[Tzedek]

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.

[omarforgotpwd]

China has a lot of capital and the blocking of sales for national security reasons should theoretically put downward pressure on valuations due to reduced demand for certain US assets. However blocking sales for national security reasons is nothing new, and just "the way it is" for now. Would be great if our relationship with China was as strong as our relationship has traditionally been with countries like the UK and France.

[toomuchtodo]

China’s ambitions prohibit the US and China from being partners (such that the US is with the UK and France).

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

[omarforgotpwd]

I think this economic us vs them mentality is backwards. I'm a US citizen, but both China and the US are populated by humans. In a fair world, Americans should be able to make money in China while Chinese make money in America. If I sell AMC theaters to a Chinese citizen, and use that money to start a self driving car company, is that sharecropping or is it just a deal that both parties found personally advantageous? Does it make any difference to AMCs investment and hiring in the US? Is that Chinese citizen even that much less likely to spend the profits from AMC on US goods and services than an American citizen? Human innovation is not a zero-sum game and separating the world into competing nation-teams actually just holds both parties back, in my opinion.

[toomuchtodo]

Your premise would hold water if the Chinese government was not so entrenched via state sponsorship in its corporate entities, but that’s not the case. China exerts its influence thorough these economic activities, and I argue that the US government does not to the same extent.

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.”

[omarforgotpwd]

Yes, that's true. What i'm describing is a perfect world but what we have in reality is the largest scale market intervention in human history, most likely. An economically and politically free China would reshape the global economy.

[forapurpose]

It's really a question of, 'why is a free market better than a restricted one?'. From a purely self-interested American's standpoint:

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?

[kuwze]

I'd say considering the crazy mergers we're having stateside that this is just another example of sinophobia.

[PunchTornado]

i don't understand why you refer to us as Americans on this thread. as if everyone here is from the US.

[iamdave]

Did I read that comment wrong, to think "US Government" literally meant U.S. (United States) Government?