Skip to main content

Is China the new #1?


The coming of the Chinese century and the final demise of American hegemony have been announced frequently as a sure thing. I have dealt with several of the issues associated with that, from the misconception of the fears about the dollar as the key currency (yep, will continue to be the unit of account in international affairs for a long time) to the question of the global imbalances (the problem is not that they are big, but the fact that they are not big enough; if the US grew decently and pushed the world economy its trade deficits would be larger).

Here I want just to point out a recent study that looks at corporations. The study shows that a small number of financial institutions basically controls the overwhelming majority of transnational corporations (TNCs). To be precise "only 737 top holders accumulate 80% of the control over the value of all TNCs." These, mostly financial, institutions "are at least in the position to exert considerable control, either formally (e.g., voting in shareholder and board meetings) or via informal negotiations," still according to the same paper.

How many Chinese groups are part of these elite institutions? Well, below the list of the top 20.

1. BARCLAYS PLC (UK)
2 CAPITAL GROUP COMPANIES INC (US)
3 FMR CORP (US)
4 AXA (France)
5 STATE STREET CORPORATION (US)
6 JPMORGAN CHASE & CO. (US)
7 LEGAL & GENERAL GROUP PLC (UK)
8 VANGUARD GROUP, INC. (US)
9 UBS AG (Switzerland)
10 MERRILL LYNCH & CO., INC. (US)
11 WELLINGTON MANAGEMENT CO. L.L.P. (US)
12 DEUTSCHE BANK AG (Germany)
13 FRANKLIN RESOURCES, INC. (US)
14 CREDIT SUISSE GROUP (Switzerland)
15 WALTON ENTERPRISES LLC (US)
16 BANK OF NEW YORK MELLON CORP. (US)
17 NATIXIS (France)
18 GOLDMAN SACHS GROUP, INC., (US)
19 T. ROWE PRICE GROUP, INC. (US)
20 LEGG MASON, INC. (US)

The first Chinese corporation is at number 50, the China Petrochemical Group, a resource based State firm. Oh yes, the evil giant vampire-squid is only number 18, but it is on the list. The Chinese economy, like the economies of almost any peripheral country, is partly owned and managed by a network of firms that are fundamentally from developed countries (in the top 20 above, from the US, the UK, France, Germany and Switzerland). The reverse, that is Chinese control of firms in developed countries, is minimal. Yes, sure, China is number one!

Comments

Popular posts from this blog

What is the 'Classical Dichotomy'?

A few brief comments on Brexit and the postmortem of the European Union

Another end of the world is possible
There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union. See, for example, the first three paragraphs of Paul Mason's column here. And it is true, large contingents of working class people, that have suffered with 'free-market' economics, voted for leaving the union. The union, rightly or wrongly, has been seen as undemocratic and responsible for the economics woes of Europe.

The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to France, Germany and other countries with their populations demanding their own referenda, will lead to the abandonment of neoliberal policies. Aust…

A brief note on Venezuela and the turn to the right in Latin America

So besides the coup in Brazil (which was all but confirmed by the last revelations, if you had any doubts), and the electoral victory of Macri in Argentina, the crisis in Venezuela is reaching a critical level, and it would not be surprising if the Maduro administration is recalled, even though right now the referendum is not scheduled yet.

The economy in Venezuela has collapsed (GDP has fallen by about 14% or so in the last two years), inflation has accelerated (to three digit levels; 450% or so according to the IMF), there are shortages of essential goods, recurrent energy blackouts, and all of these aggravated by persistent violence. Contrary to what the press suggests, these events are not new or specific to left of center governments. Similar events occurred in the late 1980s, in the infamous Caracazo, when the fall in oil prices caused an external crisis, inflation, and food shortages, which eventually, after the announcement of a neoliberal economic package that included the i…