Chinese Purchases of U.S. Companies--Posner 's Response to Comments
Many comments imagine scenarios in which, the comment argues, foreign purchase of a U.S. firm would harm the United States. One comment asks whether I would favor allowing Iran to purchase Boeing. The answer is "no," because Boeing is a defense contractor and foreign nations should not be allowed to purchase companies that do highly classified defense work, unless the companies agree to spin off the defense-related parts of their business to U.S. firms. Parenthetically, I do not think that Iran poses anywhere near as great a long-term threat to the United States as China does. China may within a few decades become as powerful as the United States, and both China and the U.S. are Pacific powers. Iran is not a potential superpower and Iran and the United States do not share an ocean.
Another comment suggests that if China owned Unocal it might order it to export all its U.S. oil production to China, and then we would have to buy more foreign oil and so we would become even more dependent than we are on foreign oil nations, many of which are unstable or hostile. But if we are worried about our dependence on foreign oil, forbidding foreign purchases of U.S. oil producers is an extremely oblique response compared to, for example, imposing higher gasoline taxes, which would reduce demand for oil and hence for imported oil.
Another comment states that even if China had trillions of dollars invested in the United States, this would not inhibit it from invading Taiwan. Well, it would certainly increase the cost to China of such an invasion!
Finally and ingeniously, one comment suggests that if China had bought Unocal it could have infiltrated spies into the United States in the guise of oil workers and managers and also exert malign political influence on U.S. government policy. The first concern can I think be dismissed; China has sufficiently extensive business relations with the United States already to be able to plant as many spies in this country as it wants to, and it would certainly not replace more than a tiny fraction of Unocal employees (if that) with Chinese; nor would we permit it to do so.
The second concern has somewhat more merit. Although foreigners are not permitted to make contributions to American political campaigns, in the 1990s the Chinese apparently did make some indirect contributions, and conceivably American middle and upper management of a foreign-owned company might be inclined to make contributions or provide other support to politicians who favored the nation that owned the company. I have never heard of such a thing, however, and I am skeptical that Americans working for a company owned by a nation such as China with which the United States has somewhat tense relations would seek to aid that nation--or even would find a politican wishing to do so for the manager to support. Such a politician would be (moviegoers will recognize) a true Manchurian Candidate!