I feel like I am going full dumb dumb here, but: how is this actually bad?
I read: "US government prevents Chines company from owning yet another piece of our ass" excuse the french
Not trying to troll, really interested in what the downsides are.
I read: "US government prevents Chines company from owning yet another piece of our ass" excuse the french
Not trying to troll, really interested in what the downsides are.
As a US citizen, I’d prefer we not sell off all of our assets for short term gain, only to be sharecroppers to China in the long term.
Warren Buffet warned us about this years ago: https://youtu.be/vx5XPvQO4pI
These are not traditional M&A activities. It’s an economic Cold War. The US is not innocent entirely, but we do not pour government dollars into the Rand Corp and go about buying influential concerns in other countries.
Edit: thisisit mentions this is a comment further down:
“> In a document, the US Government Accountability office specifically singled out the rise of Chinese companies with state ties as worthy of more scrutiny, noting that some acquisitions might ultimately be bad for competition.”
1. It's dangerous to have the government picking winners and losers; they can use that power arbitrarily to support or punish political allies/enemies, which creates corruption and economic inefficiency. That's happened recently with even popular, successful American businesses such as the NFL, Amazon, and, potentially, AT&T & Time Warner.
2. The U.S. has only a fraction of the world's resources; limiting access to the rest of the world's resources is like arbitrarily limiting potential investors in your startup to only those in your zip code. Now the U.S. company's investors will have to take the second best offer, if there is one, and the employees and customers also may pay a price. Again, imagine it was your startup and you found a foreign buyer, made a deal you loved - and then the government stepped in and stopped you.
3. Limiting access to those foreign resources limits U.S. business productivity, which raises prices and depresses wages. For example, limits on non-U.S. steel increased the cost of products that use steel and reduced productivity of companies that use it (such as the auto industry, the construction industry, etc.). Effectively, we all could be paying lower prices but instead we are subsidizing less competitive businesses (in this case, whoever buys MoneyGram) with a form of corporate welfare.
4. If the U.S. doesn't buy products and accept investment from other countries, they won't do the same for the U.S. The U.S. is only ~5% of the world's population and ~20% of global economic activity; the largest markets for many U.S. products are China and India (including smartphones, IIRC).
5. There's the fundamental issue of liberty: I don't take it to an extreme, but generally MoneyGram's owners should be free to do what they whether or not their neighbors and government officials like it. (Of course, there are many legitimate exceptions to that.)
But the whole premise is debatable. Why wouldn't we want someone from another country to invest, in MoneyGram or in your startup? What's the difference if they were born on one side of an invisible line in the ground or another? Is it better to have these arbitrary political and economic barriers? Why wouldn't we want someone in China to become wealthy?