Beware of China Buying U.S. Assets -- Is It Too Late for America?
As the president and founder of an international financial consulting company that works closely with Chinese companies seeking to go public on U.S. stock market exchanges, I see the enormity of China's global financial influence and power on a daily basis. American assets are at such low historical values, they are prime targets for China. China's international reserves are over $2 trillion and the potential of what China can buy in the United States is colossal. I fear it may be too late for America, but I strongly believe as a nation that we should be significantly more concerned and proactive about protecting our assets.
I'm a proud American businessman and father committed to ensuring a bright future for my children. I grew up hearing and believing that America is the richest and most entrepreneurial country in the world. Today, as I travel to China regularly and see the entrepreneurial zeal and energy of the Chinese, I no longer believe that America is the golden land. We need a collective kick in the pants to help us figure out how to reinvent our economy and rebuild our collective, national self-esteem.
In June, I was interviewed by Fox Business Network's Alexis Glick about China's shopping for assets in the U.S., including their pending purchase of the Hummer brand and sizable stake in U.S. Treasury bills along with former GM Executive and consultant Rob Kleinbaum. Kleinbaum said he believed that the sale was a positive development for the U.S. as it would create more jobs in the U.S.
The idea of Americans selling a major brand such as Hummer and justifying it by saying this sale creates jobs here in the U.S. makes little sense to me. Creating assets and being more competitive globally is how you increase employment in the U.S. You can't sell assets in perpetuity to create jobs. You cannot sell off assets and survive long term.
In addition to talking the talk, we need to walk the walk toward real change. As the United States begins to start legislating that power companies generate more electricity from renewable sources, China has already invested billions to remake itself into a green energy super-power. China is already committed to the ensuring that their transportation infrastructure is world-class with 250 mph railroads while Americans hobble along with old-world railroads.
We will see China buying more and more major US assets over the years to come. Chinese investors who want to buy foreign assets below $10M now face little red tape and are encouraged to apply online while the Ministry of Commerce maintains oversight for the larger transactions. While aspiring American home-owners face almost insurmountable odds to secure a mortgage, and home builders struggle to secure credit lines, the Chinese, who were the fourth largest group of foreign buyers last year, snapped up homes across the U.S. at a median price of $450,000 according to the U.S. National Association of Realtors. We've only seen the tip of the iceberg. China's shopping spree in the United States has just begun.
I believe our best defense as Americans is to embrace the work ethic and values that made this country great. We need to be the most innovative and inventive and strive to continually conquer new markets. The Chinese work day and night to ensure their future is better and brighter for generations to come. Let's embrace that work ethic again here so we can ensure that America is a land of plenty for our children.
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RGE Monitor: “Brazil, China and the New Asian Currency”
You will find the enclosed article, and also the comments following the article about the “New Asian Currency” to be a very interesting and timely reading material.
Here is an article with recommendations about how to restructure the international monetary system to be more relevant for the economic realities of the new world of the 21st century.
“Brazil, China and the New Asian Currency”
Written by Ricardo C. Amaral
Published: RGE Monitor
July 9, 2009
http://www.rgemonitor.com/emergingmarkets-monitor/257250#183003
This article was also published on:
Brazzil magazine in July 9, 2009 - “With US Capitalism’s Demise It’s High Time for Brazil to Adopt the New Asian Currency” – Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/205-june-2009/10207-with-us-capitalisms-demise-its-high-time-brazil-adopt-new-asian-currency.html
You can read the article, and also add your comments about this article on both locations.
Brazzil magazine has about 90 comments following the article so far, and RGE Monitor has about 50 comments.
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So true, unfortunately for us. This constant loss of production jobs overseas has to stemmed. Just hard work and an entrepreneurial spirit is no longer enough. The whole world is onto it, and they can do it at a lower cost. China buying our assets is just one fallout of our decline as a economic superpower. More education specially in the ‘hard’ technical fields, real value-added productive work rather than just buying and selling, a lower sense of entitlement, and a more rational expectation for our future life-style will be required as a minimum for us to remain in the game.
