Baosteel executive hints at Rio bid

[FilM]

China is using its financial strength to buy up key assets around the world. This time they are looking to buy the world's 2nd largest steel maker Rio Tinto.

Link

It's akin to nationalising companies. Chavez is doing it with Venuzuelan companies, Communist China is doing it with our companies. And it's all facilitated by our huge reliance on Chinese goods, and in the future by our fast rising debt supported to a large extent by Chinese banks.

 

[Trogdor the Burninator]

I doubt any bid by China would get past the Foreign Investment Review Board in Australia, especially since it directly and adversely affects the bargaining power of other Australian companies.

 

[Norseman]

It's akin to nationalising companies.

No, it's nothing like that. It's akin to any other corporate takeover. Baosteel would be purchasing Rio Tinto, not the Chinese government. It makes that relationship quite clear in the article you posted:

"Baosteel executive hints at Rio bid"

Nationalizing is when a nation's government takes control of an industry in that nation, not when one company buys another. It happens all the time in the US, and around the world.

That alone should make you stop to think. Why is a there a corporation in 'Communist China'? If it's communist, shouldn't the corporations have been gotten rid of? As it turns out, even so-called 'communists' like money and China is one of the most corrupt countries in the world because of it. Power in China rests very firmly in the hands of those who can afford to wield it.

And it's all facilitated by our huge reliance on Chinese goods, and in the future by our fast rising debt supported to a large extent by Chinese banks.

The federal government already has an outrageous debt held in Chinese banks. Something like $257 billion as of 2005. It's generally at a low interest rate, but it doesn't really matter. It's still piling on the debt so rapidly that the debt limit has to be continually increased by congressional vote. We're still handing no-bid open-ended contracts with little oversight to Halliburton.

You might want to read what a whistle blower in the army has been saying about the Halliburton contracts in Iraq. Link.

As long as China is as corrupt as it is now, we shouldn't be buying products from them, for two reasons. Firstly, they bribe people over here as well. This is especially worrying with medical equipment. I spoke with one woman who worked for a Chinese medical company. She asked me if I would be interested in relaying a bribe from them to the FDA, so their company could sell MRIs in the US without needing to pass FDA inspection. Perhaps you've heard of all the lead tainted products from China, and the poisonous pet food? Normally, you'd think the FDA would check that sort of stuff. Not so often from China though; bribery is simply how you do things over there, so, of course, they bribe people in the US too. If you buy Chinese products, there will always be the risk that it has bypassed all standard safety testing, and you're going to be the guinea pig who gets to find out if it's bad for you.

Secondly, if it's bad for us, it's bad for the Chinese people too. They're working in sweatshops for wages that are hardly worth their time. Something like two million Chinese people make less than $100 per year. Chinese people have to make these lead-tainted products in hazardous work environments for 12 a hours a day, with no maternity leave, often no medical coverage, and they're not even allowed to protest about it. It's very profitable for the Chinese companies, but very bad for the people who have to work in those companies. Certainly until they are allowed to protest about their working conditions, we should not be making billionaires out of the people who keeping the laws in favor of such terrible working conditions.

 

[MorkandMindy]

In the US our government is living for today because that is what the public want.

To hand their money over to whoever supplies what they want and to have no care for the future.

I recall the change from the Carter to the Reagan / Bush Presidencies.

Jimmy Carter did what he could to move the US onto lower petroleum consumption. Following his plan the oil would last decades longer than it has, and a lot of us would be happier. And wasting petroleum means imports and that means more money goes to other countries.

But particularly the older voters wanted to use up the oil now, and get lower prices for everything by buying from abroad. Younger people wanted to still have jobs, but the losses were in factories at the bottom of the scale - at first, so the 'conservatives' weren't interested.

The oil got wasted, that's a problem for the next generation.

And the money went to other countries, and that's another problem for the next generation.


And yes, that is disrupting the lives of people in both countries, ourselves as we lose jobs, and equally importantly, our hope for the future. More unemployed and 'severely disabled' people burden our economy as we have to stop doing things because the state pays more than our manufacturing and programming jobs.

