Business

US Blocks Sale Of Chicago Stock Exchange, Sinking Another Suspicious Chinese Business Deal

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Ryan Pickrell China/Asia Pacific Reporter
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U.S. regulators blocked the sale of the Chicago Stock Exchange to Chinese buyers Thursday, killing yet another questionable Chinese business deal in the U.S.

The sale of the Chicago Stock Exchange to a group of Chinese investors led by Chongqing Casin Enterprise Group, a private company that denies any ties to the Chinese government, has been at the center of an important national security debate for two years, with many observers on both sides of the aisle arguing that the acquisition could offer the Chinese government unfettered access to American financial markets, Reuters reports.

Investors proposed acquiring the Chicago Stock Exchange (CHX) in February 2016 for roughly $25 million. The Securities and Exchange Commission (SEC) initially approved the sale in August 2017 but then immediately reversed course, putting the sale on hold. The deal died Thursday as the SEC explained the acquisition, which is surrounded by a lot of unanswered questions, does not comply with the stock exchange governance guidelines.

On the campaign trail, then presidential candidate Donald Trump railed against the sale on several occasions. “China bought the Chicago Stock Exchange — China, a Chinese company,” he said in a 2016 speech in South Carolina, adding, “They are taking our jobs. They are taking our wealth. They are taking our base.”

“This has been a long fight, and I am grateful we now have a President who recognizes the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange,” Republican Rep. Robert Pittenger of North Carolina said in a statement Thursday, further arguing, “We must continue to be vigilant, with thorough oversight, to prevent the highly-coordinated and strategic efforts of the Communist Chinese government to threaten our national security through malicious business investments.”

ALSO WATCH:

Since Trump took office, the U.S. has shut down several Chinese business deals identified as suspicious or potential threats to U.S. national security.

The president personally intervened last September to block Canyon Bridge Capital Partners, a Chinese company with Chinese government support, from purchasing Lattice Semiconductors, a leading American chip maker that produces critical components used in satellites, missile defense systems, and other military technology.

The Committee on Foreign Investment in the United States (CFIUS) rejected in January Ant Financial’s bid to buy U.S. money transfer company MoneyGram International Inc. due to national security concerns. Jack Ma, a Chinese citizen with strong ties to the Chinese government, owns Chinese internet conglomerate Alibaba Group Holding Ltd., which owns Ant Financial. The deal was torpedoed over fears that China could use the acquired data to spy on American citizens.

In addition to blocking Chinese acquisition deals, the Trump administration has also launched a thorough investigation into Chinese theft of American intellectual property and even placed tariffs on certain Chinese exports.

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