We discuss recent cases of Chinese buyout activity in the OECD (especially in the US and the EU) in resource and manufacturing sectors. While most of the buyout attempts have been unsuccessful, they can serve as a catalyst for a wider discussion on the implications for global arrangements over cross border acquisitions. Three specific issues are discussed. The first is the subsidization of purchase raised in the OECD in response to the advancing of low- or no-interest loans by the Chinese Central Bank to companies investing abroad. The second is the transparency of entities involved in the buyout attempt. Most Chinese companies have close ties to the multiple levels of government and are not subject to the standard reporting requirements as required of OECD companies. The third involves national security concerns in the OECD and the possibility of acquiring sensitive technology by Chinese companies when they purchase companies abroad. These issues have not been addressed in the existing OECD/WTO investment policy initiatives and have yet to be discussed in the global fora.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
12072.
Length: Date of creation: Mar 2006 Date of revision: Handle: RePEc:nbr:nberwo:12072
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Find related papers by JEL classification: F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General F20 - International Economics - - International Factor Movements and International Business - - - General F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
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