The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

The Link Between China's Smithfield Foods Acquisition and Sinovel Wind

Since the announcement last week that Shuanghui International, the dominant pork and sausage processor in China, has made a deal to acquire Smithfield Foods for $4.7 billion, much of the press has been focused on what that acquisition might mean for food safety in the U.S.

After all, for years, China has generated a macabre stream of high profile food safety horror stories that might cause Sweeny Todd to blanch.

One hopes that Shuanghui International’s plan in acquiring Smithfield Foods is to import U.S. food safety standards to China rather than obtain an outlet for the melamine-tainted milk, cadmium laced rice and rat meat masquerading as lamb that appear as regular menu items in China.  If indeed there is a growing market in China for safe foods, Shuanghui International’s proposed acquisition of Smithfield Foods may presage a huge new market for American processed food exports to China. 

So what does the proposed acquisition of Smithfield Foods by the Chinese have to do with renewable energy?  And why should this acquisition be scrutinized in the much larger context of U.S.-China trade and investment?  Well the answer, of course, is China’s decidedly tenuous respect for intellectual property.  The explanation lies in the deeply imbedded interconnections of Chinese business interests and the West's overlapping concerns about a host of Chinese business practices.  Let me explain.

As we have written, the once promising wind energy opportunities for China and the U.S. have been sidetracked by China's single-minded push to dominate the wind turbine manufacturing industry.  This in turn has resulted in a souring of the relationship between China and the international wind industry; this climate not only is driving foreign participants out of China, but also is cannibalizing the domestic market among Chinese competitors, producing an increasingly unhealthy industry.  The high profile case of industrial espionage involving Sinovel Wind Group Co., Ltd., one of China’s largest wind turbine manufacturers, and American Superconductor, for a time a rising star in the U.S. renewable energy sector, accelerated this trend. 

What connects wind turbines and sausage is a company whose most prominent investor is the son of former Premier Wen Jiabao.  As reported in the New York Times, New Horizon Capital, which was co-founded by Winston Wen, has teamed up with Goldman Sachs and other “global deal makers” to put together the deal for Smithfield Foods.

So, should we care that New Horizon Capital, which has a significant investment in Sinovel Wind, a company known to have stolen AMSC’s intellectual property, desires to acquire Smithfield Foods?   And while the national security review by the Committee on Foreign Investment in the United States will be an integral part of the Shuanghui/Smithfield Foods acquisition process, should that be the entire scope of the inquiry? 

Some prominent former Obama Administration officials, including Dennis C. Blair, President Obama’s first director of national intelligence, and Jon M. Huntsman Jr., the former ambassador to China, suggest that whether companies protect intellectual property also should be a consideration of the Committee on Foreign Investment in the United States, which presently only judges whether an investment in the United States could pose a national security risk.    While this recommendation, which is outlined in the recently released private Commission on the Theft of American Intellectual Property, “IP Commission Report”, specifically recommends using acquisition review opportunities as another tool to combat intellectual protection theft, there have been high profile cases where other proposed acquisitions by Chinese companies (most notably the failed bid by CNNOC to acquire Unocal Corp. in 2005) arguably have foundered for reasons other than national security concerns.    

So to what extent should we “triangulate” those issues?  Would a business relationship marked by misconduct in one industry be cause for us to be less receptive in another?   Is it sufficiently compelling to question one acquisition because investors in the acquirer also are profiting from intellectual property theft in another industry?  Where is the line drawn and why?  These are all questions that deserve robust consideration.

Lead image: Wind turbines via Shutterstock

Untitled Document

RELATED ARTICLES

Sinovel Wind’s Loss Widens on Fewer Orders, Asset Impairment

Reed Landberg, Iain Wilson, Abhay Singh, Bloomberg Sinovel Wind Group Co., once China’s biggest supplier of wind turbines, said its loss more than doubled in the first ...

Wind Power is Breaking Down International Border Barriers

Vince Font In an important “model of collaboration” between the U.S. and Mexico, the first ever cross-border wind farm has been ...

Why Do Germany’s Electricity Prices Keep Falling?

Rachel Morison, Bloomberg Chancellor Angela Merkel cemented Germany’s shift toward an economy powered by renewable energy in 2010 with her “Ene...

German Renewables Investors To Fund Iranian Wind Farm

Anna Hirtenstein, Bloomberg Development Environment Arvand Co., a German-Iranian renewables developer, signed an agreement to build a 48-megawatt...

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Early Bird Registration Deadline for GRC Annual Meeting is This Week

The deadline for early-bird rates for registration for the biggest annual geothermal ev...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

FINANCIAL NEWS

Lou Schwartz, a lawyer and China specialist who focuses his work on the energy and metals sectors in the People's Republic of China, is a frequent contributor to Renewable Energy World. Through China Strategies LLC, Lou, who is fluent in Chinese, ...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Europe – in partnership with GWEC, the Global Win...

There is now 128.8 GW of installed wind energy capacity in the EU (appro...

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Distributed Wind Energy Workshop

Description: Distributed wind energy is electricity that is produced for...

COMPANY BLOGS

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS