A senior research fellow focusing on the economies of Asia says no one should be surprised by the news of Chinese companies buying U.S. businesses.
The latest deal involves the Chinese industrial conglomerate Wanxiang investing more than $400 million to buy a majority stake in the struggling high-tech battery maker, A123 Systems, Inc. Earlier this year, another Chinese company announced that it was buying the AMC movie theater chain -- a $2 billion deal marking China's biggest takeover of an American company to date.
Dr. Derek Scissors of The Heritage Foundation says, "China has a lot of money to spend. They need a lot of things, and we have some of those things." So he suggests "we shouldn't be surprised by the deals. We should expect more deals in the future, some of which will work, and some of which won't work."
But he points out that China is not investing much in America's $15 trillion economy.
Dr. Scissors does not think AMC was worth $2 billion, and prior to Wanxiang's investment, A123 said it would go out of business within the next few months.
"Maybe Wanxiang could turn it around into something positive, but they're not exactly buying prized U.S. assets; they're buying some struggling companies," he notes. "Now you might say, well, why do we have so many struggling companies? That's the great thing about the American economy -- you're supposed to have competition, and some companies are supposed to fail."
Scissors acknowledges the question of taxpayer dollars being wasted on A123, as a grant was given to a company that could not keep itself afloat before it was sold. But he concludes that is more of a mistake by the U.S. government and is "not really bearing on Chinese investment."