From China Daily 9/6

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Buyer of little choice

Fair or not, both the collapse of Chinalco's Rio deal and the planned sale of GM's Hummer brand to a little-known Chinese company shows that China still does not enjoy much buyer power in the global market.

Yet this is not necessarily bad. In fact, it can serve as motivation for the country to look deeper within for the engine to drive its economy. China can better tap its inner dynamism to become a global consumer market than simply remain a buyer of little choice.

For Chinese policymakers who are encouraging domestic enter-prises to expand overseas, the recent cases surely look disappointing. With more than $1.9 trillion in foreign exchange reserves, the country is eager to spend some of this wealth on purchasing what is needed to sustain its economic growth.

Due to a combination of political and commercial factors, Chinalco's attempt to invest $19.5 billion in the Anglo-Australian mining company failed last week, with its general manager saying he was "very disappointed". Had the bid succeeded, it would have been the largest overseas acquisition deal by a Chinese company, second only to the China National Offshore Oil Corp's bid for California-based Unocal in 2005, which, too, was blocked.

Clearly, the collapse of the deal marks a setback both to the company and the country. The Chinese company's strategic aim to build itself into an international multi-metal mining company has taken a hit.

More important, its failure to clinch the buyout is a blow to China's effort to secure supply of resources and raw materials for its ever-growing manufacturing capacity.

Meanwhile, the enthusiasm of GM to sell the Hummer brand to a Chinese truck maker just one day after its filing for bankruptcy has given rise to a domestic debate on the viability of the deal. While China has made clear its determination to pursue energy-saving, environment-friendly and sustainable growth, the purchase of a US auto brand famous for being a gas-guzzler obviously does not make sense. It was reported that the US government was ready to approve the deal while the Chinese government frowned upon it.

The difficulty for Chinese companies to buy what they want for strategic reasons is in sharp contrast with the desire of foreigners to sell what may not be good for the Chinese economy.

In a bid to help rebalance the world economy, China feels obligated to spend some of its foreign exchange reserves. But the point is that there doesn't seem to be so many opportunities for China to buy.

Under the circumstances, a change of thinking appears to be necessary for Chinese policymakers. Instead of focusing on overseas acquisition, the country should further step up efforts for expanding the domestic market.

The country will naturally gain much more buyer power when it becomes one of the most important global consumer markets.

 

Counter-productive care

The recently released film Examination 1977 tells the moving story of a group of youth receiving re-education in the northeastern Chinese countryside during the Cultural Revolution(1966-76). They saw the light of hope at the end of the tunnel when universities stopped admitting students on the basis of their political performance and background, and decided instead to enroll people who excelled in a new national college entrance exam.

The last episode in the movie shows a group of young men and women racing through the juggle to catch their train after their truck breaks down. Unfortunately they miss the train. Luckily, their former leftist and unhelpful boss comes to their rescue and drives them to the exam venue in a tractor. The hardship experienced by the youth had many in the audience weeping.

Confronted with the national college entrance exam over the weekend, high school graduates are facing the same once-in-a-lifetime choice and pressure, but as a pampered lot unimaginable to those in the period of the movie.

In Shanghai, many parents have booked hotel rooms near the exam venue so that their only child could have a good rest during the noon break. One parent, according to the Shanghai Morning Post, even reserved a luxury suite for three days paying a total of 15,000 yuan.

In fact, 90 percent of the rooms in the Tianping Hotel were booked by students during the college exams in the last few years.

While some businesses tout invigorating drinks for the exam-stressed students, domestic service agencies are providing special nanny service by cooking delicious and nutritious meals for these students.

As usual, construction sites near schools and residential buildings in many cities have been ordered to lower their noise levels, and stop construction work at night. And the taxis available have been fully booked for the test duration.

In Taiyuan, Shanxi province, teachers monitoring the tests have been told not to wear shoes that would make excessive noise in classrooms. And in Confucius hometown of Qufu in Shandong province, some parents are taking their children's pens to the Confucius temple to be consecrated.

Compared with the neglect faced by those in Examination 1977, the excessive care and attention devoted to the students today are disturbing.

It shows the lack of independence of today's 17- and 18-year olds as well as the doting parents' lack of confidence in these children.

It would indeed be a big worry if our high school students didn't know how to get to school on their own or feed themselves during the lunch break.

It is unnerving to see both parents and children believe that a nourishing meal and a consecrated pen would have an impact on the test result.

All this attention from parents, schools and society can only make the many, already-spoiled high school graduates more nervous during the exam. Such excessive and indulgent care may be counter-productive.