Analysis of Chinese Investments in the USA

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Once hardly noticeable, Chinese investments in U.S. companies are now rising sharply. Cumulative Chinese investments in U.S. companies remain modest compared to those of other major countries. However, a combination of “push and pull” factors are moving China’s annual investment levels closer to levels consistent with China’s current economic stature.

First, the Chinese government has made a conscious decision to diversify its foreign currency assets into hard assets. This has led to the creation of sovereign wealth funds that make portfolio investments in U.S. equities, private firms, and real estate.

Second, the Chinese government has altered its policy guidance toward foreign direct investment (FDI). Whereas it previously encouraged investments almost exclusively toward energy and resource acquisition in developing countries, it now also encourages investments in advanced countries. The government’s goals for these investments include securing energy and mineral resources and acquiring advanced technologies in industries where China wishes to leapfrog existing competitors.

Third, U.S. state governments and, to a lesser extent, the federal government are vigorously trying to attract Chinese greenfield investments in the hope of creating jobs and jump-starting local economies.

Fourth, Chinese investments are being drawn to the United States by the availability of financially weak firms, some of which possess potentially useful technologies for China.

Fifth, some firms that are already competitive with U.S. producers are investing to enhance their U.S. market shares or in response to trade remedies proceedings against unfair trade practices, such as Chinese subsidies.

Economic Benefits

On an aggregate basis, the economic benefits of Chinese investments in the United States have been modest. The precise benefit is difficult to measure due to the convoluted ownership structures of many Chinese investments and the time lags in official U.S. data. Still, based on a combination of official and private data, it is reasonable to conclude that jobs in Chinese-owned companies in the United States increased by 10,000 to 20,000 workers during the past five years.

While hardly significant relative to overall U.S. employment and even to jobs in other countries’ U.S. affiliates, any job creation is welcome given continued slackness in the U.S. labor market.

Chinese FDI in U.S. companies has helped stabilize some financially troubled firms. Portfolio investments by sovereign wealth funds also have helped the economy by solidifying the financial system and providing liquidity to certain property markets.

Chinese investments have occurred in all U.S. regions and in many sectors. According to one private data source, they have been especially prominent since 2007 in the Southwest, Great Lakes, Southeast, and Far West regions, and in the fossil fuels and chemicals, industrial machinery, and information technology industries. According to another private source, as well as government data, the financial sector is also a major recipient of Chinese FDI.

Policy Challenges

These welcome, though still modest, economic benefits are counterbalanced by policy challenges tied to Chinese FDI. First, U.S. affiliates of Chinese companies are not pure market actors and may be driven by state goals, not market forces. China’s outward investments are dominated by state-owned and state-controlled enterprises (SOEs). These entities are potentially disruptive because they frequently respond to policies of the Chinese government, which is the ultimate beneficial owner of U.S affiliates of China’s SOEs. Likewise, the government behaves like an owner, providing overall direction to SOE investments, including encouragement on where to invest, in what industries, and to what ends.

Second, SOEs may have unfair advantages relative to private firms when competing to purchase U.S. assets. SOEs benefit from substantial subsidies in China and their investments in developing countries also receive ample financial support from the national and sub-national governments, state-owned financial institutions and local governments. Government pronouncements out of China suggest that investments in the United States and other advanced countries will also receive ample financial support. This raises the possibility that Chinese largesse could determine market outcomes for purchases of U.S. businesses.

Third, an increased SOE presence may be harmful to the U.S. economy. In China, SOEs are a major force but as a group they are less efficient and profitable than private firms. To the extent that SOEs purchase U.S. companies on the basis of artificial advantages and operate inefficiently, they may not be beneficial to long-term U.S. economic performance.

Fourth, Chinese investments will create tensions related to economic security and national security if they behave in accordance with China’s industrial policy as articulated in the 12th Five Year Plan, government pronouncements, and official investment guidance. China’s current policy guidance directs firms to obtain leapfrog technologies to create national champions in key emerging industries, while investment guidance encourages technology acquisition, energy security, and export facilitation. Based on this juxtaposition, some will conclude that Chinese FDI in the United States is a potential Trojan horse. Indeed, this study describes three investments in new energy products after which production utilizing the desired technology was shifted to China.
Other Findings

U.S. data collection efforts related to FDI are substantial. However, they likely undercount Chinese FDI due to the complicated ownership structures of many Chinese investments. Moreover, although Chinese-owned companies report their data to the U.S. government, many data points are not publically disclosed due to standard U.S. reporting procedures that protect the identities of individual firms. This issue will resolve itself in the coming years if Chinese FDI grows as expected because limits on disclosure will no longer apply.

