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eptember
2009
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term contract has its adherents among big buyers of steel, such as
automobile makers, supporters of quarterly sales are persuasive.
Ian Ashby, chief of the iron ore division at Australia’s BHP Billiton,
the world’s largest miner, told the Journal that lower-cost producers
of iron ore, his company included, would function better in a
quarterly system.
“The spot market is where buyers and sellers meet to find the true
market price for iron ore,” Mr Ashby had said at a meeting of bank
investors in Australia, in May. “It should be clear to everyone that the
changed market dynamics created by China’s voracious appetite
for iron ore, over the past five years or so, makes obsolete a system
whereby pricing is locked in for twelve months, based on little or no
transparency.”
›
For an even more succinct comment, consider this online
response to Mr Matthews’s article, from Jinliang Guo: “Chinese
want cheap. But the market does not allow.”
‘The Fortune 500’
With gross revenue as a gauge,
Chinese firms gain, US firms lose ground
Marking the first time in over a decade that a non-US firm has led the
Fortune 500, Anglo-Dutch energy giant Royal Dutch Shell topped
runner-up Exxon Mobil (Irving, Texas) by a margin of $15.2bn in
sales. Moreover, Fortune reported that the number of American
companies (140) making the business magazine’s annual list of the
world’s top 500 companies by gross revenue was the lowest ever.
Japan, with 68 firms, was in second place behind the US.
A feature of the benchmark list, published 8 July, was the presence
of 37 Chinese firms – more than ever before, and with nine new
entries and Chinese incumbents climbing in the rankings. Appearing
in the top ten for the first time was China Petroleum and Chemical
Corp, or Sinopec, the oil giant that supplies some 80% of China’s
fuel. France and Germany – with 40 and 39 firms, respectively –
barely edged out China.
Of the top ten companies, only one was an automobile maker
(Japan’s Toyota Motor Co, with revenues of $204bn), while no fewer
than seven were oil firms: Shell ($458bn); Exxon Mobil ($442.8bn);
Britain’s BP ($367bn); Chevron, of the US ($263bn); Total, of France
($234.6bn); ConocoPhillips, of the US ($230.7bn); and Sinopec
($207.8bn).
Recent financial-sector turmoil can be traced in the disappearance
from the list of these US firms: AIG (insurance), Freddie Mac
(mortgages), and Lehman Brothers (brokerage). Among the rising
US firms are Google (Internet services), Amazon (online sales), and
Nike (sportswear and equipment).
›
The ascent of Chinese firms in the Fortune 500 reflects the
gathering strength of China’s economy. The most recent edition
of Global Trends from the US National Intelligence Council reports
that China is on course to become the world’s second-largest
economy by 2025. According to a 2008 study by the Carnegie
Endowment for International Peace, also US-based, China’s
economy will have overtaken that of the USA by 2035, and be twice
its size by mid-century.
G
lobal
M
arketplace