Actually – many little piggies – not clear if they went to market themselves…but it is clear that they represent almost $5 billion to an American meat processing company from their Chinese counterpart. Bottom line – China has been plagued with substandard food processing issues; way too many people have died; if you have seen the gruesome photo of 16,000 dead pigs in the Huangpu River, the deal and its scope is clear; some feel the deal might be a national security risk to the United States; Smithfield Foods, the company in question, clearly doesn’t think it is; China continues to be viewed with suspicion in many quarters; Congress…Heaven help us…specifically the Committee on Foreign Investment will decide….
Back in the last century when Japan was the 800-pound investment gorilla that kept some Americans up at night, a law was passed that gave the President power to stop or unravel any acquisition of a US company by a “foreign” entity when “credible evidence” existed that a “foreign interest exercising control might take action that threatens to impair the national security,” and while the power seems to be with the President, it’s the committee that really calls the shots.
Hard to imagine how the purchase of a pork processor could “impair the national security” – but there seem to be a number of areas of concern…for example does Smithfield supply the Army or the CIA or other security agency with pork? Or might the Chinese learn how to use the superior pig raising technology and skills of Smithfield and run with it back to China, or worse, might the Chinese be in a position to disrupt the supply of pork to the Unites States, forcing us all to choose a Kosher or Halal lifestyle or at its extreme – if they really killed the supply chain – to become vegetarians?
The deal is big and more importantly has a huge impact on the many companies in the supply chain to Smithfield who will all benefit as the business grows and grows and grows – both in the US and one imagines in China as they learn how to apply the knowledge and wisdom they will buy and finally fix their own home.
Put this into context with Google, Facebook, Twitter and others trying to get a toehold in China and think about the uproar of censorship, self and imposed, that surrounded those efforts and think about the concerns that have been raised about Alibaba looking the other way – seeking to compete outside of China.
All adds up to lots of sleepless nights in the West….
Yet – despite my fascination with this possible transaction (I hope it goes through) my real purpose in highlighting it was because it entered my consciousness on the heels of the terrible tragedy at the LDA Plaza Building in Pakistan that killed eight people.
To me, the contrast could not be starker. In pursuit of cheaper labor (read more profit margin) we don’t think to apply the same rule of law that governs workers in the West or even demand that local laws – as weak and shallow as they might be – be adhered to nor, to be fair, do consumers offer to pay more for those products that they get on the cheap. Yet when the money flows the other way we get protective and reactionary.
So in a world where Asian products are winning at every turn, there is concern about helping China fix its food problem because national security might be compromised and, yes, too bad about all those people in Pakistan.
What are we thinking? Time for Generation World to flex its off-line muscle beyond buying the same products and start fixing the world. To me, these stories show how linked we are; how interconnected our economies are – yet how disconnected we seem to be as people.
“This little piggy went to market, this little piggy went home, this little piggy had roast beef and this little piggy had none…and this little piggy cried weeweewee all the way home…”
Children’s Nursery Rhyme
Way too many people – around the world – are crying weeweewee…and some never make it home…it’s a wake-up call….
Follow both stories to their conclusions and see where you net out….
PS – China is also wary of outside investment…HMMMMM.…
What do you think?