Chinese Aggression

Opinion/Analysis: Trump is right to ditch 5 decades of failed US-China engagement policy

In less than nine minutes, President Trump delivered remarks at the White House on Friday signaling his administration has ditched almost five decades of the American policy of engagement with China. It’s about time. China has been challenging the United States across the board, and Trump – with his comprehensive comments Friday – signaled the United States would defend itself across the board. Trump announced a series of actions, including: Terminating America’s relationship with the World Health Organization. Trump said the WHO is biased in favor of China and has failed to approve reforms arising out of its dealing with the coronavirus pandemic that originated in China. The move cuts off about $450 million in U.S. funding for the WHO. Trump said the U.S. would use those funds for “other worldwide and deserving urgent global public health needs.” Suspending entry into the U.S. of Chinese nationals posing a security risk. Revoking almost all special exemptions and rules for Hong Kong and imposing sanctions on Chinese and Hong Kong officials. Studying the “differing practices” of Chinese companies listed in the U.S. The president signed a proclamation stating that he will block entry into the United States of Chinese students and researchers tied to U.S. military efforts. In his brief remarks, Trump also commented on other matters, especially the spreading of the coronavirus. “The world is now suffering as a result of the malfeasance of the Chinese government,” he said. On the issue of Hong Kong, Chinese leaders were undoubtedly waiting to see if Trump would withdraw America’s special treatment of the beleaguered territory on trade and other issues. Some thought Trump would not do this, making this issue a test of his resolve. In meeting the test, the president showed political will rarely seen in American leaders. Most observers thought the president would concentrate his remarks on Hong Kong. The surprising aspect of the comments was their comprehensive nature. Moreover, the tone of the president’s words – he was not only adversarial but also angry – broke with decades of precedent. Chinese leaders have not heard an American leader talk to them this way in public. The range of announced actions should concern Chinese leaders. The actions suggest Trump is now leading a whole-of-government charge on China. Not everyone thought Trump was so resolute. The Financial Times, for instance, said Trump “pulled his punches,” not adopting a “range of measures” the markets feared. For instance, he did not terminate the Phase One trade deal, signed Jan. 15. Yet the trade agreement looks shaky – termination or no termination. There are signs China will not meet its principal commitment – increasing purchases of American goods and services by $200 billion over a two-year period. A result, the trade deal is in danger. The Financial Times also said the markets were relieved that Trump did not impose new tariffs or freeze assets of Chinese nationals. The markets should not break out the champagne just yet, however. The Trump administration will be announcing more actions in the weeks to come, probably including “full expensing” for costs to relocate factories from China and Hong Kong to the United States. Larry Kudlow, the director of the president’s National Economic Council, talked about such subsidies in an interview with Fox Business’ Stuart Varney on Tuesday. Moreover, Trump’s mentioning of the behavior of listed Chinese companies is a warning that investment is the next big area on the chopping block. China for months has been saying the “decoupling” of the United States from China was not possible. However, on Friday Trump was making the process look inevitable. Trump said he wanted “an open and constructive relationship with China” – but ultimately the state of relations is not up to him. Beijing, showing off its “wolf warrior diplomacy” has taken a series of aggressive actions since February including: invading India; engaging in boat-bumping and other incidents against six of its neighbors in the South China and East China Seas; threatening to invade Taiwan; breaking promises over Hong Kong; and increasing the tempo of dangerous intercepts of the U.S. Navy in China’s peripheral waters and airspace. It’s not entirely clear why China is lashing out at this moment. Some say it’s a sign of strength. Others says it is a sign of weakness. But it is evident that America’s engagement policy has failed. Engagers, adopting a long view, often ignored or condoned unacceptable Chinese behavior. That feckless policy approach – conducted by U.S. presidents of both parties and by liberals and conservatives alike – only emboldened the worst elements in Beijing by showing everybody else that aggression worked. The upshot is that there is now a perception that Chinese communism cannot be reformed – meaning the only thing the Trump administration can do to protect America is to reduce exposure to China. The underlying theme of the president’s actions Friday was that his administration is cutting ties with Chinese communism. That is the correct approach. The People’s Republic of China is more than just an adversary. A year ago the Communist Party declared a “people’s war” on America. That hostility means that apart from surrendering to Beijing, there is not much Trump can do to patch up relations with China. This is not a Trump issue; it is a China one. There will be costs in unwinding decades of misguided U.S. policies toward China – how could there not be? But Beijing is leaving Trump with little choice. It’s time an American leader did what is necessary: go after China on all fronts. And that’s what the world heard Friday from President Trump.

