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China, and the Story of the Malicious Foreign Takeovers

Malicious foreign takeovers?! Are we talking about US perceptions of CNOOC’s bid for Unocal, Dubai’s bid for P&O’s US ports, China’s overseas oil investments, or maybe Nanjing Auto’s takeover of Rover in the UK? No…it is the role of foreign investment in China that is causing concern to some in the Chinese government – according to reports quoting Li Deshui, the head of the National Bureau of Statistics.

While no examples of companies were given, sectors at risk (of foreign domination) were said to include beer, soft drinks and skincare products. Li was quoted as saying:

Happily this is not a generally accepted perception of foreign investment – which is still very popular in most officials’ eyes. Another commentator, Shi Jianhuai, a professor at Peking University, noted that:

All cheer the Socialist Market Economy!

Yet another perspective comes from Zhu Min at the Bank of China – which has sold strategic stakes to (obviously non-malicious) foreign banks. He is quoted in the China Daily as saying:

While the foreign “threat” may not be a serious as Li suggests, this sort of language is always intended to deliver a serious message. Policy-makers and businesses should therefore remember that there are two sides to the proverbial coin. As the US and EU are trending towards aggressive protectionism, it may also be a sign of the times that foreign and domestic tax rates in China are set to be harmonized, and that foreign firms have been accused of “immense” tax evasion by a member of the Chinese People’s Political Consultative Conference (CPPCC). The People’s Daily reports:

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