Diary

China’s Buying Up American Assets. Can We Do Anything About It?

China’s economy has seen better days, but that hasn’t stopped Beijing’s massive state-owned companies from buying up competitors. Looking at the most recent flurry of acquisitions, Chinese firms put in $68 billion in bids to buy foreign companies just this past January. By the end of March, the total of those proposed deals topped $101 billion – close to matching China’s entire total for 2015, which was already a record in its own right. While mainstream media pundits rip on Donald Trump for claiming China is winning, one has to ask – how is Chinese ownership good for America?

Looking at the spending spree China has embarked on this year, $43 billion of that eye-popping $68 billion came from just one bid: the pending ChemChina acquisition of Switzerland’s Syngenta. ChemChina is a state-owned chemicals company, while Syngenta is a global giant in agrochemicals and seeds.

True, Syngenta isn’t an American company, but that doesn’t mean the purchase won’t impact Americans. Syngenta earns a quarter of its revenue on American soil, operating research centers situated dangerously close to military facilities. That in itself should be cause for alarm. Looking beyond industrial espionage, how about some old-fashioned straight up spying? Given the close proximity of the Syngenta seed and chemical plants to these US military bases, it is not a stretch to think a little eavesdropping just might transpire.

The threat of having a Chinese-run business gain access to all the American high tech equipment it could ever need is a threat that cannot be ignored. In the recent past, the Chinese have gained notoriety for industrial espionage, electronic eavesdropping and hacking the US government. Furthermore, Chinese access to the production of American food should be sounding alarm bells somewhere in the White House. Chinese food manufacturers and producers have a less than stellar record in the food safety area back in their own country. Would they suddenly decide to try harder when it comes to our food?

Syngenta supplies seed and chemicals to the American agriculture industry. Fear of a contaminated American seed supply aside, there is the even a danger that chemical plants could become potential terrorist targets. Two Syngenta plants, the St. Gabriel manufacturing facility in Baton Rouge and another one in Houston, are registered under Homeland Security’s Chemical Facility Anti-Terrorism Standards program.

As opposition to the acquisition mounts, the Committee on Foreign Investment in the United States (CFIUS) has been called upon to investigate the Syngenta takeover – the largest-ever Chinese acquisition of a foreign company. CFIUS, which was originally set up by Gerald Ford and further empowered by Congress while Reagan was president, is a gatekeeper agency overseeing the foreign acquisition of American business interests (especially when those acquisitions raise national security issues). The US has long been a favorite hunting ground for Chinese corporations looking to expand their holdings, and CFIUS has been accused of anti-Chinese sentiment for doing its job and investigating the implications. Of course, policymakers on our side maintain that the process is fair. For the record, there has never been any evidence that CFIUS investigations are anything but objective and transparent. Even Syngenta says it welcomes the investigation and has nothing to hide.

Iowa Senator Chuck Grassley is leading the bipartisan call for CFIUS to challenge this latest, greatest chapter in China’s 2016 spending spree. Grassley would also like to see the U.S. Department of Agriculture and the Food and Drug Administration weigh in on the investigation. Agriculture Secretary Tom Vilsack, for his part, has spoken up about the transaction and pointed to the Chinese government’s practices in regulating foreign biotech products. As Vilsack has pointed out, the Chinese regulatory system appears to based more on politics than science. The deal has also raised significant concerns about a potential conflict of interest, since Chinese government would be both regulating biotechnology products and running one of the largest biotech companies at the same time.

The sheer scale of concerns and possible consequences that come with this deal make it a no-brainer that CFIUS is taking a close look. This may be a purchase of one foreign company by another, but both of those companies want to do business in American markets and want control of essential parts of our nation’s food supply. Regardless of how Beijing or Syngenta reacts, there will be very little they can do about the U.S. government deciding (for once) to step up to the plate to protect American jobs, workers, and food production. If both sides of the political mainstream want voters to stop turning to Trump to take on China, it’s high time they showed a little backbone in their own right.