Exactly right!!  Thanks to Gordon C. Chang, the author of that spot-on analysis.  Gordon is the author of “The Coming Collapse of China.” Follow him on Twitter @GordonGChang.  Excellent!!         🙂

Tom Cotton, Marsha Blackburn Plan Ends China-to-U.S. Student Visa Pipeline

Senators Tom Cotton (R-AR) and Marsha Blackburn (R-TN) are looking to end China’s pipeline of foreign students to fill spots at American universities and take American STEM jobs. In the wake of the Chinese coronavirus crisis, Cotton and Blackburn — as well as Rep. David Kustoff (R-TN) in the House — have filed legislation called the SECURE CAMPUS Act that ends the China-to-United States pipeline of Chinese nationals receiving student visas for STEM fields. “The Chinese Communist Party has long used American universities to conduct espionage on the United States,” Cotton said in a statement. “What’s worse is that their efforts exploit gaps in current law. It’s time for that to end.” In short, Cotton and Blackburn’s plan would: Ban Chinese nationals from receiving student visas to the U.S. for STEM fields Ban Chinese nationals from working on federal R&D grants in STEM fields Require universities, labs, and research institutes recieving federal taxpayer money to confirm that they will not knowingly employ participants in China’s foreign talent recruitment programs Require China’s foreign talent recruitment program participants to register as foreign agents Require the State Department to publish a list of China’s foreign talent recruitment programs Blackburn said in a statement: ” Beijing exploits student and research visas to steal science, technology, engineering, and manufacturing secrets from U.S. academic and research institutions. We’ve fed China’s innovation drought with American ingenuity and taxpayer dollars for too long; it’s time to secure the U.S. research enterprise against [China’s] economic espionage.” As Breitbart News has chronicled, the U.S. legal immigration system remains hugely beneficial to China. From 2008 to 2018, more than 825,000 Chinese nationals arrived in the U.S. on green cards — an immigration status that provides them with permanent residency, a pathway to American citizenship, and eventually the ability to bring an unlimited number of foreign relatives to the country through the process known as “chain migration.” There are nearly 500,000 Chinese students in the U.S. in any given year — more than any other country — taking seats in university classrooms and looking to eventually obtain Optional Practical Training (OPT) visas to take entry-level jobs in white-collar professions. In Fiscal Year 2019, alone, Chinese nationals secured about 170,000 F, J, and M visas to arrive in the U.S. as students — more than any other country in the world.

And it needs to end.  It’s ridiculous!  Major kudos to Sens. Cotton and Blackburn for spearheading this effort.  Let’s hope it turns into a bill, and then into law.  Excellent!!    🙂

Trump pulls U.S. out of World Health Organization, slaps penalties on China over Hong Kong action

President Trump announced Friday the U.S. is terminating its relationship with the World Health Organization over its handling of the coronarvirus crisis, and took limited actions to punish China for misleading the world on the virus and for its security crackdown on Hong Kong. Mr. Trump also announced he was ending U.S. preferential treatment for Hong Kong, as Beijing moves to curb its autonomy. “Chinese officials ignored their reporting obligations to the World Health Organization and pressured the World Health Organization to mislead the world,” Mr. Trump said in a Rose Garden announcement at the White House. “The Chinese government has continually violated its promises to us and so many other nations. These plain facts cannot be overlooked or swept aside,” Mr. Trump said. Mr. Trump said the U.S. will redirect certain funding, amounting to hundreds of millions of dollars per year, that would normally go to the WHO. For weeks, the administration threatened to enlist other organizations to conduct health projects it would normally fund under the leadership of WHO. Mr. Trump also suggested China allowed the virus to spread around the world, but not within China. “The world needs answers from China on the virus,” Mr. Trump said. “We must have transparency.” Deaths in the U.S. from the virus topped 100,000 this week, and business shutdowns to slow the spread have thrown roughly 40 million Americans out of work in less than three months. The president will impose sanctions on Hong Kong and Chinse officials who are involved in restricting freedoms in Hong Kong. He also said the U.S. is suspending the entry of “certain foreign nationals from China” as potential security risks. He further announced a move to study “differing practices” of certain Chinese companies trading in U.S. financial markets “with the goal of protecting U.S. investors.” But the actions did not appear as broad or as harsh as U.S. investors had feared. Major stock indexes rose in trading after Mr. Trump’s announcement. Rep. Chris Smith, a leading congressional critic of China’s human rights record, said past administrations answered China with “cheap rhetoric,” emboldening Chinese President Xi Jinping to be ever more aggressive. “President Trump, however, is beginning to change that and is doing what previous presidents have failed to do,” the New Jersey Republican said. “For the sake of oppressed people, the United States — even if we have to go it alone — must impost sanctions.” The president said Beijing’s crackdown on Hong Kong “is a tragedy for the people of Hong Kong, the people of China and indeed, the people of the world.”

