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China's Strategic Acquisitions: What Would Romney Say on 3Com?
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Bill Gertz of the Washington Times is pouring mud all over the Bain & Co. acquisition of network equipment firm 3Com because it involves Huawei Technologies becoming a minority partner in the deal.
Huawei Technologies, according to Bill Gertz's article is "a Chinese company with ties to Beijing's military and past links to Saddam Hussein's army in Iraq and the Taliban." Much of the same could be said about a good number of US defense firms.
I'm not going to weigh into the veracity of Bill Gertz's depiction of Huawei and its role in the acquisition -- but his claim that this is a "merger" seems a stretch for me.
What does interest me though among those concerned about the vulnerability of America's economic and technological base is why they aren't worried about this every day. America's overconsumption and use of Chinese financing of US debt -- which in a sense is Chinese financing of America's Iraq War and expansion of spending by the Pentagon -- makes America dependent on infusions of Chinese investment into this country.
Perhaps the 3Com acquisition is something to worry about (though it's a yawner to me) -- but in the ad hoc way that America considers such investments amidst America's systemic dependence on financing from sovereign wealth funds in China, Saudi Arabia, and elsewhere is not a strategy. When there is no broad strategic plan that looks at the long term health and sustainability of America's technology and manufacturing sectors, then focusing on a single acquisition is irresponsible and pandering to populist, anti-internationalist sectors in the country.
When we can move to a serious discussion of how to really focus the productive chips of technology, training, manufacturing, and investment in this country -- recognizing some of the fundamental realities of dispersion within a global context -- then we can weigh whether sale of a 3Com type firm helps or hinders American interests. Until then, this is reckless alarmism.
3Com is a Massachusetts firms. I wonder if Mitt Romney agrees with me or Bill Gertz.
-- Steve Clemons
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Reader Comments (3) - post a comment
I read recently that much of internet related technology (chip-level and up) is now manufactured in China and that this would give them opportunity for knowing and exploiting internet's vulnerabilities (if and when needed).
As for 'America': Perhaps someday people who care for 'America' will actually be in charge and take good care of her. Until then 'America' is just an 'asset' to the current ruling class.
At some point the United States must address its gigantic current account deficit. Short of correcting the trade deficit, the US can do this by selling assets of value to our financiers (Japanese, Chinese, and the oil producers). At some point, investing in treasury bonds of a bankrupt government just won't cut it. Currently the US' financiers can be seen as handing the US more rope to hang itself with.
When third world countries got into similar trouble, the IMF stepped in and bailed them out by forcing them to sell off the commanding heights of their economies to Wall Street at bargain basement prices. How much longer can Washington continue its economic mismanagement before our financiers step in and demand the same? Under such circumstances, how could oil majors and defense contractors be exempt?
How typical.
Our polticans have given away the American store for decades and now they find a little doodad they want to hold onto as a keepsake?
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