Anshan Steel Throws in the Towel, For the Moment
Score another one for the xenophobes and China Bashers. You may recall a post I wrote early last month on the proposed investment by Anshan Steel in the United States. They wanted to purchase a minority position in a Mississippi rebar plant. Red flags immediately went up in D.C.:
A bipartisan group of 50 US lawmakers called on Friday for an investigation into whether a Chinese investment in the US steel sector should be blocked on national security grounds.
The Congressional Steel Caucus, in a letter to Treasury Secretary Timothy Geithner, said it was “deeply concerned” the recently announced joint venture between Anshan Iron and Steel Group’s and the Steel Development Co also threatened American jobs.
As my post pointed out, this whole thing was ridiculous. The critics went so far to say that Anshan Steel might get access to high tech via the investment (remember, this facility makes rebar).
Fair enough. It’s an election year, there’s a lot of unemployment in the U.S., it makes sense for these protectionists and China Bashers to take their shot. I assumed, however, that once it became apparent that the claims made were laughable, the deal would go through.
Of course I was wrong:
Angang Steel Co (Angang) said Thursday that its parent, Anshan Iron and Steel Group (Ansteel), may postpone plans to invest in a US steel plant because of objections from US lawmakers, Reuters reported.
Optimists will say that this is a strategic move to let things settle down until the election is over, and that perhaps later in the year or early next year, the deal will get moving again. I’m going to go with that theory until I hear otherwise, but it’s still sad that the delay was necessary in the first place.
Well, it’s back on baby!
Yes, apparently Anshan Steel’s comments were “misconstrued.” Heh heh. Things change so rapidly in China, it’s difficult to keep up.
Are Chinese companies perhaps too affected by the political hogwashing of Congress? I don’t follow this area too closely, but it seems like (a) a Chinese company wants to buy an American company, (b) some Congressmen get “outraged” for political and election reasons (and not for actual good reasons), and then (c) the Chinese company pulls out. But, does it really matter what some Congressmen think?
I might be wrong, but I’m wondering if this Chinese reaction is different than say the reaction of a company from a democratic nation that understands and is familiar with such politicking. Perhaps, because of Chinese communism, Chinese companies don’t understand that these Congressmen are just blowhards trying to get re-elected, and in turn gives them to much deference.
No idea with Anshan Steel, but I recall that with the 3Com deal, there were some heavy hitters hired as consultants, both PR folks and D.C. lobbyists/lawyers. One assumes that these were the guys that told Huawei to pull the plug.
For Anshan, I guess this will go forward at some point. But yeah, it’s hard to believe that these blowhards could actually do anything to stop an investment in a rebar factory. It’s just incredible on its face.