Indeed..  And we need to do much more to punish China.  But, this is a good first step by the Trump Administration.  And, hey..  It’s far more than Hillary or Joe Biden would ever do.

Sen. Josh Hawley Explains How to Take on China and Save America

On May 20, speaking from the Senate floor, Josh Hawley, the youngest member of the chamber, laid out his plan for fixing international trade, taking on the People’s Republic of China, and thereby, too, saving America. In so doing, Hawley, populist firebrand that he is, showed that he was willing to overturn the stale orthodoxies that have mildewed our economy and undermined our security. In his speech, Hawley laid out the core problem: The People’s Republic of China (PRC) has taken advantage of the flaws built into the current international economic system, embodied in the World Trade Organization (WTO), that agglomeration of unelected globalcrats. As Hawley put it, “We must recognize that the economic system designed by Western policy makers at the end of the Cold War does not serve our purposes in this new era.” He added, “And we should admit that multiple of its founding premises were in error.” Those founding premises, Hawley continued, trace back to the save-the-world utopianism of our 28th president, Woodrow Wilson. Having entered World War One in 1917, Wilson had some strange ideas; for one thing, it would be “a war to end all war,” and, he added, we must strive for “peace without victory.” Yes, such concepts might seem a bit, well, unrealistic; you know, like the musings of an ivory-tower professor. In fact, Wilson had been a professor and subsequently, in fact, he held presidency of Princeton University before winning the White House. So maybe now we can see the origins of his vaulting but vacuous phrasemaking. Indeed, without a doubt, Wilson was a great talker; he wove webs of words and theories that have bewitched many politicians since, inspiring them to be wannabe Wilsonians. For instance, there was George W. Bush, who said he heard “a calling from beyond the stars,” summoning America to wars of choice, aimed at “ending tyranny in our world.” Well, we know how that worked out. As Hawley said, “During the past two decades, as we fought war after war in the Middle East, the Chinese government systematically built its military on the backs of our middle class.” Exactly. While we were liberating Fallujah for the third or fourth time, the Chinese were hollowing out our economy. Of course, Bush wasn’t our only warlike president in the past two decades; we also had Bill Clinton and Barack Obama, both of whom launched foreign interventions as well, even as they were welcoming Chinese products and influence into the U.S. Indeed, as an aside, one wonders what Obama’s vice president, Joe Biden, thinks of all this: Has he learned the lesson of Iraq and other quagmires? Has he rethought trade with China? Those are certainly good questions to be answered during the remainder of the 2020 campaign season. Okay, back to Hawley. Having raised serious questions about the status quo, he offered three specific answers: First, we should withdraw from the World Trade Organization. As Hawley put it, the WTO was built on a false promise: the idea that the nations of the world would converge around a fair and non-manipulated trading system; as the Missourian put it, “they wanted a single liberal market to support a single, liberal international order that would bring peace in our time.” Yet in the decades of the WTO’s existence, the countries of the world haven’t come together on much of anything—except, perhaps, to snooker Uncle Sucker. And we might pause to note Hawley’s slyly ironic use of the words, “peace in our time.” That’s an allusion to the catastrophically mistaken statement of British prime minister Neville Chamberlain; back in 1938, Chamberlain made a wrongheaded deal with Adolf Hitler, which he said would bring “peace in our time.” Wrong! Yes, Hawley is saying, the stakes today are potentially that high; we can’t stay in an organization that has “not been kind to America.” He added, “The WTO’s dispute resolution process has systemically disfavored the United States”—and favored China. Second, Hawley says that having left the WTO, the U.S. should negotiate new trade deals on a more reciprocal and bilateral basis; that is, the U.S. should make a trade deal with, say, the United Kingdom—and then on to another deal with the next potential trading partner. As Hawley explained, “We must replace an empire of lawyers with a confederation of truly mutual trade.” Indeed, Hawley argues that a new focus on win-win trade deals—as freely determined by the two countries actually involved in the deal, as opposed supranational WTO-crats—deals that would offer a new opportunity for the U.S. to put together better alliances, based on mutually beneficial economic and strategic relationships: We benefit if countries that share our opposition to Chinese imperialism—countries like India and Japan, Vietnam, Australia and Taiwan—are economically independent of China, and standing shoulder to shoulder with us. So we should actively pursue new networks of mutual trade with key Asian and European partners, like the economic prosperity network recently mentioned by Secretary Pompeo. We might pause over one of the countries Hawley mentioned above, Taiwan. Its formal name is the Republic of China (ROC), an island nation whose capital is Taipei. In other words, the ROC is separate and very much distinct from the People’s Republic of China, whose capital, of course, is Beijing. The two nations split in 1949, when Mao Zedong’s Soviet-backed communists took over the mainland. In the decades since, the ROC, population 23 million, has become a prosperous and free country, while the PRC is merely … prosperous. (And, of course, menacing.) So it’s notable that Hawley has become a strong champion of Taiwan, which stands not only as a bulwark against the PRC, but also as proof that the Chinese people, if given a choice, will choose freedom. Third, Hawley wants to crack down on the ability of international capital, including Wall Street, to hopscotch the world—and step all over the people of the world. As Hawley explains about the current WTO dominion,

