The People’s Republic of China has once again reached into American businesses to control what they do.
This time, it was the proposed acquisition by Cisco Systems of Acacia Communications, both of which are American companies. The PRC condescended to approve this acquisition—subject to certain conditions the PRC dictated.
The PRC also is actively interfering with the American company Applied Materials’ proposed acquisition of Kokusai Electric Corporation, a Japanese company.
Earlier, the PRC interfered with, to the point of blocking, a merger between Qualcomm, an American company, and NXP Semiconductors NV, a Dutch company.
A question that the Biden administration must answer: why do we allow an enemy nation—the PRC—to have veto authority over American business’ decisions such as mergers and acquisitions? I’m not sanguine that the administration will even take on the question, much less answer it in any way favorable to our businesses.
Related to this is why Europe’s nations, the European Union, or Asian nations cede similar authority over their businesses to the PRC.
None of us need the PRC market that badly, especially since the non-PRC Asian markets are readily available, as are those of South America and Africa—the latter two which could easily lose much of their own government graft with the greater economic prosperity that would result from greatly increased trade and business penetration.
These are private companies making these decisions, to be sure. The PRC, though, isn’t only dictating how those companies must operate within its border–a right of any nation–the PRC is dictating how those companies must operate anywhere in the world. The PRC’s vetoes of mergers and acquisitions are global.
In aggregate, such companies’ desperation to do business in or with the PRC at the expense of acceding to the global diktats of our common enemy threatens the security of each of our nations.