Chinese investment in Morgan Stanley not cause for concern, say financial experts

In 2007 – pre-financial crisis – when CIC first invested in Morgan Stanley, they bought shares in the upper forty-dollar range. Now, the company’s stock is in the 20’s. “So in conversion, CIC has lost a lot of money on the transaction,” said Chovanec. “And they have come under a lot of criticism in China.”

He also pointed out that in 2008, when Lehman Brothers collapsed, Morgan Stanley was looking around for additional funding to help it stay afloat. At that point, the financial firm talked to CIC about making additional investments. But the Chinese firm wasn’t interested.

As for the political concerns, Chovanec said those are nothing new. The question of whether their agenda is financial or political shadows every Chinese investment made in the United States. But politicizing business moves, he said, “sends the wrong message.”

In the long run, politicization of Chinese business practices benefits no one and makes the American market less attractive, Chovanec explained.

“It’s a really self destructive game to play with the Chinese,” Chovanec warned. “It gives the Chinese an excuse to wall off portions of their economy and prevent U.S. companies from going to China.”