Hacker News Reader

Comment by lispm | Hacker News Reader

The US continues to puzzle me.

China is seen as aggressor in Cyberwar, Chinese hard- and software is accused of having security problems, there are lots of discussions about the more aggressive role of China in Asia, the US has a huge trade deficit with China, China is accused of spying, ...

But the US continues to sell its companies and its business to China and imports stuff from there more and more.

Does the US have an idea what to do to balance the relationship - besides sending the Navy or let bomber airplanes fly over disputed areas?

http://www.reuters.com/article/2013/11/27/us-china-defense-u...

Note the US government needs to approve such deals:

http://www.bloomberg.com/news/2013-02-14/make-it-easier-for-...

View on HN

US companies operate as individual entities. Our government doesn't have end-to-end control over commerce.

The US government needs to approve such deals.

... and that's only a small part of the government.

The US government can't reject them for "we don't like that country" reasons, because that's outside of the scope of its regulatory powers. Regulatory approval of acquisitions is based on competition considerations, not trade war considerations. If they rejected a deal for improper reasons, they'd get sued, and they'd lose.

Is this really the case in the US? Because in Canada, there have been numerous cases of the Canadian government vetoing purchases by foreign companies in the name of protecting Canadian interests and security (e.g. MDA selling to an American aerospace firm, Pot Ash Corp, BlackBerry to Lenovo, etc.)

Or even the case of SEC approval or EU approval for major acquisitions.

I'm guessing there are some national security rules too (and possibly some other specific rules), but the point is that they can't just say, "we don't like China so they can't buy our companies". The government simply hasn't been given that power.

What I'm pointing out though is that their point about "national security" really came down to "we don't trust China"/"we don't trust america". And it passed through Parliament fine because it pretty much had the support of Canadians.

You're right that the legislature can pass any law they want; I was just talking about the executive branch's authority to veto deals directly. I didn't think that--at least in the US--there were instances in which Congress had actually done passed a law like that, and wasn't considering that a relevant possibility. But see Galaxity's comment below refuting that; so I'm withdrawing my argument.

China vetoed Coke buying a local beverage producer over national security concerns.

Nope:

http://www.chinahearsay.com/coca-colas-huiyuan-deal-goes-bus...

http://www.chinahearsay.com/china-ma-never-make-assumptions-...

http://www.chinahearsay.com/little-sheep-deal-approved-can-w...

National security concerns have been cited as a potential roadblock for the deal.

On Huawei's attempt to buy part of 3Com: http://www.businessweek.com/globalbiz/blog/eyeonasia/archive...

Controversy regarding a government report: http://www.telecomreview.com/index.php?option=com_content&vi...

Key quote:

The draft report by the US House Intelligence Committee, obtained by AFP, said an investigation has concluded that the two firms "cannot be trusted" to be free of influence from Beijing and could be used to undermine US security.

It said US authorities "must block acquisitions, takeovers or mergers involving Huawei and ZTE given the threat to US national security interests".

The panel launched its probe over concerns that China could use the fast-growing firms for economic or military espionage, or cyber attacks.

Well the Dubai Ports World issue would seem to imply otherwise. Dubai Ports World was trying to buy Us port management companies. After the executive branch approved it uproar caused congress/House Appropriations Committee to actually vote an amendment to block the deal. DPW eventually had to sell the US operations to an American group (they acquired the us companies through the purchase of a British company). The government wasn't sued over it. So it seems the government certainly can block purchases it doesn't like.

Very interesting; I hadn't known that. After looking it up, I stand corrected. Thanks!

"The US" isn't selling anything as "The US" owns relatively few companies. An international conglomerate, with headquartered in the US, is selling of a small part of its business. It isn't up to IBM to unilaterally act against its own business interest to try to uphold US security policy.

What's irritating to me is that many of the people who claim to be pro-national security and defense cheerlead the whole process of outsourcing our sovereignty piecemeal to China.

They do?

Many American conservatives, arguably the bulk of the mainstream conservative party, have elevated globalism above national independence by embracing libertarian ideas about the role of national governments with respect to international commerce. At one time, conservatives favored reducing unnecessary burdens on international trade, such as tariffs, as a means to the end of greater national prosperity. Today, they quite often deny the very legitimacy of the national government exercising its sovereign powers to manage or limit trade to maximize national prosperity. This represents a fundamental change in thinking with tremendous implications in light of the continued growth of international corporations.

Today, they quite often deny the very legitimacy of the national government exercising its sovereign powers to manage or limit trade to maximize national prosperity. This represents a fundamental change in thinking with tremendous implications in light of the continued growth of international corporations.

And that's a good thing. We don't need governments mucking about, artificially distorting markets with their heavy-handed intervention. Look at where that's gotten us in the past.

National independence? Who cares, "nations" are an outdated idea anyway. I don't want "national prosperity", I want "everybody prosperity" with no regards for where in the world you live and work.

You're entitled to your opinion, but it's a distinctly radical rather than conservative one. And that was the point of my post: to point out the inconsistency in purporting to believe in national independence while embracing radical libertarian and globalist ideas about international markets. Conservatives don't purport to believe that "nations are outdated" and that "everybody prosperity" is more important than "American prosperity."

