China's financial community is experiencing a subtle but powerful shift in perceptions about the United States. Two recent events have eroded what had been a grudging admiration for American capitalism. The first is the uproar over last summer's failed effort by China National Offshore Oil Corp. (CNOOC) to purchase Unocal. The second is the fiasco in New Orleans in the wake of Hurricane Katrina.
The Chinese view the United States through a lens tinted by history, politics, and culture. But many in the financial community have more sharply defined opinions because they spent several years studying at U.S. educational institutions. Within this group, there is frank admiration for the American entrepreneurial spirit. These Chinese learned to appreciate the egalitarian rules of capitalism. That is, they expect the playing field to be reasonably level and victory to go to the better competitor.
Many of these notions were put to the test by the reaction in the U.S. Congress to a Chinese bid for Unocal. The company was one of the first American oil companies to go global when it acquired extensive oil and gas reserves years ago in Asia. CNOOC's bid to buy it unleashed a firestorm of political opposition in the United States. Lawmakers accused the Chinese of trying to corner the energy market. To the Chinese, that argument seemed remarkably self-serving, considering the United States accounts for one-quarter of world oil consumption. China consumes 8 percent.
Furthermore, the Chinese find it difficult to understand why their nation should be denied the opportunity to buy global energy assets. American, Canadian, and European companies have been on the prowl for natural resources for a century. True, CNOOC is 70 percent owned by the government. But to many Chinese, U.S. oil giants are synonymous with the self-interest of the States. Congress's reactionary rhetoric during the bidding war over Unocal was profoundly disturbing to the Chinese. The blatant protectionism seemed hardly in keeping with the entrepreneurial spirit of America.
The U.S. government's failure to provide timely aid to New Orleans also seemed tragically at odds with the "can-do" attitude that defines America. The response seemed parsimonious and badly organized. That's a criticism of the United States widely heard in China after last year's tsunami in Asia. The Chinese view these disasters as a test of the U.S. government's ability to protect and serve its citizens and those of its allies. The spectacle hardly provides an argument for the reduction of big government.
The United States is offered as the exemplar of the idea that unfettered capitalism and democracy are the keys to success. In China, a certain contempt for this model is beginning to emerge. Soon, you may hear arguments that China, with its controlled society and still largely controlled economy, might not need fixing after all.
Wu Chen is editorial director of CFO China.