Should car companies be considered "strategic" national interests?

There have been several reports that Beijing Automotive will make a bid for General Motor's Opel division. Canadian parts company Magna has been considered the front runner to get the GM operation. Because Beijing Automotive is owned by the Chinese central government, it has access to nearly limitless amounts of cash.

There is a great deal of ambivalence among the governments in developed and developing nations as China attempts to buy assets, many of them depressed in value because of the recession. Chinese oil firms are about to loan Brazilian oil company Pertrobas $10 billion. China would lock up a guaranteed supply of crude as part of the bargain. China's metals company Chinalco tried to buy a 19% interest in mining company Rio Tinto (NYSE:RTP). The Australian and British governments were ambivalent about the deal, which eventually collapsed.

Last year, China electronics company Hauwei tried to buy US public corporation 3Com, The US government killed the deal saying that some of the products 3Com makes are not ones it would want in the hands of business interests in the world's most populous nation.

China has unprecedented access to capital after years of running budget surpluses. Many companies outside China need to raise money to improve their businesses. In a tight credit market, that is often difficult to do.

Members of Congress are reluctant to see some of America's most important industries fall into foreign hands, especially those of the Chinese who hope to overtake the US as the world's largest economy. But, how do they explain cutting off money that might go to shareholders or important expansion, simply because the money is from China?

Is it still not clear what a "strategic" asset is? Oil, car companies, metals, technology? So far identifying those interests has been ad hoc, but, as the Chinese become more aggressive, the tensions around rejecting capital from the mainland are going to become much more unpleasant -- especially in a world were capital is remarkably scarce.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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