I was interviewed yesterday by the Financial Times regarding the proposed acquisition of IBM’s laptop division by China’s PC giant Lenovo. Their most recent story on the deal is linked below. My quotes may have fallen on the editor’s floor or may appear in a future article, but as the FT indicates my major point is affirmed: politics continues to influence the global markets.
This is anathema to strong advocates of globalization but is a theme I have highlighted in my research, most notably in my article on the IPO of Chinese oil giant PetroChina (scroll down for a link). I have identified four different political forces that are jostling for influence in the financial markets and the cross border mergers and acquisition markets:
1) neo-liberal advocates of a laissez faire, or “invisible hand,” approach to corporate transactions;
2) national interest advocates (like Rep. Duncan Hunter quoted in the FT) who want the U.S. government to be more aggressive in reviewing deals for their impact on national security;
3) neo-mercantilists who largely operate in the government bureaucracies of developing countries (and are likely the forces behind the push by Chinese companies into the global marketplace); and
4) the new internationalists that includes labor, environmental and other NGO type forces attempting to reshape globalization to take account of the larger social cost of market forces.
All but the last are present in the IBM-Lenovo deal and thus the fortunes of this deal merit close attention.
FT.com / Business / Asia-Pacific – IBM’s $1.7bn China deal could threaten American security, say US politicians