Congressman Warns Chinese Takeover Of Chicago Stock Exchange May Lead To Economic Warfare

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Jonah Bennett Contributor
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Congress is raising hell over a Chinese company with potential ties to the Chinese Community Party taking over the Chicago Stock Exchange in what appears to be a first-ever attempt by the Chinese to gain deep access into the $22 trillion U.S. equity markets.

Led by Rep.  Robert Pittenger, 45 members of Congress demanded the Committee on Foreign Investment in the United States (CFIUS) conduct a full national security review of the transaction between the Chongqing Casin Enterprise Group and the Chicago Stock Exchange.

Without interference, the transaction is expected to be finalized by the second half of the year.

“The company acquiring or seeming to acquire the exchange is essentially unknown,” Pittenger told The Daily Caller News Foundation. “It’s a Chinese company. They’re not predisposed to convey much about the company, or its relationship to the government. They’re very opaque in their declarations.”

“Beyond that, there is clearly a concern regarding China’s historical patterns of manipulations of currencies and markets,” Pittenger added.

For Pittenger, the transaction raises numerous problems. First, it’s unclear who controls the Chongqing group, although the company’s assets were once owned by the Chinese government. Additionally, the company operates in a variety of different sectors, which are heavily government-controlled. The chairman of Chongqing is also a member of a committee overseen by a political figure. The Communist Party of China has a policy of functioning as the minority shareholder in most major domestic companies.

Second, China is no stranger to employing cyber warfare against important targets, mostly for the purpose of espionage. Access to the exchange will grant access to valuable data.

“I think obviously the cyber issues bring things into mind in terms of our concerns over China and the way that they’ve allowed, if not enabled, their cyber war, all of which we believe is concerning because of the impact they could have in a $22 trillion dollar market exchange,” Pittenger told TheDCNF.

Third, Chinese corporate culture is fundamentally opposed to U.S. norms.

“We operate off a fairly straightforward culture, and we have the rule of law and that will enforce that,” Pittenger said. “They have a different modus operandi. And their transparency is nowhere close to our disclosures.”

Fourth, there is potential for the Chinese government to wage economic warfare on the U.S. through the Chicago Stock Exchange, which is precisely why Pittenger wants CFIUS to conduct a full investigation into the transaction.

Another Chinese company, Zoomlion Heavy Industry, issued an unsolicited bid earlier this week to take over an American company which supplies the U.S. military with heavy equipment. GOP Rep. Duncan Hunter wrote a letter to Secretary of the Treasury Jacob Lew similarly asking for a CFIUS review of the attempted acquisition of Terex Corporation.

In the letter, members of Congress urged CFIUS to deny the acquisition if it becomes clear that Chongqing has ties to the Chinese military.

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