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I'm just not sure why hypocrits have any credibility. The free
traders - many of them that change "small government" - say
purchases of U.S. assets by other countries' governments is ok.
"Foreign investment is good. Don't bother me with the facts, I have my ideology."
But
there's this other darned ideology that our government should not own
U.S. companies or otherwise engage in business. I happen to share
that ideology, while also believing regulation is needed to set the
rules of the game.
Why, then, do the free trader editorial boards
remain silent when the China Investment Corporation buys Morgan
Stanley? Why is the strongest comment by politicians in the face
of sovereign wealth fund shopping sprees a call for transparency?
"Let them buy our companies, but make sure we see what they're
doing." Goofy. Impotent.
This article
provides some quotes from the head of the China Investment
Corporation. The humongous China-government-owned company that
buys many Chinese companies and many foreign companies.
The head of China’s $200 billion government investment fund,
seeking to reassure Americans nervous about the possibility of foreign
takeovers, said Thursday that China would invest mostly in portfolios
rather than individual companies — except when a “big fat rabbit” like
the investment banker Morgan Stanley came along.
Nice rule for us - the "big fat rabbit" rule. We should be
docile. They'll not interfere unless the "big fat rabbit" shows
up.
He said he understood that Americans “have concerns about the size
of our capital and also people have concerns about our motives” but
that his fund was established to invest part of China’s estimated $1.4
trillion in foreign exchange reserves, most of which is in
dollar-denominated Treasury securities, to meet Chinese monetary policy
needs.
Chinese monetary policy is the problem. Currency manipulation.
Mr. Lou said it was obvious to him that there could be no political motives in China’s investing practices.
Untrue. The China government's purchase of a 12% stake in Rio Tinto was driven by government economic policy concerns. Ten bucks says Mr. Lou has a copy of "Unrestricted Warfare" on his desk.
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