Thursday, July 18, 2013

Pork is one of the silliest problems in US-China relations - Arthur Kroeber

Arthur Kroeber
Arthur Kroeber
China-bashing occurs in the odd years, notes China analyst Arthur Kroeber in ChinaFile, because in the even years - election years - US politicians have to focus on problems American really care about. This week, in 2013, the US Senate scrutinized the Smithfield-Shuanghui pork deal, one of the more sillier problems in US-China relations, writes Kroeber.

+Arthur Kroeber:
And as China threats go, the pork problem is surely one of the silliest. Shuanghui International, an arm of China’s biggest and best pork producer, wants to take over Smithfield Foods, America’s biggest pork company. Smithfield is happy to sell, and Shuanghui’s most likely motive is that it wants to learn from Smithfield how to improve the notoriously unreliable Chinese pork supply chain and meet international quality standards so that it can consolidate its domestic market position and increase exports. It’s hard to see how a Chinese company’s effort to clean up its own country’s food safety system, and perhaps increase the globally traded pork supply, could be construed as a threat to U.S. national security. 
Nonetheless, some committee members and their chosen experts gave it their best shot.
Kroeber opposes blocking the deal:
Blocking Chinese takeovers of U.S. firms is a terrible solution. First of all, it would reinforce the already widespread belief among Chinese that the U.S. is engaged in a conspiracy to prevent China’s rise. Moreover, when China blocks innocuous mergers it mainly hurts itself, because it thwarts the efficiency improvements that occur when capital gets re-allocated. One of the big reasons China’s economy is stumbling now, while America’s is slowly but surely recovering, is that China doesn’t allow the free buying and selling of companies, thereby allowing wasteful and mismanaged firms to stay in business far longer than is healthy. This is not an example to emulate.
More in ChinaFile.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

China Weekly Hangout

Dead pigs, floating along the Huangpu River in Shanghai, illustrated earlier this year how serious China's food problems are. The +China Weekly Hangout discussed om March 21 food security and dead pigs with sustainability experts +Richard Brubaker, negotiation specialist +Andrew Hupert and environmental expert +Chris Brown. The ongoing problems will lead to massive food inflation, is one of the conclusions. In the end we (both in China and outside) will have to pay the price for safe food.  
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