industry to luxury goods industry, China has become the focus of worldwide attention.Going to China to seek gold has become the goal pursued by many companies. China's Shanghai, Beijing, Shenzhen, and Hong Kong are all huge magnetic fields, which are extremely attractive to global companies.Merchants from the West shuttled constantly between these cities and used them as commercial frontiers.To do business in these places, entry is easy, transactions are quick, and results are satisfactory.On the Bund of Shanghai, the luxury shops against the flowing water show the style of a world-class city, no less than Rodeo Drive in Los Angeles, Fifth Avenue in New York, Via Veneto in Rome, and Rue de Rivoli in Paris. and Bond Street in London.Beijing has carried out large-scale urban construction for the holding of the 2008 Olympic Games, and Chongqing, Changsha, Tianjin and Dalian, which were originally developing relatively slowly, have also entered a new round of rapid development period.Dalian and Tianjin are also spending billions of dollars on new port facilities to facilitate the flow of container ships, iron ore carriers and oil tankers.

Faced with the large-scale construction of new airports in China, Boeing realized that the skies in Asia will be the opportunity for its next round of commercial development, rather than the old and burdensome American routes.Boeing predicts that China will purchase several thousand aircraft over the next 12 years, at a total cost of nearly $300 billion.Industrial companies Danaher and Eaton have already defaulted on the amount of goods purchased by China, and their production capacity is somewhat insufficient in the face of China's strong demand for hydraulic system products.China needs these products to keep its countless devices and factories running.Asset management companies have long coveted China's mutual fund and bond fund markets, because with the gradual regulation of the Chinese market and people's increasing demand for their own property management, the fund market will inevitably have a good prospect.

Casino managers in Las Vegas see promise in expanding their operations in Macau, and they have already bankrolled billions of dollars for the future.In China, the number of KFC outlets continues to increase, and its parent company, Yum! Brands, has expanded the operation of Pizza Hut.Before that, the Chinese knew nothing about this pizza brand.The market that Pizza Hut is facing is relatively high-end. Chinese people seldom associate dinner with pizza, but this special experience can bring them a new experience of modern life.Motorola competes fiercely in mainland China with European handset makers Nokia and Ericsson.At the same time, Microsoft and Intel invested heavily in research and development projects. After IBM entered China, it soon gained the upper hand in the competition with India's Infosys Technologies and the US Accenture Consulting Company (Accenture). In late 2004, the first Hooters restaurant opened in Shanghai, served by scantily clad, buxom women, a novelty in China. United Technologies Corp. is a large industrial conglomerate with mediocre performance in the United States and Europe, but has found huge business opportunities in China.The Otis elevator (Otis) produced by the United Technologies Corporation of the United States just caters to the demand for the geometric growth of the number of skyscrapers in China.Another division of the company, Carrier, installed heating and cooling central air-conditioning systems for the buildings.United Technologies' factories outside of Shanghai are running non-stop around the clock in order to meet the huge demand.Although the price of air conditioners has risen with the cost of copper pipes, the demand momentum remains unabated. Procter & Gamble's Olay brand is worth more than $1 billion, and the company is now poised to replicate its success in other products, such as Pampers diapers, household cleaning products and Gillette razors.Avon's annual revenue in China has grown by an average of 40%, mainly due to Chinese women's willingness to spend money on skin care products.Avon's competitor, Estée Lauder Companies, has used franchising to broaden its sales channels.Many brands familiar to Westerners have achieved success in China, such as Coca-Cola, Colgate toothpaste, Tiffany silver jewelry, Coach bags, Wrigley's chewing gum, Kraft Foods, etc.