(HorizonPost.com) – In the middle of the worst microchip shortage in years, China is seeking to extend its trade lines and reach through increasingly troubling takeovers. Dutch-owned semiconductor manufacturer Nexperia, ultimately owned by the Chinese conglomerate Wingtech, recently acquired full control over Newport Wafer Fab (NWF) in the United Kingdom.
A state-backed Communist Chinese firm has conducted a hostile takeover of the UK’s largest microchip factory, raising concerns about Beijing’s growing control of the market during a global chip shortage. https://t.co/SwTaMHQn35
— Breitbart News (@BreitbartNews) July 7, 2021
The takeover itself isn’t necessarily the core problem — national security experts and economists are more concerned with the situation that led to the acquisition.
Nexperia originally signed a debt agreement with the struggling microchip factory back in 2019. The deal was simple: they would provide financial support, allowing the factory itself to serve as collateral. In exchange, NWF would adhere to strict manufacturing quotas.
When the UK factory failed to meet its goals, NWF asked the UK government to intervene and prevent a takeover. Nexperia exercised a contractual clause to seize 100% control over the company anyway.
This kind of deal isn’t new. In fact, the CCP itself has a long and well-documented history of offering questionable loans to cash-strapped businesses in exchange for similar forms of collateral. Then, when the struggling company can’t meet its obligations, the CCP steps in and takes over, gaining both geopolitical leverage and an instant foothold in yet another location.
The Welsh government applauded the takeover, suggesting it saved nearly 400 jobs. But at what cost? As of May, Chinese investors own nearly £135 billion of assets in the UK, rapidly shrinking Britain’s control over their own market. According to Breitbart News, some are questioning why the government didn’t step in and utilize their recently created National Security and Investment Act to prevent the exchange.
These concerns aren’t relevant solely to foreign countries, either. The reality is China, and by connection, the CCP, effectively owns around $1.1 trillion worth of US Debt, including significant stakes in companies across multiple US industries.
Perhaps it’s time to say enough is enough and maintain ownership over assets located right here, on home soil.
Copyright 2021, HorizonPost.com