Chinese state-owned companies are “buying up foreign businesses at a record rate this year.” This has alarmed the U.S.-China Economic and Security Review Commission, which was set up by Congress to help monitor U.S.-China relations. It has accused Beijing of “using its huge state-owned enterprises (SOEs) as tools to advance national security goals.” Treating this as a national security issue, the Commission is urging the country to be more vigilant of these Chinese takeovers happening on domestic soil. The Commission recommends Congress to review the Committee on Foreign Investment in the United States (CFIUS) to essentially bar Chinese SOEs from buying up U.S. companies.
According to CNN, China’s growing involvement in the US has been driven by slowing domestic growth and encouragement from the Chinese government. Less bureaucratic red tape for overseas deals is another factor. While Western countries often “welcome the influx of Chinese money,” China is less much less interested in opening up its own industries to foreign companies. In recent times, China has intensified restrictions on foreign NGOs in order to limit Western influences.
Chairman of the Commission Dennis Shea explained at a press conference, “We don’t want the U.S. government purchasing companies in the United States, why would we want the Chinese Communist government purchasing companies in the United States?” As of now, the CFIUS has not proven to be too big of an impediment for Chinese companies since the “vast majority of deals” reviewed by them were cleared.
Written by: Adrian Lo
For more information: