U.S. lawmakers are wary of China's business "shopping spree." (Photo : Getty Images)
China continues its shopping spree as more Chinese companies buy out firms overseas, leaving the United States wary.
According to the Business Insider, U.S. legislators are troubled at the rate of how Chinese companies are going on a record-breaking series of acquisitions, particularly American companies that are involved in developing technologies.
What is more interesting is that this trend is expected to continue, according to Henry McVey of the private-equity company KKR.
"Without question, this trip's dominant view centered on the desire by many Chinese business leaders to acquire companies, properties, and experiences outside of China," he said in a statement cited by the Business Insider.
China's Shopping Spree
According to Bloomberg, the Asian giant appears to be "playing the white knight" for U.S. firms that are intent on cashing out their businesses.
"Already this year, Chinese buyers have proved they're willing to pay high prices for U.S. targets--often outbidding domestic suitors--even as equity markets in both countries swing wildly," the outlet noted.
The outlet emphasized that Chinese companies have already spent billions in acquiring over 63 percent of 2015's entire annual acquisition volume.
Among the most notable acquisitions include China's Haier Group Corp. procuring General Electric Co.'s appliance unit in January for $5.4 billion, a hefty amount compared to other bids.
Dan Clivner of the Sidley Austin LLP said that China pursues this course of action because business owners know it can make their money grow bigger domestically.
"Chinese companies are willing to overpay for something in the U.S., because they can grow that business domestically and have access to a market that's able to support the valuation. They're building blocks," he said.
U.S. Worries
According to McVey, a number of the acquisitions are targeted at bringing in more firms "with customer knowledge, global supply chains, distribution networks, and superior intellectual property."
"If we are right, then we should expect more outbound global M&A by China in the near-term as well as more global pricing cuts in the long-term," he added.
This has made American lawmakers worried as Sen. Sherrod Brown of Ohio and Sen. Chuck Grassley of Iowa deem it a possible threat to national security.
"Because the food and agriculture sectors are part of the nation's critical infrastructure, this merger raises questions about the potential national security implications," Grassley was quoted as saying by the Financial Times.
Grassley's concerns were centered at ChemChina's bid to acquire the Swiss seed-making firm Syngenta, whose biotech division is based in the U.S.
