When Blackstone sold Strategic Hotels & Resorts — the owner of 16 luxury hotels in the US — to the Chinese insurer Anbang for $5.5bn in 2016, it did not need to consider the risk that Strategic would become the property of the Chinese state. This is, somewhat ironically, because hotel companies, whatever their name, are not strategic assets. Last week’s news that Beijing has seized Anbang and accused its former chairman, Wu Xiaohui, of fraud and embezzlement, was probably met with an indifferent shrug at Blackstone headquarters.
The question of Chinese takeovers is much more fraught for other companies and, indeed, governments. Also last week, the Committee on Foreign Investment in the United States blocked a $580m takeover of Xcerra, a semiconductor testing company, by a China-backed investment fund. Cfius has blocked other semiconductor acquisitions by Chinese companies, apparently on the grounds that chip technology has military applications.
But national security interests in a narrow sense is not the only reason that targets and governments should treat Chinese offers with care. There are at least three others: reciprocity, transparency and data security.