Chapter 401 US Foreign Investment Commission

Baker was moved to the point of hearing Yang Xing's offer. His immediate boss, Lawrence Summers, is a famous scholar in the American economy. His ability to serve as the Secretary of the U.S. Treasury is inseparable from his predecessor and his mentor. He just stepped down as former Treasury Secretary Edward Rubin. During Edward Rubin's tenure, the US government turned the fiscal deficit into profit for the first time since World War II, and praised him as the most outstanding "Treasury Secretary" in American history. He has always been very popular.

As a disciple of Rubin, Summers certainly wanted to be better than his teacher, but Rubin's great achievements were ahead, and it was difficult to surpass him. The position of president of Harvard University would indeed allow Summers to surpass his teacher in a new field. American officials at his level are no longer interested in material pursuits. Being able to leave a name in history and gain reputation is their goal.

This time, Yang Xing paid a lot of money to participate in the dinner party of the top economic elite in the United States. The ticket price of this lunch party was no less than hundreds of thousands of dollars, and he didn't want to return without success. This time he opened up the relationship between Paulson, the chairman of Goldman Sachs Group. Without being able to give Summers bribes directly, he started from his chief aide Baker, who was beside him. Although the level of the U.S. officialdom is not high, it refers to direct bribery beyond the scope permitted by law. In fact, American politics is filled with the smell of money. Summers does not seek wealth, but seeks fame, so Yang Xing gives him opportunities. Baker knows this hidden bribery.

Yang Xing sent Zhang Shengli away and asked him to talk to Buffett, while he discussed the details with the moved Baker. Seeing Zhang Shengli and Buffett having a happy conversation, he thought that next year, Buffett would take out the lunch party where he steak was here and auctioned directly, and the auction money was donated to charity organizations. In order to get the opportunity to talk about his experience with the "stock god" in his mind, the auction price of the lunch party rose year by year, and finally it rose to a sky-high price of two or three million US dollars in one lunch. Now he asked Zhang Shengli to talk to Buffett, and he felt that this time it would give Zhang Shengli this great benefit in vain, and in the future, Zhang Shengli should understand how much favor he owes him!

Yang Xing's purpose of finding Baker this time was to report the large project business department of the group headquarters. Several large-scale acquisition plans of the group that he actively promoted in the United States were stuck by the U.S. Foreign Investment Commission. As Baker said, the committee has great power. Once his acquisition plan is completely rejected, all previous efforts will be wasted directly affecting his development plan for the US market. Therefore, he wanted the Treasury, which is the most important part of the committee, to change the minds of the committee members, and the task is quite arduous.

The CFIUS is a specialized department in the United States to manage foreign investment. It was established in 1975 and is mainly responsible for evaluating and monitoring the impact of foreign investment on US national security. However, its operation details have never been disclosed to the public and have been unknown until the 1980s. In 1988, in order to deal with the large-scale acquisitions of American companies by Japanese companies at that time, the US Congress passed the revised "Exxon-Florio Act", the Exxon-Florio Act, which quickly became the basic law for the United States to regulate foreign investment mergers and acquisitions and protect national security. The CFIUS is the one who runs the law. They use this law as the basis, revealing their sharp minions and establishing a complete set of strict approval systems for foreign investment.

Generally speaking, after accepting a letter of intent for foreign investment, CFius will consider whether to review and pass the investment project from three factors: whether it involves the US defense production capacity, whether it involves the sale of military technology to specific countries, and whether it affects the US's technological leadership in the field of national security. Among them, the definition of the concept of "national security" is extremely broad, and cfius's review of investment from countries with fierce competition and ideology that are different from that of the United States overseas, CFius will be more strict.

The workflow of cfius is that after receiving the application for foreign investment, the committee will conduct an investigation in 30 days. If the members unanimously believe that there is no security threat, the agreement will continue to be implemented until then. But even if only one member opposes, the committee must conduct a formal investigation lasting 45 days, and then make suggestions to the president on whether to prevent the acquisition, and the president will then make a decision within 15 days. The only president in history who has rejected foreign investment mergers and acquisitions was Bush, who in 1990 rejected China Aviation Technology Import and Export Company's merger and acquisition of Seattle aircraft parts manufacturers!

In the acquisition plan launched by China Star Group in the United States, Nebula Electronics acquired Cyrix, the world's third largest chip manufacturer under USS Semiconductor (NS), and StarChief Manufacturing acquired three manufacturing bases in Southeast Asia and StarWire Resources and the US General Electric (GE) to jointly develop high-power gas generator sets, which were hindered by the committee's review. In May, the US air strike at the Chinese Embassy caused one to be destroyed and one injured. The atmosphere between the two countries was very tense. Against this background, the future of these acquisition plans of China Star is uncertain, and Yang Xing, who was originally planning to return to China, had to personally solve this problem.

Finally, Zhongxing International has played a role in the foundation and network of people established in the United States in recent years. There are employees in the United States who suggest that this is already a political dispute. Can it be resolved by the lobby company in Washington? Lobby companies are a special product that was born under the democratic system of separation of powers in the United States. The main job of lobby companies is to send a large number of lobbyists to the US Senate and House of Representatives with legislative power and government departments with relevant administrative resources to conduct unremitting lobbying. The relationship network of lobby companies is quite large and complex. From the US president to the state and county councillors, it is simply a work of all-round and three-dimensional penetration. The release of every major policy in the United States is faintly floating behind it.

Zhongxing International found one of the most famous public relations strategy companies in Washington. Their suggestions were that Zhongxing Group and the Chinese government should draw a clear line, showing that Zhongxing Group is a pure private capital company, which is easy to deal with. When Yang Xing first founded Zhongxing Group, he was cautious and not involved in government business on the surface. The group even had few bank loans in China. Except for the US$8 billion credit guarantee of the Export-Import Bank of China when acquiring Shanyi Securities, it needs explanation. Just from the outside of the company, Zhongxing Group has always been a complete Hong Kong multinational company and has basically nothing to do with the Chinese government.

Second, Zhongxing Group not only wants to lobby itself, but also can find partners or investment governments to help lobby together. It shows that Zhongxing has brought a large number of jobs to Americans in the United States and has brought cooperation opportunities to many American companies. The research institutions invested and built by the group in the United States can also improve the scientific research level of the United States and describe the various benefits brought to the United States after the successful acquisition.

As Goldman Sachs, which has cooperated with Asian financial crisis and StarDong Network listing, has strong strength. Yang Xing accepted the suggestion and directly entrusts them to serve as financial consultants for these mergers and acquisitions. Under the temptation of high commissions, Goldman Sachs President Paulson personally took action, not only helping Yang Xing find the weakness of CFius, but also building a bridge for Yang Xing and found Baker, the chief aide of the Minister of Finance.

After listening to Yang Xing's suggestion, a trace of intention appeared on Baker's fat face. Yang Xing knew there was a way, so he took the opportunity to add fire and said: "I know that former Minister Rubin has always wanted to untie Wall Street and cancel the financial controls of the Grass-Stigeller Act, but it was not successful until he left office. The Financial Services Modernization Act, which was being promoted by Minister Summers, undoubtedly fulfilled this idea. Our company is willing to provide financial support to fully support the passage of the bill." This sentence undoubtedly became the last light grass that broke the camel's back. After hesitating for a while, Baker finally nodded to help Yang Xing lobby CFius with all his strength, and gave detailed instructions on how Yang Xing how to manage other departments and individuals in CFius.

Yang Xing sighed, thinking that this high-priced lunch meeting was finally worth the fare. The details of the internal operation of cfius have never been known. Even if Baker cannot guarantee that he will convince everyone in it, the inside information about cfius he revealed made Yang Xing feel that he has gained something and can calmly arrange it in a targeted manner without any disgrace. Obviously, for Minister Summers, being able to pass the Financial Services Modernization Act was the top priority in his career, and he would sacrifice principles to help Yang Xing.

The Financial Services Modernization Act was a case that was fully promoted by former Treasury Secretary Rubin during his term. Before 1997, American commercial banks were strictly regulated and did not allow cross-border. In view of the risks of the Great Depression in the 1930s, the US Congress passed the Grass-Stigeller Act in 1933, establishing a firewall between banks and securities businesses. Although it avoided risks, it also suppressed the development of the US banking industry to a certain extent.

The main content of this bill is that it does not allow the merger of banks, securities, insurance and other related companies in the United States to operate. Banks can only do banking business, investment banks can only buy and sell securities, cannot accept deposits, and insurance funds cannot invest and save. The so-called "separated" business model is clearly distinguished between industries, which is the so-called "separated" business model. After World War II, with the continuous expansion of the scope of financial transactions, various financial derivative products emerged one after another, and financial transactions across industries continued to emerge. Traditional banks, securities, and insurance businesses gradually gave way to emerging financial models such as futures and hedge funds.

In London and Hong Kong and other financially developed regions, there are many cross-industry financial institutions, and there are probably only the United States in the world. Several Chinese countries still retain the "separate business" model, but even the People's Bank of China has gradually begun to relax supervision and allow the "mixed business" business model to appear. Zhongxing Group's Xingfu Investment Company can acquire Ping An Insurance and Shenzhen Development Bank, which is closely related to the change in national policies this time.

Given that "mixed business" is the general trend, both Bank of America and Investment Banks are dissatisfied with the Grass-Stigeller Act. Rubin, who was born on Wall Street, proposed to Congress on behalf of the Clinton administration to reform the financial system. The main content is to abolish the Grass-Stigeller Act, cancel restrictions on the operation of the banking, securities and insurance industries, that is, to enact the Financial Services Modernization Act.
Chapter completed!