You're entitled to your opinion, but it's a distinctly radical rather than conservative one.

Yeah, I have no use for conservatives personally.

And that was the point of my post: to point out the inconsistency in purporting to believe in national independence while embracing radical libertarian and globalist ideas about international markets.

Fair enough. I thought you were saying something else.

No they don't, they simply don't believe it's useful in this particular case. American conservatives are happy to support tariffs when it protects their constituents - mostly agricultural and other assorted small business interests.

I really do wish they took the humanist view you describe rather than the tribalist one you promote, but they don't.

Those are the exception, rather than the rule (as a result of the peculiar political power of farming interests, not just in the U.S. but everyone where in the world). Conservatives have embraced business practices that lead to de-industrialization and outsourcing. This has been the result of confusing the means with the ends. Historically, pro-business policies have been a means to the end of greater internal prosperity. But as businesses cross national boundaries, those means are no longer consistent with the stated ends. Policies that favor transnational corporations, even if they might lead to more prosperity at the global level, aren't necessarily those that will maximize prosperity within America.

What world are you living in? There has been no deindustrialization - the US manufactures more than it ever did in the past.

The primary opponents of free trade in labor are conservatives (the laborers likely to be imported are likely to vote against them). Republicans don't generally favor protectionism for industries full of unionized Democrats who vote and mobilize against them. That's not the same thing as opposing protectionism.

Bush was a protectionist, as was Romney, according to both their supporters and detractors.

http://buchanan.org/blog/pjb-george-bush-protectionist-1332

http://mises.org/freemarket_detail.aspx?control=463

http://online.wsj.com/news/articles/SB1000087239639044470900...

The rule is, unfortunately, not a principled for/against protectionism on either side of the aisle. The rule is simply cronyism - protect your allies.

There has been no deindustrialization - the US manufactures more than it ever did in the past.

No, we just redefined "manufacturing" to include everything down to and (probably) including "manufacturing" burgers at McDonald's.

American conservatives are not a monolithic bloc. The initial post-New Deal conservative movement was made by welding together three different groups: traditionalists (social conservatives), libertarians, and anti-communists (national security hawks). This was done mostly in the pages of The National Review, and the ideological bricolage was performed not by Buckley but by another editor, Frank S. Meyer. Check out the book: Kevin J. Smant, Principles and Heresies: Frank S. Meyer and the Shaping of the American Conservative Movement (2002).

Today, business conservatives are differentiable from national security hawks who are differentiable from the Christian right who are in turn differentiable from the Tea Party. National security hawks concerned about China don't always win over business conservatives, and vice versa. But it's a mistake to think of "American conservatives" as a group lacking in internal political diversity.

I didn't say conservatives were a monolithic bloc, which is why I started my post with: "Many American conservatives..." That said, your description suggests brighter lines than exist in practice. I'd say the mainstream of American conservatives are both pro-business but also very concerned with maintaining American power, prosperity, influence, and culture. Heck, a lot of those people are quite religious, too. And that amalgam certainly defines the rhetoric of conservatives in the mainstream, especially as you drill down from national to state-level. The question for those people is: what happens when the interests of trans-national corporations are not aligned with the interests of maintaining American power, prosperity, influence, and culture? Historically, they haven't had to grapple with this question, because within the theory of their worldview, what was good for say IBM was good for America. A bigger, stronger IBM only meant more jobs for Americans and more returns for American shareholders. Trans-national corporations overturn these established assumptions.

IBM is sovereign to America?

IBM is a private company, it isn't owned by the US Government.

US government is one heck of a big customer of IBM though.

Not sure how much in the low-end server market, but still.

Guessing the servers in question (X86) were already manufactured in China anyway.

When we (Sanmina) owned the manufacturing contract for X-series servers we built them in Mexico and Hungary. When we sold the manufacturing contract for IBM PCs (Netvista), laptops (Thinkpads), and X-series servers to Foxconn & Lenovo in 2008, Lenovo was manufacturing in Mexico & China and Foxconn in Hungary (and probably elsewhere). No one has built any PCs or servers in the US since IBM essentially divested themselves of their huge presence in Research Triangle Park. Dell used to manufacture PCs in the US but moved the last of their stuff overseas in 2010. I'm not sure if there is any HP manufacturing in the US, but I suspect not. Dell, HP, Foxconn, Lenovo, Flextronics, and Sanmina all have a large presence in Jalisco, MX, in and around Guadalajara. ... and in/around Shenzhen, Bangkok, Shanghai, Singapore, ....

I believe the first 2 letters of a proliant serial number indicate where they are manufactured. I've seen CN, US, MX, and SG serial number prefixes.

The US government will stop deals that they see as "bad" for them. See the canceled buyout of Sourcefire by Checkpoint back in 2006[0][1]. Though, Sourcefire was recently bought by Cisco.

[0] http://www.securityfocus.com/news/11382

[1] http://blogs.computerworld.com/node/1913

Reply on news.ycombinator.com