The United States is relatively open toward FDI, though there are some sectoral restrictions and a national security review undertaken by the Committee on Foreign Investment in the United States (CFIUS). There are a host of laws that subject foreign investors to rules on antitrust, foreign corrupt practices, and trade in arms and sensitive technology products. However, there is no procedure that explicitly considers issues related to economic security, one of the major concerns about Chinese FDI.

Portfolio investments in equities fall under the purview of the Securities and Exchange Commission (SEC). SEC disclosure requirements and practical considerations make it highly unlikely that Chinese SOEs could successfully collude to accumulate significant equity positions in important U.S. firms.

Reverse mergers offer a back door into U.S. capital markets but are not an effective way to acquire important U.S. assets. Indeed, the target of a reverse merger is typically a shell company devoid of meaningful assets. This technique is typically used by private firms that have difficulty accessing capital in China or by provincial SOEs trying to support restructuring efforts in China. There is no indication that any major SOE has used or plans to use this technique to enter the U.S. capital market.

The Chinese legal and regulatory framework for outward FDI requires approvals by three agencies at sub-national and/or national levels. For SOEs, the primary gatekeeper is the State-owned Assets Supervision and Administration Commission (SASAC), though for some investments approval from the State Council is required. The process is widely considered to be cumbersome and is being reformed to facilitate outward FDI.

 

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Unveiled – WikiLeaks Setting Another Trap for Journalists, NGOs

A sends:

I tasted that poison today. It was strange, the feeling of having the privilege to information that was only made available to “a select few” was overwhelming, I don’t have the vocabulary to describe what the poison tastes like, but I can understand how some people could become addicted to it, even if it meant their death.

You are right, WL is setting “Terms and Conditions” to the access to stolen property, and attempting to force Journalists into an “Agreement” to those “Conditions, however unenforceable.

Your thoughts and counsel were welcomed, they snapped me out of that trance that I found myself in.

The only thing to do is, publish everything that I’ve learned over the last many hours about this whole affair.

 


2012-00414 WikiLeaks Partner for Global Intelligence Files June 26, 2012 (copy below) via Google Search

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Cryptome rejects this proprietary publishing manipulation. Again, WikiLeaks is inducing participation in a crime covered with pseudo-journalistic exculpation. Again excluding open public access in favor of contractual marketing of stolen material and aiding its profitable commercialization.

It’s a trap, don’t do it, don’t encourage others to take the bait.

Don’t send anything to me you don’t want published. This note will be published .

_____

At 06:24 PM 6/26/2012, you wrote:

Please Do Not Post, still working on getting us access.

Below if the terms and conditions that WL is sending to everyone.

 


_Terms and Conditions for access to the Global Intelligence Files

These Terms and Conditions are an agreement between you as an individual (not your organisation) and WikiLeaks with respect to use of the Global Intelligence Files.

1. WikiLeaks will provide access to the data known as Project Rock Guitar through WikiLeaks’ search database. You will use the search database as per instructions on the site and will not use robots on the system.

2. The decision what to publish in news articles and papers will remain at your discretion. You will credit WikiLeaks in the following manner: “investigative partnership organised by WikiLeaks” and refer to the data as having been “obtained by WikiLeaks”.

3. You will refer clearly on your website to the document(s) provided by WikiLeaks that were used in preparation of these news articles or papers and link from your publication to the data on WikiLeaks’ website.

4. You will treat any alleged and/or suspected WikiLeaks sources for the Global Intelligence Files as confidential sources of your own, with all the ethical and legal protections such sources are entitled to. You, in accordance with journalistic and professional ethics, will not speculate as to their identities. In relation to WikiLeaks’ provision of confidential information to you, you will treat WikiLeaks as a confidential journalistic source. Although you will publicly describe the information has having been “obtained by WikiLeaks” you will not, for the protection of WikiLeaks, you and the WikiLeaks sources, say that the information was “given” to you by WikiLeaks.

5. When publishing any story or material based on the Global Intelligence Files you understand that in relation to exclusivity you must inform WikiLeaks of the identification number of the data informing your publication and will submit this number to WikiLeaks’ release platform before the story is to first appear in any of your publishing mediums, so that WikiLeaks can publish the original data at the same time. You will also provide a URL link to where the story or material will appear on your site. Instructions for this release system are on the GI Files site and must be read and followed once you have access to the site. You understand that the release system provided by WikiLeaks must be treated in a reputable manner: there is to be no playing of the system to schedule large quantities of data in advance to reserve them, or using robots on the system. Scheduling must reflect true intentions to publish at the date and time you list on the release system.

6. You will treat each of the documents made available to you by WikiLeaks as confidential unless and until a story based on their content is published. You will exercise care in ensuring that the materials will not be vulnerable to hacking or other efforts to discover their content.

