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Bloomberg: in Front of Chinese investors around the world closed doors
Material posted: Publication date: 22-08-2018
Chinese investors — new issues in the field of investments in developed economies. The President of the United States Donald trump signed a new decree that tightens eligibility rules for Chinese investors to us companies. Now the controlling bodies of the USA, and we were able to monitor such transactions, according to Bloomberg.

developed countries closed the door not only for Chinese investment in technology, but, perhaps, for a wave of transactions on acquisition of shares of companies of different technological elements, such as smart heaters and robotic lawn mowers.

President Donald trump last week signed a new law to the Committee on foreign investment U.S. (CFIUS), which expanded the powers of the control Committee, allowing him to control even for a minority, passive investments in three areas: key technologies, infrastructure and businesses that are processing personal data. The rules began to tighten some time ago, but now the restrictions clearer.

The attempt of containment

Just ask Jack MA (Jack Ma), who earlier this year was forced to abandon attempts to win approval of purchase of financial division (of the company) "Ant financial" (Ant Financial), the American payment service MoneyGram (MoneyGram International Inc.). The reason for this were concerns CFIUS related to the fact that "criminals" can obtain data about U.S. military personnel who use this payment service. Or ask the management of the company "Broadcom" (Broadcom Ltd.), the claim that the purchase of the company "Qualcomm" (Qualcomm Inc.) over $ 117 billion was rejected by trump after the Committee expressed concerns that the deal and the inevitable cost reduction after the merger of the companies will help to cope with the technical problems of the Chinese "Huawei technologies" (Huawei Technologies Co.).

But these changes in the law expanding the authority of CFIUS, and still mean something.

Early "notice to the CFIUS was voluntary — at least until CFIUS had not applied himself," says Rod hunter (Rod Hunter), a trading partner of the Washington firm of Baker & McKenzie LLP. Now the acquirer is planning to invest in an American company that produces a little bit of "smart" products, is subject to scrutiny.

In all this there is a lot of unknown: what kinds of "personal data" vulnerable in a world where almost all companies to move forward, should seek to monetize such information? If all the information is a critical infrastructure facility as to whether the encroachment on her China unnoticed? Could today, "khayer" (Haier Group Corp.) to a couple of years ago, the authorization for the purchase of units, "General electric" (General Electric Co.) household appliances (partly to use embedded American company smart home technology)?

China's problems are not limited to the tightening of the protectionist policy of the United States or similar positions of Australia and Canada. Becomes much tougher and Europe, which has recently become (for China) favorite place.

Presence in Europe

This month, the government of Chancellor Angela Merkel for the first time vetoed a possible purchase by China of the German company, dismissing the application for purchase of the company "Leifeld Metal Spinning" (Leifeld Metal Spinning AG) producing machines. Berlin still has not recovered after a violent backlash, due to the fact that two years ago, the Chinese company "Maidi" (Midea Group Co.) I bought the German "cook" (Kuka AG), a manufacturer of industrial robots. Germany wants to reduce from the current 25% of the lower limit at which it checks the purchases of companies by acquirers from countries not members of the European Union. Even the United Kingdom, interested in the approach of Breccia in the development of relations with China, proposes to remove restrictions to control the merging of smaller companies, acquisition of non-controlling stakes, and even the acquisition of intellectual property.

This does not mean that Beijing will have to abandon its strategy of "Made in China 2025". As written by my colleague Noah Smith (Noah Smith), the creation of joint ventures is still the way to purchase the desired technology. And when all other methods are ineffective, China can use its own antitrust levers. You can blame it all on trade conflict, but it's hard not to notice the connection between the veto trump in the merger "Broadcom" and "Qualcomm" and the failed attempt of the American semiconductor manufacturer to obtain this summer, the approval of China on the acquisition of "al-Ex-PI Semiconductors" (NXP Semiconductors NV).

The fact remains: China has not so many ways to bring the necessary technologies. This drives Beijing to a standstill, putting pressure on him, demanding to play by the rules and open its market to the rest of the world.

China has promised that it will be allowed to invest in your financial sector after wall street for decades expressed their dissatisfaction. Now Beijing facilitates the conditions for the acquisition by foreign buyers of controlling stakes in local public companies operating in many industries. In the end, it can be considered a kind of mutual regime sought by Western countries. However, Chinese investment doors to the world while closing.

Gopalan Niche (Nisha Gopalan)


Tags: economy , China

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