China is bargain-hunting -- and western security is at risk

On April 7, a Chinese company suffered a surprising setback in the United Kingdom. Following an uproar by British legislators, an arm of the Chinese state-owned investment firm China Reform had to abandon its bid to dominate Imagination, a leading British technology firm that makes smartphone chips. Even if that effort failed, others are likely to succeed.

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That’s because many Western manufacturers of popular products will face financial uncertainty as a result of the coronavirus pandemic, making them easy prey for Chinese companies, which are already on a corporate buying spree in the West.

Canyon Bridge, a Cayman Islands-based outfit that is majority-owned by China Reform, bought Imagination in 2017—but the U.K. government didn’t intervene. This month, however, when China Reform attempted to put four directors on Imagination’s board and thus seize control of the company, British members of Parliament rebelled; China Reform abandoned the attempt.

Imagination is well known, but across Europe, North America, and other advanced economies there are countless cutting-edge firms in key sectors such as biotech and electronics that are neither as rich nor as well funded as Imagination. And like most other companies, they’ve been hit by the standstill that coronavirus has imposed on the economy. A recent survey of more than 10,000 Japanese firms, for example, showed that 63 percent predicted the coronavirus would have a negative impact on their business performance.

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