Due to Reaganomics America was treated as a commodity itself, and broken up and sold off as in any hostile takeover...!
There are MORE important elements to owning and running a company than profits. Our forefathers taught us that and that is part of what made America great. It's people. We believed so we contributed all we had.
When we dont believe we wont contribute, we'll just follow the path of the Executives. Chasing the profit margin on our jobs and whats in it for me personally instead of being a whole contributing valuable member of a business community rooted in hearts and minds of our neighbors and fellow competitors.
Instead we're just a bunch of slaves. Sometimes the slaves stop working.
We didnt ask for the wealth. We weren't working to be famous. We dont care about riches. We traded all that for stability and family and dignity of real work. In exchange we pay the proper respect the rich and wealthy industry captains wanted and we looked the other way while their children went to private schools and drove Mercedes to highschool while our kids took the bus or walked in the snow.
We didnt care. We were getting our part of the bargain.
The bargain is over.
The slaves dont like the new deal.
"Our forefathers taught us that "
Our forefathers were also slave owners who ploughed under half a continent and cut every tree within reach of their saw.
And there goes another myth, wiped out by historical reality.
There is a lot of truth in what you have said. The CEO’s and their ilk took a very short term approach to their responsibilities and quickly cashed in their profits, while the rest of the minions like myself continued to conscientiously worked our butt off for the supposedly long-term good of the company. Though I have come to my senses now, I am just saddened by this whole turn of events as it definably does not forebode well for our country.
there is no truth to what he said.
If you are not making profits, just go out of business. unless you are non profit.
WORK ETHIC ?!!!
I'll tell you where the damn work ethic went since you think it's missing. It's not missing we are withholding it.
10 years ago my own company, a large oil industry company publicly announced "....employees should not make plans to retire with 20-30 years in their tenure..."
When corporate America announces they dont have any loyalty to their employees the entire STRUCTURE of capitalism takes on a PAGAN SAXON assault mentality where employees are moving around continuously and without notice or pattern. Quality suffers, Profits suffer and long term investment is miserable.
But HEY !! The execs all make a bonus while the ship sinks.
If you want a good American Economy you first need to get government and the unions out of it. Stop all this government spending because that money comes from our economy. We borrow it now and tax later to pay for it. The unions were good and needed when they first started now they are just pricing the work force out the economy. We now have laws and regulations that cover what the unions use to do. Next have a flat tax on everybody and everything. Our tax plan is so large that no one really understands it.
All I hear liberals saying is how bad business is how they make to much profit and how they survive off the back of your labor. When you get a job you have a contract with your employer that states you will do certain work for certain compensation. If you do not agree to this compensation find another job. You also need to understand where profits go. For big corp it goes to the stock holders which in many cases is your 401K. More profits for business more money for retirement and to expand and create more jobs.
We need government cut to 1/3 its size because everything govt spends comes from the economy. When it spends it means you have less disposable cash and business have less money to hire.
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Fortunately there are assets the USA cannot sell.
For example, the USA has Democratic Principles and strong Human Rights laws.
There are industries that we still lead in as well. For example there is the huge and growing gang stalking industry , which vacuums up huge amounts of protection money and then to justify their money they find the most gullible and harmless person around and proceed to stalk, harass, poison and irradiate that person , sometimes for over a dozen years. The police never interfere.
Also, since we are in recession , there may be an easy way to clear out the national debt:
http://corporate-statesmen.com/images/FAST_2009_NATIONAL_DEBT_SOLUTION.pdf
and a long term way to prevent ourselves from becoming indebted:
http://corporate-statesmen.com/images/AUTOBALANCE.pdf
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"strong Human Rights laws."
um, yeah. Where was this "strong human rights" contingent again? Definitely not here in the good ol' USA
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Ha. Exactly.
I had to rely on patriotic sounding sarcasm to get my comment accepted !
The key seems to be to sandwich your real point between a couple
of sentences of patriotic conformity. The sensors only seem to scan
the beginning and end.
