Understanding the power of one

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The magnitude and size of the changes we face and will face are Everest in nature. For example, who could have imagined in early 2004 that later that year a company virtually unknown outside of China (Lenovo) would buy the PC business of IBM? In capital terms (at $1.25 billion), it may not have been the biggest acquisition for the year, but in terms of the news splash it was enormous in size. In the same vein, but on an even bigger scale, who in early 2005 would have predicted that NCOOC (Chinese National Offshore Oil Company) would have launched but then lost an $18.5 billion bid for Unocal?

We draw the Lenovo and CNOOC examples from China not because China is the only big change in recent times, but because it is a great example of the size of changes we are experiencing. For example, from 2000 to 2006, not only did foreign direct investment in China more than double to more than $65 billion, but China sucked in nearly 9 out of every 10 foreign dollars, euro, or yen that were invested in all of Asia. In late 2006, the largest IPO ever occurred when Industrial and Commercial Bank of China (ICBC) simultaneously listed its shares on the Shanghai and Hong Kong stock exchanges and pulled in $20 billion! In fact, in 2006, it was the largest IPO market in the world.

As we said, while China is not the only big change out there, it does illustrate the size of changes that have happened recently and will likely happen in the future. China’s rise has rippled through all sorts of sectors, including ones that may not get the press that ICBC’s IPO did. For example, the large shipment of goods from China to the U S but the relatively smaller amounts shipped from the U S to China has spawned a new business in California—container storage. There are so many empty containers piling up in California that real estate agents and landowners are making good money simply storing the empty containers on vacant land. In fact, in some cases, the containers are stacked so high that they block the views of homeowners living next to these “temporary” storage facilities.