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Dragon watch: Should a Chinese company get a substantial holding in Potash Corp. (and other matters)?

Or, indeed, other large Canadian companies? Earlier:

The Dragon’s Weltmacht/Canadian angle Predate

Plus more on Sinochem and Potash Corp. Now excerpts from an article in the New York Review of Books (full text subscriber only):

The Party: Impenetrable, All Powerful

The Party: The Secret World of China’s Communist Rulers
by Richard McGregor
Harper, 302 pp., $27.99

…as Richard McGregor shows in his book The Party: The Secret World of China’s Communist Rulers, the Party is not increasingly irrelevant; rather, it is at the center of events as varied as shifts in global currency markets, New York stock market listings, and clashes over North Korea. And far from being decrepit, the Party is surprisingly vital, as McGregor convincingly demonstrates in chapters on how it influences China’s economy, military, minority policy, and understanding of history. Although many of its policies are not Communist, the Party is still Leninist in structure and organization, resulting in institutions and behavior patterns that would be recognizable to the leaders of the Russian Revolution. McGregor’s book is also proof that for all of its secretive tendencies, the Party and its power can be usefully analyzed.

Our failure to do so has led to spectacular misperceptions about China, a key one being that the government has been privatizing the economy. Back in the 1990s, for example, the government announced that it would “grasp the large and release the small,” which was taken in Western capitals to mean privatization. In fact, the plan was simply to turn state-owned enterprises into shareholder-owned companies—with the government holding a controlling or majority stake. Many shares were sold overseas to investors eager for a piece of China’s economic growth, but even today almost all Chinese companies of any size and importance remain in government hands.

…All have Party secretaries who manage them in conjunction with the CEO. In big questions, such as leadership or overseas acquisitions, Party meetings precede board meetings, which largely give routine approval to Party decisions. The Party’s overarching control was driven home a few years ago when China’s large telecom companies had their CEOs shuffled like a pack of cards because of a decision by the Party’s Organization Department. It would have been like the US Department of Commerce ordering the heads of AT&T, Verizon, and T-Mobile to play musical chairs. For the Organization Department, which acts as the Party’s personnel department, it was normal; it often shifts senior Party officials every few years to prevent empire building and corruption.

…judges translate court decisions made by Communist Party legal affairs committees into rulings. Since judges are not allowed to rule independently, Western efforts to foster rule of law by training them are thus largely pointless [a Canadian government aid effort (see 1. here)--hah!--wake up, Conservatives].

…the reach of the Party’s Organization Department is so expansive that it would be like one group in Washington naming the members of the Supreme Court, all the members of the Cabinet, the editors of The New York Times and The Wall Street Journal, the heads of all major think tanks, and the CEOs of major companies like General Electric, Exxon-Mobil, and Wal-Mart.

…The big companies that are listed abroad are indeed giants but mainly because of their sheer size; they are essentially little more than partially privatized quasi monopolies—big telecoms, banks, and insurance and oil companies. That makes them large but not particularly nimble, inventive, or influential in international markets, except when trying to buy natural resources. [emphasis added].

…Foreign policy, for all the international efforts to engage China on global issues, remains focused on two narrow concerns: territorial issues like Taiwan and Tibet [and others: "Japan feels the Dragon’s fiery breath"], and resource extraction in Africa or Central Asia [see below]. And the state has become so adept at political control that no one seriously argues that civil society is becoming more robust; on the contrary, the Party’s new-found confidence has allowed it to roll back gains of previous years…

More on that resource extraction:

Rescuing Afghanistan’s Buddhist History

Even as once-secure parts of Afghanistan succumb to criminality and the insurgency, and the Afghan financial system hovers on the brink of failure, there are small signs of hope here. A spectacular Buddhist archaeological site is now being excavated by the Afghan government’s National Institute of Archaeology, near where Al Qaeda ran a training camp in the 1990s.

[ED-AM213_afghan_G_20100914141754[5].jpg]

Work on Mes Aynak (“Little copper well”) has proceeded at a rapid pace since it began in May, because the archaeologists — 16 Afghans and two Frenchmen from DAFA (Délégation Archéologique Française en Afghanistan) — are racing against time. Within three years, the site is slated to be destroyed by Afghanistan’s largest single foreign investment, a Chinese-run copper mine not 900 yards away…

Predate: The following appeared in, gasp, the Globe and Mail (China upsuckers extraordinaire) yesterday–but not from, natch, the news staff:

Why China isn’t fit to lead Asia

Mark
Ottawa

4 Responses so far.

  1. Foxtrot BravoNo Gravatar says:

    The potash and oil sands buyouts are, by an order of magnitude, the most important issues effecting Canadians in our future. Unfortunately, our stupid, lazy, simpleton, news media does next to nothing to educate the public because they are too busy fanning their easy-to-manufacture high school-like political gossip mongering. We are at a very important juncture in our economic history, and no one is paying attention.

  2. dmorrisNo Gravatar says:

    The potash buyout is still under federal government consideration,the buyers/sellers have to convince the government that the sale would be beneficial to Canada.

    I wonder what form the bribe will take? Perhaps a huge contract for Bombardier planes or transit cars?

    There is no way the feds should allow this sale,any more than they should allow China to own the oil sands or most of B.C.’s coal.

    China is about to become the predominant economic power in the world,and there’s no need to let them take us over the easy way.

    I wish we had Leaders as determined,as Nationalistic,and as far sighted as China does.

  3. paulNo Gravatar says:

    I here and agree with both of you an i am paying atention.

    @foxtrot &dmorris

  4. FeFeNo Gravatar says:

    http://spectator.org/archives/2006/05/30/fellow-methodist-demands-bush
    –All the eco-terrorist greenies and socialists around the world have a powerful lobby in D.C. with national reach

    http://www2.macleans.ca/2009/07/13/macleans-interview-martin-jacques/3/
    –UMC socialism fits in well with China’s view of dominance in its sphere and goals for more voting power with World Bank and IMF, and giving to Angola with no democracy strings. (China recently offered the same to Greece.)

    With the largest Methodist church in Seoul, So Korea, 120,000 people, to China and around the world, a sly One World Government with all the love for China.