Congress is wary of Chinese deal for Chicago Stock Exchange
Dozens of members of Congress plan to ask the Obama administration to review the planned acquisition of the Chicago Stock Exchange by a Chinese firm, to assess whether it poses a national security risk or a risk to the companies traded on the exchange.
The Chicago Stock Exchange announced this month that it would be sold to a consortium led by the Chongqing Casin Investment Group of China, a move that would inject needed resources into the exchange and give the Chinese firm a foothold in the $22 trillion U.S. equities marketplace. Chinese state media reported that the deal was meant to eventually bring more Chinese firms into the U.S. market and that U.S. technology could be used to open new exchanges in China, a potential win-win for both sides.
On Wednesday, a group of several dozen U.S. lawmakers plan to formally request that the Obama administration conduct a national security review of the deal through a process known as the Committee on Foreign Investment in the United States, or CFIUS.
“The American market has little information about CCEG, and it shares many of the traditional opaque qualities of a Chinese company,” said a letter from 45 Republicans and one Democrat to the members of the CFIUS board, which is led by Treasury Secretary Jack Lew. “While it is unclear the level of influence the state holds over CCEG, the firm is involved in a number of important Chinese sectors that would likely require close ties to the state.”
The company was created by the Chinese government in 1997 to absorb state-controlled assets, the lawmakers wrote, and the firm’s chairman Shengju Lu still has ties to the government of Chongqing, a city in southwestern China. The letter asks the administration to rigorously investigate the company’s ties to the Chinese government.
In the age of Donald Trump, when Americans fancy themselves victims, favor building giant walls and revel in insults hurled at key trading partners, China’s bid for Chicago Stock Exchange is a non-starter.
Purists will take exception to my use of “China.” Chongqing Casin Enterprise Group, they’ll argue, isn’t the Communist Party. And they’ll be wrong, at least to lawmakers facing elections amid rising American isolationism. Trump captured the zeitgeist, declaring, with all the incredulity he could muster, “take a look at what happened just this week — China bought the Chicago Stock Exchange! China!! A Chinese company!!!” It was part of a rant that “they’re taking our wealth; we’re going to bring that money back.”
In 2013, Congress blocked a Chinese company’s bid for hog producer Smithfield Foods. If Capitol Hill links pigs with national security, it certainly won’t let mainlanders buy a stock bourse in the No. 3 U.S. city. Yet this is also a moment for China Inc. to look in the mirror and consider its own culpability as Washington frets its designs on America.
In a letter to the U.S. Committee on Foreign Investment, 46 Congress members warned that Chongqing Casin bears the “traditional opaque qualities” of a mainland entity with close government ties. Party bigwigs in Beijing are free to object to that characterization; so is Chongqing Casin Chairman Shengju Lu. There’s only one way to alter perceptions virtually all Chinese companies are in the government’s pocket: create a genuine private sector.
“The Chicago Stock Exchange announced this month that it would be sold to a consortium led by the Chongqing Casin Investment Group of China, a move that would inject needed resources into the exchange and give the Chinese firm a foothold in the $22 trillion U.S. equities marketplace.”
from the west to the east..again..
“46 Congress members warned that Chongqing Casin bears the “traditional opaque qualities” of a mainland entity with close government ties.”
i think most big chinese companies are state backed..thats not really news is it?
due diligence or use of xenophobia to scare the sheeple?