The currency's grip on the world economy is rapidly slipping -- and that could mean bad things for us
By H. W. Brands
This article is an adapted excerpt from the new book, "Greenback Planet," from the University of Texas press.
“It’s China’s World. We Just Live in It,” Fortune announced in October 2009. The accompanying article described a prospecting trip in Africa by officials of the China National Offshore Oil Corporation. Nigeria was renewing production licenses in its oil fields, and CNOOC was aiming to elbow aside such traditional players as Exxon Mobil and Royal Dutch Shell. “The Beijing-based company wants to secure no less than one-sixth of the African nation’s production,” the article asserted. “And CNOOC, apparently, isn’t screwing around.” China’s sudden appearance distressed the existing licensees but delighted the Nigerians. “We love this kind of competition,” a spokesman for the government said.
The Fortune piece went on to describe other properties the Chinese were snapping up. Just the previous month the China Investment Corporation, the government’s sovereign wealth fund, had spent a billion dollars on a minority stake in a Kazakhstan oil and gas company. About the same time the CIC paid $850 million for part of a Hong Kong trading firm. The China Development Bank floated Brazil a $10 billion loan to underwrite exploration off the South American coast. “So far this decade,” the Fortune correspondent recounted breathlessly, “China has spent an estimated $115 billion on foreign acquisitions. Now that the nation is sitting on massive foreign-exchange wealth ($2.1 trillion and counting), it is eager to find something (anything!) to invest in besides U.S. Treasury debt.”
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