For many Americans, Virginia ham is a long established part of a festive family dinner. But good old American traditions like that can carry new meaning in a global economy. The recent news that Smithfield Foods, owner of leading pork brands like Smithfield Ham, Eckrich sausages, Armour meatballs and Farmland bacon, is to be acquired by Chinese company Shuanghui International Holdings Ltd. caused indigestion for some in the United States.
The $4.7 billion deal, announced on May 30, 2013, would be the largest acquisition of a U.S. company by a Chinese firm. It is another of a series of recent significant global acquisitions by Chinese firms. Other examples include the 2012 purchase of the AMC movie chain by Dalian Wanda Group Corp. of Bejing and the 2013 acquisition, of Canada’s Nexen by China National Offshore Oil Corporation (Cnooc). At year’s mid-point, 2013 promises to be a record year for Chinese foreign direct investment in the United States. It is also indicative of a new focus for Chinese investment : branded consumer businesses.
Chinese businesses, some state-owned, have proven remarkably successful in the global economy. Many American companies in a broad range of industries source their manufacturing activities or components from China. Within a few decades, China has developed into a manufacturing powerhouse, accounting for over ten percent of global exports.
This article is a part of a series written by Michael Czinkota and Charles Skuba. Guest writer Charles Skuba teaches international business and marketing at Georgetown University. He served in the George W. Bush Administration in trade policy positions in the U.S. Department of Commerce.