Money Stuff: Owning Chinese Companies Is Complicated

bloomberg.com

7 pointsmarkus_zhang2 comments

> The idea is that, under Chinese law, it is somewhere between “complicated” and “forbidden” for foreigners to own certain big important Chinese tech companies.

They don't allow foreign ownership of their companies, but they do buy ownership of big western companies (such as Volvo). That sounds a lot like trade war... but that can't be right, the media didn't say anything about a trade war until Trump's tariffs.

"Certain big important tech companies" is an important qualifier here. Volvo isn't strategically important to any country, so it doesn't matter who the owner is. The Chinese government used to consider car companies strategically important, but has changed its stance recently, which is why Hyundai's trucking division and Tesla's Chinese subsidiary are wholly foreign-owned enterprises. Other categories like defense production, mining, electricity generation, education and telecommunication are still subject to restrictions on foreign ownership.

The US, in contrast, doesn't have blanket bans (or blanket approval) based on the industry a company operates in, but has CFIUS allow or deny foreign acquisitions on a case-by-case basis. (E.g. remember when CFIUS ordered Kunlun to sell off Grindr because of its strategic importance?)

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