Chinese investments in U.S. hotel companies spur national security scrutiny
Source: by Michael Hiltzik, LA Times
March 18, 2016, 8:11 PM
The surge in Chinese investments in U.S. hotel companies is starting to raise a question rarely heard in the world of commercial real estate: When does the ownership of a luxury hotel become a matter of national security?
Normally it's not, which may be one reason that so much Chinese capital has been flooding into the U.S. real estate market, especially in California. Chinese bids for U.S. manufacturing, financial and technology companies have been on the rise, spurring more government national security reviews. Until recently, real estate deals haven't raised the same political or security concerns. But that may be changing.
Although the U.S. has been the No. 1 target of Chinese investment capital in recent years, Chinese investment in the U.S. still pales in relation with that from other sources. China ranked only 14th in 2013, well behind such traditional leaders as Britain, Japan and Canada. Yet in recent years, Chinese deals have led the list of those scrutinized by the little-known Committee on Foreign Investment in the United States, or CFIUS, an interagency panel headed by the Treasury Department that screens foreign acquisitions of U.S. businesses for national security implications.
In 2012-14, according to the committee's most recent annual report, 68 of the 358 transactions reviewed involved Chinese investors. In second place were 45 British deals a smaller proportion of a much larger deal flow.
The committee can't veto a deal on its own. But it can ask for modifications or, in extreme cases, refer a deal to the White House for a final ruling. China has had a discouraging record in such presidential reviews: President Obama blocked the purchase by Chinese-owned Ralls Corp. of several Oregon wind farm sites in 2012 on the grounds that some sites were located too close to a Naval weapons station. It was the first such veto since President George H.W. Bush ordered a Chinese government agency's acquisition of Mamco, a Seattle aerospace firm, rescinded in 1990. Committee intervention can shut down deals even without White House intervention; in January, Philips blamed the review committee for the death of a deal to sell its lighting business, Lumileds, to a Chinese company.
Read more: http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20160317-column.html
rockfordfile
(8,709 posts)leveymg
(36,418 posts)Jitter65
(3,089 posts)Kip Humphrey
(4,753 posts)Helen Borg
(3,963 posts)That can be used to blackmail people
Puppyjive
(509 posts)I can't believe they just figured this out. Any large concentration of foreign investment ought to be looked at. The hotel business and convenience stores have been taken over by foreigners. My question is why? Have we made it impossible for Americans to own businesses? Is the hotel business and convenience stores where the money is? Is there a reason they invest in businesses that have a lot of exposure to people? There are lots of businesses for sale, why these two?
highoverheadspace
(307 posts)The country was sold out long. That is why Congresses approval ratings are so low. The whole thing is in a shambles at this point and the rich keep getting richer while the poor get poorer. I honestly think the US as we used to know it is on its last legs. Thats why the media has gone into total propaganda mode.
Phlem
(6,323 posts)Agreed.
Nice to have you on board.
highoverheadspace
(307 posts)It looks more and more like the super wealthy are simply asset striping the world at this point and taking whatever they can wherever they can. I think the only thing that will change anything at this point is an actual physical revolution to take power back, but that requires both sides of the political aisle in the US to wake up and realize they are both being played by those at the top. The election process is broken and information is being manipulated on all fronts. As it goes right now, I won't hold my breath.