Chinese Companies “Binge-Buy” the World’s Biggest Companies

Chinese companies are targeting the technology and brands of other developed countries through buying overseas companies; and these activities have been on the rise.

On February 3rd, a Chinese state-owned chemical company, China National Chemical Corporation (ChemChina), announced that it was buying the global Swiss agribusiness, Syngenta, at an estimated $43 billion U.S. dollars, which was the highest value offered for any overseas company that a Chinese enterprise has bought.

ChemChina aims to absorb Syngenta’s advanced technology and research into its agricultural chemicals and seed planting. It plans to take over everything: the business undertakings, the company headquarters location, the workers, and the brand. The negotiations for the buyout commenced last year, and in the end, Syngenta gave in, attracted by the Chinese company’s voluminous capital and huge market.

Last year, ChemChina also bought the Italian tire brand, Pirelli, at $7.9 billion U.S. dollars, and so this case is their second one.

The Acceleration of China’s “Binge-Buying”

These cases don’t stop in Europe: they’re also happening in the U.S.

China’s top-class billionaire and Chairman of the Dalian Wanda Group, Wang Jianlin, bought the American media company, Legendary Pictures, at $3.5 billion U.S. dollars.

At the age of 15, Wang joined the People’s Liberation Army, and he worked for the municipal government of Dalian. His father was an executive member of the Communist Party of China, who served as the Vice Chairman of the Tibet Autonomous Region, and is thus well connected within the Communist Party.

At around the same time, Chinese consumer electronics and home appliances company, Haier, announced its intention of buying General Electric (GE) for $5.4 billion U.S. dollars. It took over the workers and the business headquarters, and absorbed the intellectual property and the GE brand name.

The Consequences of Opportunism with Economic Profit

For China, these European and American companies that it has bought have been unimaginably attractive in increasing China’s capital and expanding its market. Of course, it is a natural process for companies to be bought and sold in an environment of freedom and competition; but when the technologies and intellectual property that were cultivated in developed countries get leaked into places like China, it leads to the depreciation of painstakingly nurtured brands and the outflow of advanced technologies.

It also introduces economic interests into the scene, meaning the world will no longer be able to criticize China for its dictatorial government and limited human rights. There is great danger in developed countries becoming more economically dependent on China.

Since Europe and America are geographically distant from China, there is not enough awareness of the approaching crisis from China’s expansions of military power and territory. When Chinese government-related companies buy companies in Japan and within your own countries, you should have cause for anxiety.

Japan’s current consumption rates are in one sense being supported by Chinese tourists’ “binge-buying”. It is indeed good to increase fans of Japanese goods and services, but we must be careful not to let China take our intellectual property and brands. For this, we must tighten our security and not be taken in by ‘easy business chances’ that may appear along the way.