Thursday, February 23, 2006
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Freaking out about takeovers
It should be pointed out that the United States is not the only country currently wigging out about foreign direct investment. This seems to be the theme du jour across the globe. Some examples:
1) As much as Americans might not be thrilled with Google's new China presence, it appears that some Chinese aren't pleased either. Philip P. Pan reports for the Washington Post:As much as trade deficits trigger protectionist backlashes, there's something about FDI that generates even more nationalism.A state-run newspaper reported Tuesday that Google Inc. is under investigation for operating without a proper license in China and quoted an unnamed government official as saying the Internet giant needs to cooperate further with the authorities in blocking "harmful information" from its search results.Google has since received is licence, but only after indicating that it was "'willing to receive guidance' from the authorities."
Why? My hunch would be that it is easier to freak out about concrete examples rather than abstract statistics, and the FDI situations are all about individual takeovers. Plus, despite pretty strong evidence to the contrary, there is still a belief that a foreign firm will act as a willing and enthusiastic agent of the home country government (though, to be fair, this suspicion might be a bit more justified when you're talking about a state-owned company).
A question to readers who oppose the port deal -- what do you think of the Euro-reactions? Are they overblown or thoroughly rational?posted by Dan on 02.23.06 at 05:54 PM
Overblown, without a doubt. I can see why small countries that have had unpleasant experiences with foreign companies ( or are concerned about bribery of local officials) would be apprehensive. No reason for the European countries to be so concerned except for in rare cases where security is involved.posted by: erg on 02.23.06 at 05:54 PM [permalink]
Wrote a long response on my blog:
You forgot te Arcelor/Mittal Steel deal.posted by: bartman on 02.23.06 at 05:54 PM [permalink]
I'm commenting even though I do NOT qualify, r.e., "A question to readers who oppose the port deal -- what do you think of the Euro-reactions?"
My thoughts posted here.
It is not about FDI.
It is about security.
No one cares if overseas interests buy a steel mill in Ohio, heck, it usually improves the management.
It is about security.posted by: save_the_rustbelt on 02.23.06 at 05:54 PM [permalink]
I think the issue of foreign ownership and its affect on national identity, culture, security interests, the long-term economic strength of the host country, etc. are issues that don't get discussed nearly enough as the world steams along on the globalization jugernaut.
The opposition to the port deal is undoubtably, in part, an expression of the fear of that. And I must say that fear would probably not be as great if some bright minds would spend more time looking ahead at where this train is taking us because right now it's a big unknown and big unknowns scare people.posted by: DS on 02.23.06 at 05:54 PM [permalink]
question to readers who oppose the port deal -- what do you think of the Euro-reactions? Are they overblown or thoroughly rational?
Huh? America's ports are without question the most vulnerable part of the nation's security infrastructure. Port "security" is nonexistent. And Dubai is the central conduit for money flows by the criminal organizations that exercise huge influence across a failing state with the largest and most poorly-secured WMD arsenal on the planet, ie Russia. Russian mafiya + Dubai + US port security = risk. Again, why add to what are already enormous risks with our ports infrastructure?
As to your q, Dan, could you please explain what exactly an intra-European energy deal has to do with the US giving control of the most vulnerable links in its national security fence to the nation that launders the Russian mafiya's money? I don't see the link. (Then again, I'm not a xenophobe, and I'm totally in support of free trade and cross-border investment; I just happen to know a bit about Russian capital flows and the relationship between Russia and Dubai.)posted by: thibaud on 02.23.06 at 05:54 PM [permalink]
On a case by case comparison it's really about two things concerning the port deal that aren't involved in the others.
"Pakistan has been a good ally in the fight against global terrorism says the administration. Doesn't mean we should hire a Pakistani state owned security firm to guard our borders or patrol our airports."
Yes, but suppose the Bush administration *did* choose to contract out our border defense to a pakistani firm. Wouldn't Drezner then claim that the we should support the deal, unless somebody came up with solid reasons that showed they'd do a bad job of it?
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