Thanks for the reply.
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What we need is to have the BASICS that all advanced societies have :
- public health care and retirement.
- long term industrial policy
- new trade philosophy
- manufacturing
- regulation of the financial sector, to where it was 30 years ago.
Without these basics, we will go nowhere.
Will the GOP or DEMS provide these essential things ? no
Solution : new political parties, starting in 2012. Alternative ? China takes over.
We're screwed.
You summed it up in two words. The NYT said if Obama had a plan for revitalizing our manfacturing base, they'd like to know what it was. Many people are losing their family business'es they've had for generations. I'm wondering if ever can get out of this deep rut we're in.
If the Chinese offered to buy Exxon-Mobil for $90 a share, I don't think too many American shareholders would complain, considering that it closed at less than $71 today (July 21). I certainly wouldn't have a problem taking my profits.
You are right, it is too late. What is required is a complete rethinking in how this country operates and I do not see that commitment from the youth or the discipline from our elders for us to achieve this goal. Like all empires, we will go out with a flicker instead of a bang. We were destroyed by our own hubris and beliefs in our infallibility. China is keeping the global market going and the United States roll is shrinking and will not recover until we give ourselves a "reality" check. By the time this occurs, our superpower status will be gone and maybe, we can rediscover the morals and ethics that made this country great. Rebirth is not necessarily a bad thing!
I agree ! a rebirth or a new revolution like in 1776.
A Second Republic, with new political parties
Easy done - vote all of them out of office, regardless of party affiliation. Vote in new peple for 4 years then repeat. I bet this will get their attention to works with us, the people, who put them there in the first place. I mean, how much more does it take before we wake up that both parties are corrupt to the core! How blatantly they pass laws to steal our last dollar while they gain!
You mean building the most modern factories and teaching them how to manufacture and sell/steal our products in the hopes their populous grows wealthy enough to supplant the 'murican consumer keeping ceos rich and prosperous isn't working out so well for the rest of us long term? Say it ain't so!!
For every outsourced industry, who flew the coop, and made billions for twenty or so years. Let them offer a new industry, for middle Americans. They should be responsible for trying to destroy America. Greed, with the lack of patriotism, prompted all of this China money assets. Americans have been suffering for at least twenty years loss of industry job's. All big business who cheated in off shore acounts, should pony up an inovative product and plant, so we can recover. The information society is dead and gone. We need real factorys for American jobs.
On off-shore accounts, you might have a point. For the rest of it, sorry, but private interests do not "owe" you anything. Get out of your learned helplessness, entitlement mindset. If you want innovative products and plants, go make them yourself.
And FYI, all my jobs so far have been minimum wage or darn close, so don't even try to tell me I don't understand. I'm realistic enough to know that these types of jobs can't, and aren't meant to provide a comfortable income. That's why I'm getting an education in a professional field. If your job "skills" are such that any other random person can do it or learn it quickly, then you're not worth a high salary. Deal with it. Get better training. Help yourself.
Finally, an American comes forward with a clarion warning of foreign ownership and control. Now go tell it to the President and Congress. The controlled legislators will find a way to defeat any measure that would give our domestic businesses and corporations an opportunity to regroup and build a strong domestic manufacturing and technological base. But we should try to persuade them anyhow.
To claim that we are in a perilous sinkhole is perhaps an understatement of our true condition.
Wow talk about a day late and a dollar short, were you asleep for eight years? When you wake up and smell the coffee you'll find that the entire country has been refi'd by the FED to the RED Chinese. Geithner's out there now peddling some more of our nasty bond debt. You've been hosed.
You've missed out on nothing less than the death of Capitalism but hey, who's gonna notice? You're gonna love Michael Moore's new movie I bet.
Talking about defense of America in this environment is laughably absurd. We brought the Chinese to Gitmo to interrogate political prisoners and gave them carte blanche, but don't allow Congressmen to visit for oversight? two words for you my friend-LEARN MANDARIN.
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