U.S. Industry Eyed by Chinese Interests

In a move that highlights China’s growing wealth and influence, as well as the susceptibility of American industry to takeover by foreign ownership, two cash-rich Chinese companies placed bids on two large American companies last week.

Last Thursday (June 23), the state-owned China National Offshore Oil Corporation (cnooc) outbid a competing American company in its quest for ownership of Unocal, America’s ninth-largest oil and gas company.

Trumping Chevron Texaco’s offer by $1.5 billion, the cnooc bid was received with mixed reaction in the U.S. Although few expect the bid to go through, “cnooc’s move illustrates … major trends in Chinese economic behavior: the drive to increase energy self-sufficiency through technology, [and] the push to acquire American assets …” (Stratfor, June 23). China’s drive for American assets isn’t confined to the energy sector.

“The Chinese firm’s unsolicited bid comes a week after China’s Haier Group bid $1.13 billion for Iowa washing machine company Maytag Co., and slightly more than a month after China’s Lenovo Group bought IBM’s personal computer unit for $1.75 billion. ‘We can expect much, much more of this,’ Straszheim [chief executive officer of Straszheim Global Advisors, a consultancy with a focus on China] said” (San Francisco Chronicle, June 24).

Many Americans were surprised, even indignant, at cnooc’s bid for Unocal last week. But if they were aware of just how much of America is already owned by foreign firms and investors, they probably wouldn’t have been too surprised. American industry and commerce is currently being besieged by foreign firms seeking to gain a foothold in the American economy.

Once the pride of long years of hard work and industry, corporate America has been infiltrated significantly by foreign companies and investment firms. Amoco, Chrysler, Westinghouse and Pillsbury, for instance, are all owned by companies outside of the U.S. In the publishing industry, a full half of companies are German-owned.

Though widely thought to be American, the following companies are just a few that are actually foreign-owned: Frigidaire and Rheem appliances, all Miller beer products, Trico auto parts, Gerber baby products, Dove, Nestlé and French’s food products, Kelvinator appliances, Genie garage door openers, Super Glue, Mack and Volvo trucks, Lysol cleaning products, Surf and Wisk laundry detergents, Hellman’s spreads and sauces, Alka Seltzer, Pennzoil, Glidden paint, Alpo pet food, Lipton, Browning Firearms, and Wilson Sporting Goods.

“American finance is [largely] held by foreign entities: First Boston, for instance, is owned by Credit Suisse, Republic Bank by hsbc Bank USA, Dillon Read by Union Bank of Switzerland, the Kemper Corporation by Zurich Insurance, and Bankers Trust by Deutsche Bank “(Newsmax, May 22, 2003).

The extent of foreign ownership is more apparent when viewed from the vantage point of individual states, cities and counties in America. Tennessee, for example, lists 234 firms or subsidiaries owned by foreign concerns doing business within the state. Many of these are nationwide concerns. One county, Fairfax County, Virginia, lists 292 foreign-owned firms doing business in the county. Greensboro, North Carolina, lists 95 foreign-owned major businesses in the city.

In a 2002 report to Congress the U.S. China Security Review Commission highlighted the amount of money being spent by foreigners on the acquirement of U.S. companies. “Over 90 percent of the fdi (foreign direct investment) attracted to the U.S. was for the purpose of acquiring ownership of existing U.S. businesses …” (ibid.).

In light of just how much American industry and commerce is already owned by foreign firms, the idea of Chinese firms owning key American companies isn’t out of the realm of possibility. It is, however, a very troublesome trend. Bible prophecy speaks of the dangers involved with “the stranger [or foreigner] that is within thee” gaining a financially advantageous position (Deuteronomy 28:43-44).