7. WikiLeaks journalists, employees, consultants and infrastructure are the subject of State and private intelligence activity and politicised financial blockades. To protect its continued ability to publish effectively, various WikiLeaks methods, people and locations need to be kept confidential. Unless otherwise stated, these include, but are not limited to: identifying details of all WikiLeaks personnel, security methods, communication systems or methods, locations, strategic plans, information on threats against WikiLeaks, the number of WikiLeaks personnel, the number of WikiLeaks personnel in different areas, usernames, passwords, transportation and financial arrangements including financial transportation methods.

8. Trading, selling, sharing or giving away your account is prohibited, as is trading and selling invites or offering them in public.

9. You understand that any breach of these Terms and Conditions or mismanagement of the search database or release platform will result in your access being withdrawn, along with the access of the anyone that invited you and anyone you invite. You are responsible for your own account and for the people you invite.

By ticking this box you agree to abide by all of the above Terms and Conditions

Your login and password will be sent by mail.

 


GIFiles Signup Instructions

Becoming a WikiLeaks Partner for the Global Intelligence Files

You have been invited to enter a secret world.

By joining the global WikiLeaks partnership on the Global Intelligence Files (the GI Files) — you will have access to more than five million emails from the Texas-headquartered “global intelligence” company Stratfor. The emails date from between July 2004 and late December 2011. They reveal the inner workings of a company that fronts as an intelligence publisher, but provides confidential intelligence services to large organisations, including the US Department of Homeland Security and the US Defense Intelligence Agency. Being part of this international team will allow you to search the emails using the sophisticated search engine designed by WikiLeaks to enable you to research and publish articles and papers using this data.

The purpose of this system is to maximise global impact of the GI Files by restricting supply to those who are most likely to research and publish on them.

We are allowing journalists, academics and human rights organisations to search and publish the GI Files. To enter into this partnership you will need to be given a unique code by one of our existing partners. Users who demonstrate research and publishing ability will be considered as partners for new WikiLeaks publications.

Once you have this code please follow the instructions below to enter the partnership and gain access to the GI Files. These instructions are designed to be idiot-proof. They explain every step of this process, but don’t be scared – for most people this will be quick.

1. Download Tor, a tool for encrypted anonymous web-browsing. Without this you will not be able to access our Terms and Conditions, or the GI Files database.

Tor Instructions:
– To get Tor please go to the following URL to download the “Tor Browser Bundle:” https://www.torproject.org/projects…
– Choose the correct version depending on whether you use Windows, Mac or Linux and download it in the language you want.
– Click on the correct version to download it and then save it – we suggest to your Desktop.
– Once you have saved it you can find the “Tor Browser Bundle” application in the place you saved it.
– You will need to double-click on the Start Tor browser application to run Tor.
– You will need Tor running to access the site to agree to our Terms and Conditions, and then to later access the GI Files site.

2. Start Tor and go to the following site (it will only work using Tor). Wait up to 30 seconds for the site to load for the first time: http://7f4lihm464gdcwfc.onion/invit…

3. Enter your unique invite code to get access to the GI Files partner Terms and Conditions.

4. Enter your name, organisation name, email address and phone number. The email address you give cannot be a personal email address; it must be a work email account.

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6. Once you understand your responsibilities under the Terms and Conditions tick the check box to confirm your agreement.

7. Within 15 minutes you will receive an email to the email address you supplied giving you login details to the GI Files website.

8. Login to the site at the following URL: http://7f4lihm464gdcwfc.onion/ giving your username and password as supplied in the email. This URL can only be accessed when using Tor.

9. Once you are logged into the site you will see your user page, the search interface and publishing interface. At the top of the page are tabs that explain how these work. On your user page you will have five invite codes for you to give to others so that they can also gain access to the GI Files.

10. If you wish to invite someone to the GI Files then give them a unique invite code, along with the URL to this page of instructions – each person you invite must be a journalist, NGO worker or academic from a different organisation (for complete understanding of who you can invite please see the invite rules below).

11. If you violate any of the Terms and Conditions you risk having your login terminated, along with that of the person that invited you and the people that you invited. If any of the contacts you invited violate the terms of the Terms and Conditions, they risk having their login terminated, your login terminated and the logins of the people they invited terminated.

Invite Rules:

Each invite code must be given to a person who:
A. is a real person
B. is either a journalist, Professor or Associate Professor at a University or an employee of a human rights organisation
C. is from a different organisation to you and your other invitees
D. is using an email that is not a personal email
E. is using an email that is from a different domain to your email address and that of the other people you invite
F. is going to use the GI Files search and release site for research, the results of which will be communicated to the public.

For any issues or questions related to this signup process, please email: signup@wikileaks.org

 


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Public Intelligence – Ohio Fusion Center Report: Bath Salts and Officer Safety

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(U//FOUO) The Ohio State Highway Patrol Criminal Intelligence Unit recently partnered with the Ohio Strategic Analysis and Information Center (SAIC) and gathered information regarding bath salts via a survey. The objective of the study was to assist Law Enforcement by creating an officer safety awareness product relating to the dangers of encountering people on bath salts.

