Much Of The Western World Is Waking Up To The Danger Of Letting China Takeover Domestic Companies

The fact that all companies in China are fully subservient to the Communist Party makes investment from China different than investment from other nations.

The tide of China’s investment into the Western World is receding.

While it still remains relatively high in Europe, it has fallen off a cliff in the US – even as investment in the US surges overall.

And even in Europe, investment from China is down nearly 50% from its 2016 peak.

The US has recently strengthened the Committee on Foreign Investment, and has blocked multiple attempts by Chinese companies to takeover American companies.

In the UK and Germany – both once very amenable to Chinese investment – the screws are tightening:

“This month, Chancellor Angela Merkel’s government vetoed for the first time a possible Chinese takeover of a German company, blocking the bid for a machine-tool manufacturer, Leifeld Metal Spinning AG. Berlin is still reeling from the outcry sparked two years ago by Midea Group Co.’s purchase of Kuka AG, a robotics firm, and wants to lower the threshold at which it screens non-European Union acquisitions from the current 25 percent. Even the U.K., keen to cultivate China as Brexit looms, is proposing removing thresholds for small takeover targets, minority stakes, or even the acquisition of intellectual property.”

One notably exception to this trend has been Canada, where the Trudeau government has even let China takeover sensitive national security companies, despite warnings from numerous security officials about the risks to both our national security and our allies. The Trudeau Liberals also altered threshold for reviews of foreign takeovers, making it easier for Canadian companies to be snatched up.

However, a growing public backlash to China’s attempts to takeover more and more Canadian companies forced the government to back down and reject China’s bid to take over the iconic Canadian construction company Aecon – rejecting the bid at the last minute even after approving it every step along the way.

The world has been waking up to the fact that investment from China isn’t the same as investment from most other nations. In China, the Communist Party is all-powerful, and there’s really no such thing as a truly private company. Considering China’s long history of intellectual property theft, and putting tariffs on other countries even as they demand countries knock down their own tariffs to let China’s products flood in, it was only a matter of time before even the weakest leaders in the West faced pressure to close the doors.

Spencer Fernando

Photo – YouTube