And disruption in China as they stop growing food and start building things for the West.

If the US goes into a big recession and cuts off imports, production in China will halve and many people there will be suddenly left with no incomes and living away from the farm land where their houses have been abandoned and demolished.

The only winners are a small number of rich people in both countries who make huge profits by stepping in where ever there is money to be made from big changes. People who get factories built where they own land, and can also rent out houses, people in government who decide where the factories will be built. Relatives of government officials who arrange to have the factories built.

 

[FilM]

No, it's nothing like that. It's akin to any other corporate takeover. Baosteel would be purchasing Rio Tinto, not the Chinese government.

I would agree with you it's a corporate takeover, except that Baosteel is owned 100% by the Chinese government, so ultimately it is a case of nationalization.

 

[MorkandMindy]

I would agree with you it's a corporate takeover, except that Baosteel is owned 100% by the Chinese government, so ultimately it is a case of nationalization.

I'm slightly puzzled so I guess others are too,

To me 'nationalization' has connotations of a government taking things either:

without compensation, or at a level of compensation set by the government.

This later could be aided by the threat of increased taxes on various aspects of the business, or additional bureaucracy and red tape and forbidding necessary expansion or mining the next bit of ground after the government makes a compulsory purchase or suddenly decides to enforce a treaty made with some natives a hundred years ago while ignoring all other treaties.

I'm just trying to guess that this instance of nationalization is because the government is deciding on other than short term financial gain. The relatively obvious point is that since China is a big manufacturer, the West will put up raw material prices to squeeze China's profits, so to maintain profits China should buy all raw materials asap.

In the West we don't do foresight it seems.

I'd really like to hear your take on this - cheers, Morky

 

[FilM]

No, nationalisation is the opposite of privatisation; the term nationalisation is being used currently in Britain as the government is considering buying a bank to save it from bankruptcy; they are not taking it, they are paying the market rate for it.

So yes, the more common term of nationalisation is when a goverment forcefully takes a company, like Chavez is doing, but it does have the more broader meaning of a government taking over a previously private company.

With regards to the Chinese: we won the Cold War over communism, and now I see communism starting to win back ground, buying up important companies around the world and turning them into government corporations. And we are naively facilitating them whenever we buy their goods or ask them to buy our bonds when we need money such as for our war in Iraq.

Not that I have any protectionist tendencies, I consider free trade to be the best avenue for raising the standard of living in developing countries, and providing us access to cheaper goods (something the protectionist Democrats and unions seems to forget).
But I am bemused how we are letting communism gain ground again.

 

[Norseman]

I looked it over and you're right. Baosteel is state-owned according to their third quarter report for 2007 (see the top right side of page 3). I retract my statement about this not being nationalization.

With regards to the Chinese: we won the Cold War over communism...

Correction: Against Stalinism. If you bother to read The Communist Manifesto, you'll see that they are very different from each other. Namely, Stalinism does not create a country run by and for its workers. It creates a country run by and for a dictator. You might also want to read George Orwell's Homage to Catalonia.

...and now I see communism starting to win back ground, buying up important companies around the world and turning them into government corporations. And we are naively facilitating them whenever we buy their goods or ask them to buy our bonds when we need money such as for our war in Iraq.

Not that I have any protectionist tendencies, I consider free trade to be the best avenue for raising the standard of living in developing countries, and providing us access to cheaper goods (something the protectionist Democrats and unions seems to forget).
But I am bemused how we are letting communism gain ground again.

You said it yourself. Cheap goods. I'm all in favor of free trade, provided that international suppliers are willing to maintain the same working standards that domestic corporations must maintain. Adam Smith had an interesting position on the subject:

In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.

If you get the Chinese workers out of the sweatshops and involved in politics and human rights, I bet you that the CCP would be entirely dismantled within one generation.

 

[MorkandMindy]

If you get the Chinese workers out of the sweatshops and involved in politics and human rights, I bet you that the CCP would be entirely dismantled within one generation.

Here I am, a factory worker, online being insulted as being in a mental torpor by Adam Smith, well he's in an even worse state now.

I don't know how you would get Chinese workers involved in politics and human rights. There is this little fear problem, like getting executed or harvested for organs sent to the West for operations. The state doesn't [bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse] foot over there, it is just what a lot of the right wingers here want to see. My guess is it would take two generations to clear that fear.

There is another problem of so many languages in the same workforce, and there is the unwillingness of workers lower down to offend workers higher up the hierarchy.


But what would be the point? We British workers know what is going on and would love to do something about it, but our choices are about the same as the Chinese. Last election we had three indistinguishable parties all proposing the same unpopular policies.

The Conservatives will hand running the country over to Brussels, Labour will hand it over to Brussels, and the much smaller Liberal Democrat party will... hand it over to Brussels. And the politicians in all three parties want to be accepted into the big bureaucracy in... Brussels.

 

[craigerNY]

MorkandMindy,

I am with you on many levels but I think it should be pointed out that Carter's solution to getting off dependence on Middle Eastern oil was a heavy shift to coal.

He had the right idea but given the options the wrong execution. Those were the times to some extent so I can not fault him with too much. But that is neither here nor there. We have many options today and I look forward to them all being taken advantage of. Specifically the prepetual/renewable ones.

 

[Ave Maria]

Wow. It kind of makes me nervous to know that China wants to buy up so many assets. After all, they are a Communist nation that isn't exactly sympathetic towards the United States.

 

[MorkandMindy]

MorkandMindy,

I am with you on many levels but I think it should be pointed out that Carter's solution to getting off dependence on Middle Eastern oil was a heavy shift to coal.

He had the right idea but given the options the wrong execution. Those were the times to some extent so I can not fault him with too much. But that is neither here nor there. We have many options today and I look forward to them all being taken advantage of. Specifically the prepetual/renewable ones.

I recall he turned down the thermostat in winter and wore a jumper (sweater in the US), and put through fuel economy legislation for cars.

As for going to coal, my guess is it would have developed. Coal is mainly used for generating electricity, and moving from petroleum to electric power is the big step in changing over to nuclear. Analysis of coal mining accidents would help push in that direction too. Reagan also had pollution controls relaxed, I recall seeing yellow brown smoke from a power station on Long Island drift across to Bridgeport CT. And there were lots of deaths at that time from asthma, but 'teflon Ron' didn't acknowledge anything.

My guess there is since there are so many nuclear phobics, the stations would be built up in the tip of Maine or somewhere and a big DC line put through to the Boston - Washington metropolis, or some islands would be used.

Here in Britain we were developing breeder reactors and the advanced gas cooled reactor, until we found North Sea oil, then it all stopped. Now we are running out of oil and dependent on Germany for our gas supplies, and both public and government are in denial. We are further back than we were then.

The tie in with China? Big money outflows from the US and pretty well every country both to the Middle East and China. I recall how each financial year the government used to present an analysis of the nation's income and outgo, and it was always a close thing. Then came Reagan in the US and we soon followed. Running big deficits didn't matter, that's right, not for a while. Now the US dollar is sinking in a big way. Compared with the pound it might start to recover because the pound is also losing value. Spend now, let the next generation pay the national debt and redeem the dollars we spent abroad. If we don't sell products then we will be selling assets. Over here we sold a lot of our oil. Not very nice for the next generation.

 

[horuhe00]

People that need to say "communist" before saying China have some issues. It's like saying "Capitalist America" instead of America. Grow up.

 

[FilM]

People that need to say "communist" before saying China have some issues. It's like saying "Capitalist America" instead of America. Grow up.

Why pray tell? What's wrong with reinforcing that a communist government is nationalising some of the world's key companies?

 

[horuhe00]

Why pray tell? What's wrong with reinforcing that a communist government is nationalising some of the world's key companies?

It says a lot about you but I won't waste my time telling you what it means because it'll mean nothing to you.

 

[FilM]

It says a lot about you but I won't waste my time telling you what it means because it'll mean nothing to you.

Having trouble articulating an argument?