If you haven’t heard, China’s sovereign wealth fund CIC bought a 10% stake in London’s Heathrow airport. I was waiting for the usual freaking out and hand wringing over this but then realized that I had made the mistake of using my American brain to analyze the situation.
I’m not suggesting that Brits don’t have their own xenophobia problems. Who doesn’t? But just consider the shareholding structure of Heathrow and then imagine this was a major airport in Washington, D.C., New York or Chicago.
The deal means Heathrow will be more than 40% controlled by the Chinese, Qatari and Singaporean governments, dwarfing the 34% stake held by Spain’s Ferrovial. (Guardian)
I’m not familiar with foreign investment restrictions in the U.S. in this sector (don’t even know how airports are structured), but I would certainly expect that such a deal, or even perhaps a related provision of services transaction, would have major national security implications. You may recall the controversy in 2006 when a Dubai company, DP Ports, attempted to ink a management deal that would have covered six different U.S. ports. Well, that was shut down by Congressional rhetoric, and the company ended up pulling out.
The U.S. is not the friendliest place right now for Chinese capital looking to make a buck in a sensitive industry sector. No chance for deals like this, that’s for sure.