To continue reading, or see the video of Sen. Hawley’s (R-MO) speech, click on the text above.   Excellent!!      🙂

Senate passes bill removing rogue Chinese firms from US stock exchanges

The U.S. Senate has passed a bill boosting oversight of companies based in China and other nations that could lead to their removal from American stock exchanges. The vote on the measure, introduced more than a year ago by Sens. John Kennedy, R-La., and Chris Van Hollen, D-Md., comes as Congress and the Trump administration seek ways to punish Beijing for its initial handling of the COVID-19 pandemic. First identified in the Chinese province of Wuhan, the disease has infected 4.9 million people and killed more than 324,000. Efforts to curb its spread have halted global growth and sent unemployment in the U.S. spiking to nearly 15 percent, the highest since the Great Depression. The legislation’s focus on Chinese stocks stems from pre-virus concerns that Chinese firms listed on America’s exchanges are currently not subject to the same investor protection rules and accounting standards as U.S. companies, leaving small retail investors facing a higher risk of fraud. The bill, which passed on Wednesday, says that if the Public Company Accounting Oversight Board — a nonprofit established by Congress after the WorldCom and Enron scandals of the early 2000s — is denied access to a foreign stock issuer’s books for three years, the Securities and Exchange Commission will prohibit trading in the shares on U.S. exchanges. The legislation tells all the companies in the world that “if you want to list on an American exchange, you have to submit an audit and the SEC has the right to look at that audit, and audit the audit,” Kennedy said on the Senate floor. “And if you refuse not once, not twice, but three times — if over a three-year period, each of those three years, the company says, ‘You cannot audit my audit,’ then they can no longer be listed.” To become law, the measure titled the Holding Foreign Companies Accountable Act would still have to be approved by the Democratically-controlled House of Representatives and signed by the president. “After a decade of pounding the tables on the issue of China companies defrauding U.S. investors, we are encouraged to see this bill pass the Senate and we hope it becomes law,” Carson Block, short-seller and founder of Muddy Waters Research, told FOX Business in an emailed statement. “By listing in the U.S., these companies have ready access to U.S. retail investors’ money, and so long as China effectively remains a rogue country for U.S. securities regulation, its companies should not have access to our markets.” Fradulent listings of Chinese companies on U.S. markets have cost investors billions of dollars over the past decade. There were 156 Chinese companies listed on U.S. Exchanges worth $1.2 trillion as of Feb. 25, 2019, according to the U.S.-China Economic and Security Review Commission. Just this week, Luckin Coffee, the Xiamen, China-based beverage chain, received a delisting notice from Nasdaq after the company’s chief operating officer was found last month to have fabricated as much as $310 million in sales in 2019. Luckin shares debuted on the Nasdaq at $17 apiece on May 16, 2019, and reached a high of $50.02 on January 17, valuing the Starbucks challenger at as much as $12.02 billion. Its value had plummeted to below $700 million on Wednesday. China just needs to be “responsible and there needs to be no double standards,” Sen. Martha McSally, R-Ariz., told FOX Business’ Neil Cavuto on Wednesday. “If a U.S. company has to meet certain requirements and auditing to be on the New York Stock Exchange, shouldn’t we ask that of Chinese companies as well?”

