Blog: The Red Dragon looks to spread its wings
Chris Brook-Carter | 2 November 2007
Part of my role at this week’s World Whiskies Conference Working Party in Glasgow was to provide details on the emerging markets, in particular the pros and cons of looking to Brazil, Russia, India and China for growth when more traditional markets are stagnating.
It’s a scenario hardly exclusive to the whisky business as drinks companies the world over seek to grab a share of these fast expanding economies.
Typically as a journalist, I tended to want to play devil’s advocate at the working party to all the optimism and investment being ploughed into the Chinese economy in particular by drinks groups.
It was interesting then to read two articles in The Business magazine, which I picked up at Glasgow airport and read on the plane on the way home, that provided food for thought on the continuing rise of these economies.
The first highlighted the fact that a Chinese company, PetroChina, has just become the world’s second largest company, with a market capitalisation of US$434bn, compared to the US’s General Electric which is valued at $420bn.
The article went on paint a picture of a global economy in great flux. “It is perhaps the most dramatic overhaul of corporate and economic clout witnessed for a generation or more…Whichever way you slice the numbers, the change is striking. Of the top five companies in the world, three are now Chinese…Of the top 10, five are Russian or Chinese.”
The conclusion, is that we are seeing a decisive shift in power and The Business argues that it may soon be necessary to drop the “emerging” tag from these markets.
The conclusions I drew from that article ran into the second piece rather well. All the talk at various events I have been at recently concerning emerging markets has centred on the potential for Western companies to take advantage of growth in these economies.
However, they have failed to look at the consequences of the emergence of companies based out of these BRIC (Brazil, Russia, India and China) markets with serious financial clout and international aspirations. India’s UB Group’s acquisition of Whyte & Mackay this year could be the beginning of a shift in power.
And the second article in this week’s The Business highlighted a speech by Hu Jintao, the Communist Party Secretary that said China “must accelerate the growth of Chinese multinational corporations and Chinese brand names in the world market.”
Such rhetoric would have been unheard of only a few years ago, but it now demonstrates China’s aspirations to be an economic power of global scale but also one with an international reach.
By Chris Brook-Carter.
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