How China is taking advantage of Coronavirus (COVID-19) Pandemic

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Corona virus has spread around the globe infecting millions of people, and shutting down non-essential businesses. This has led huge number of companies close to bankruptcy. And now China is trying to buy such companies outside of China, specially in India, US, and Europe at a very low price.
A few weeks ago, China reform holdings tried to take control over British graphic chip maker called Imagination technologies. This deal would have gone through except the UK Govt stepped in at last Minuit to block it of national security concern. But anyways China reform owns 1/3rd of Canyon Bridge funding’s who then has shares in Imagination technologies. 
The larger problem here is that many companies in India, US, and Europe are vulnerable for hostile Chinese investment. In 2019 Chinese invested nearly 13 billion dollars in European countries. While in 2018 they invested about 25billion dollar in US mostly in Tech companies. 




 In the long-term China wants to obtain control over the most profitable segments of global supply chains and production network. It aims to systematically acquire cutting-edge technology and generate large-scale technology transfer.
Corona pandemic is a great opportunity for China to buy companies around the world at very low price. Also, we have seen that China is now worlds largest producer of ventilators, respirators and test kits. China has already started using corona for its own economic interests.
Same thing happened during 2008-09 crises when Chinese firms ventured out to acquire discounted assets around the globe, especially those with strategic utility.
 But this time many Govt are aware of such Chinese practices. In US the Govt has woken up to the national security implications of losing sensitive capabilities to China. Similarly,India has updated FDI policies. 



But not all Govts are aware of this as India, US and UK are. Many are falling for this trap such as Italy, Greece and Portugal. And despite US security warnings many European countries are allowing Huawei to develop 5G in their countries. The measure   concern here is that there is no such thing as completely private Chinese company, Chinese communist party controls all the businesses from China. Hence allowing any Chinese company to invest in your country, means allowing Chinese communist party to take control over business in your country. That’s why many countries are keeping eye on Chinese investment during this crises and are figuring out a way to support their own collapsing firms. 



   
      

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