(U//FOUO) A survey was distributed to law enforcement and 5 agencies responded back with pertinent information regarding the use and possession of bath salts. The agencies which contributed to this analysis are as follows:

Barberton Police Department, OH; Ohio State Highway Patrol; Powell Police Department, OH; Reynoldsburg Division of Police; and West Virginia State Police – Wheeling Division (Parcel Interdiction).

(U//FOUO) Information was obtained on 161 incidents involving bath salts.

(U//FOUO) OVERVIEW AND ANALYSIS OF RESULTS:

  • Out of the 161 incidents reported, officers made 77 arrests involving bath salt use/possession. Many of the incidents occurred before legislation was passed; therefore mere possession was not criminal at the time of many of these reports.
  • There were 27 use of force reports involving bath salts.
  • There were 3 incidents that involved fleeing of suspects.
  • 7 suspects were taken to hospital associated with bath salt use.
  • 7 offenders were pinked slipped and taken to mental health facilities.
  • There were 4 reports of deaths associated with bath salt use (Note: cause of death results did NOT find that bath salts use was the sole contributor in any of these deaths).
  • There was 1 report of suicide; 2 suicide attempts; and 1 suicide threat involving bath salt use.
  • Suspects reported paying approximately $20-$25 for bath salts.
  • The offenders reported multiple ways of using bath salts including: snorting, injection with a needle syringe, and drinking the bath salts by mixing it with fluid.
  • Many offenders admitted to combining bath salts with other drugs.
  • When reported, most people said they got the bath salts from independently owned convenient stores and drive-thrus, gas stations or markets. A WV State Police (parcel narcotics interdiction) Officer reported that a prominent internet company is: Southern Burn LLC from South Carolina.

(U//FOUO) OFFICER SAFETY CONCERNS

  • Use of force incidents included: use of Taser (3 incidents), hands on, escorts, restrained by medical professionals, and bean bag use.
  • One “officer in trouble” call was reported, involving an officer fighting with a person on bath salts.
  • Both officers in a Reynoldsburg Police case were surprised after a Taser was used on a suspect. They explained that the Taser was shot and the probes penetrated in the torso of the suspect, however it had minimal effects; the suspect fought through the electric current and rose to his feet.
  • Injuries sustained to suspects included: bruises, cuts, Taser punctures, and minimal injuries from bean bag rounds.
  • Officers sustained injuries including: injury to knee, injury to back, injury to groin, ankles, scrapes and bruises, and multiple injuries from strikes to the face.
  • 2 officers and 7 offenders were taken to the hospital resulting from physical force.
  • One incident involved the use of the SWAT team and another involved escalated use of force involving bean bag rounds.

(U//FOUO) PHYSIOLOGICAL REACTIONS FROM BATH SALT USE

  • Suspects showed the following physical reactions to bath salts: Hyperventilation, cramps, dehydration, vomiting, shaking, loss of memory, pale, emaciated, jittery, lethargy, incoherent speech, rambling, rapid movement, rapid speech, disoriented, itchy skin, and several suspect admitted to a lack of sleep for multiple days.
  • An offender described bath salts as giving him a “cocaine rush” and it being a very “intense” high.
  • Witnesses described bath salt users as:
    • Hostile, violent, unpredictable, out of control, paranoid, and reckless.
  • Additional reports by Law Enforcement involving people on bath salts:
    • Officer described one suspect as having unusual superhuman strength.
    • Officer described suspect as shooting off the ground like a “flash of light.”
    • One suspect bent the hinged handcuffs during the arrest.
  • The following hallucinations were reported:
    • A hit-skip offender said he saw a brick wall, which in turn caused a crash.
    • A male, using bath salts, reported raccoons setting fire inside his home. As a result, he proceeded to destroy his home and used a hatchet to cut up his deck, while attempting to locate the fire-setting raccoons. He also believed the raccoons stole his cell phone.
    • A male, using bath salts, believed he was being followed by police helicopters and police officers were using mirrors, snipers and different types of scopes to look through his walls. He called police requesting to negotiate with them, however there were no police at the residence when the call was made.
    • During the course of speaking to an offender and officer reported, he yelled, “AT&T calling, may I help you, AT&T is calling, a million dollars, two black guys……it’s not a racial thing, it’s not a racial thing.”
    • A bath salt user reported he hears voices; one voice was going to beat him with a ball bat.
    • The domestic violence offender using bath salts reported his mother was practicing demonology & witchcraft and she was poisoning his food. He was arrested for choking her.
    • DOWNLOAD THE ORIGINAL DOCUMENT HERE:
    • OHSP-BathSalts