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As China’s economic development continues to advance, Chinese companies are making more and more acquisitions abroad. This trend has begun to draw worldwide attention. Reuters data shows that global transactions amounted to $682 billion in the first quarter of 2016, of which 15 percent involved Chinese buyers. What’s more, China’s first-quarter foreign trade total is already approaching last year’s total of $109 billion.
More Chinese companies are choosing to acquire businesses abroad in order to advance technologies and increase global presence. But these companies are now facing increasing scrutiny from overseas regulators.
Data from the Committee on Foreign Investment in the United States (CFIUS) shows that the body reviewed more investments proposed by Chinese firms or individuals than those from any other single country in 2014. China topped the list of transactions related to computers, electronic devices, transport equipment and chemicals for the third straight year.
"Protectionism is gaining momentum in the country as some new candidates seek to raise tariffs and criticize the trade surplus between China and the U.S.," said Geoffrey Sant, a partner at Dorsey & Whitney LLP.
Recently, U.S. Senator Charles Grassley of Iowa, a Republican member of the Senate Committee, suggested that ChemChina's acquisition of Syngenta would pose a national security threat since it would give the Chinese government ownership of a key U.S. infrastructure.
ChemChina's acquisition of Syngenta is nothing more than a business decision, and Syngenta has announced that the acquisition poses no food safety or national security issues, explained Shen Danyang, spokesperson for the Ministry of Commerce, in response to these concerns.
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