Friday 20 Jul 2018 | 01:22 | SYDNEY
Friday 20 Jul 2018 | 01:22 | SYDNEY

Measuring Chinese power


Malcolm Cook

14 July 2008 16:24

Trying to get a grip on how powerful China is — especially when the nebulous, unquantifiable concept of 'soft power' is brought into the discussion — is quite difficult. Is it replacing Japan as the economic centre of Asia? Probably not, in my view. Will it soon challenge the US for global supremacy? Certainly not, in my view.

However, one of the less standard measures I am using to move my own mental abacus around is how many firms and media outlets are relocating their regional headquarters to China. The Sydney Morning Herald has shifted its Asia economics correspondent to Beijing, and last week I met the executive vice president, Asia Pacific of one of the world’s largest public relations firms, who is now based in Beijing. I see Motorola now has its North Asia headquarters in Beijing while Alcatel Lucent has consolidated its Asia Pacific headquarters in Shanghai (sorry Singapore).

At the moment, the numbers of such headquarters seem to be quite low, and some think Singapore and Hong Kong are not at risk yet of losing their hub status in the region. As always, within China, there is quite a bit of competition between Shanghai, Beijing and even Guangzhou to capture these headquarters, each offering a range of sweeteners, from tax holidays to assistance with foreign exchange transactions.

How many top 500 non-Chinese companies, especially those in services, shift their regional headquarters to China may be a good measure of China’s growing economic importance globally  and regionally. Whether Shanghai or Beijing snare more will also be a good measure of where the economic muscle is in China itself.