Kudos to the Senate for FINALLY passing this important piece of legislation.  Now it goes to the Dem-controlled House…and God only knows what’ll happen with it there…

Frank Gaffney: Make the Chinese Communists Play by Our Rules

One of the dirtiest little secrets about the Chinese Communist Party (CCP) and its success in amassing immense power to oppress its own people and increasingly to threaten ours has just been exposed by President Donald Trump: We have been underwriting and, thereby, enabling it. In a decision last week, Mr. Trump – to his great credit – made plain this outrage and took a vital first step towards ending it. Now, we must finish the job. The urgently needed impetus to do that was provided when Donald Trump intervened personally to prevent the federal Thrift Savings Plan (TSP) from investing an estimated $4.5 billion in CCP companies currently registered in, and transferring immense wealth from, our capital markets to pay for their activities on behalf of “the motherland.” Some of those malevolent activities include providing the means by which the Party is able to monitor all aspects of the lives of 100 million Christians – and countless Uighur Muslims, Tibetans, Buddhists, and other Chinese – and to use such data brutally to repress them. Other CCP corporations selling stocks and bonds on Wall Street build weapons designed to kill our men and women in uniform. Some of them are being bought to destroy the rest of us and our country. Some of the Chinese companies raising money in our capital markets have actually been sanctioned by the U.S. government. Unbelievably, it may be illegal to do business with them, but it’s not illegal to invest Americans’ pension funds, college endowments, and personal savings so as to allow such proliferators and human rights violators to continue doing business. Fortunately, in executing the President’s stand-down order to the board that oversees the Thrift Savings Plan, National Economic Council Chair Lawrence Kudlow and National Security Advisor Robert O’Brien implicitly made clear in writing why it is unacceptable to have CCP companies like these getting money from any Americans, not just federal government employees, past and present, and their military counterparts: This action would expose the retirement funds to significant and unnecessary economic risk. And it would channel federal employees’ money to companies that present significant national security and humanitarian concerns because they operate in violation of U.S. sanction laws and assist the Chinese Government’s efforts to build its military and oppress religious minorities. […] The financial impact of this risk is significant: scandals involving Chinese companies in recent years have cost investors billions of dollars. Then, Messers. Kudlow and O’Brien explained how this could possibly be happening: “The Chinese government currently prevents companies with Chinese operations listed on U.S. exchanges from complying with applicable U.S. securities law, leaving investors without the benefit of important protections.” The trouble is that, to date, the institutions American and other investors the world over rely upon to provide such protections and, in so doing, make our capital markets secure and attractive – namely, the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) – have allowed the Chinese Communist Party to get away with refusing to play by our rules. Until now. What should have been unacceptable conduct thus far, is today – especially in the wake of the CCP virus and the other, burgeoning evidence of Communist China’s enmity towards us –intolerable. Consequently, 51 former senior U.S. government officials and legislators, influential financial sector figures, China experts, religious leaders, and other patriots have just issued an open letter urging that President Trump’s logic in the microcosmic TSP case be applied to the nation’s capital markets more broadly. Signatories of the open letter organized by the Committee on the Present Danger: China (CPDC) and sent on May 17th to SEC Chairman Jay Clayton and PCAOB Chairman William Duhnke wrote (emphasis in the original throughout): We welcome the President’s decision and strongly second the concerns he has rightly expressed about the lack of transparency, PCAOB covered audits and material risk disclosure by Chinese companies in our capital markets. The Chinese Communist Party’s claims that corporate financials and other such data are “state secrets” only raise further questions about the advisability of giving its corporations a pass on conforming to the same statutory and regulatory standards that registered American companies are required to meet. Put simply, Chinese companies are today receiving preferential treatment over their American corporate counterparts on your watch. […] The country needs strong leadership on this issue now. We believe President Trump has defined the requirements for Chinese companies to enjoy the benefits of having access to our capital markets. It is up to you both to enforce these requirements and genuinely protect American investors, as well as our national security and fundamental values, by ensuring that the risks associated with investing in Chinese Communist Party-tied securities registered with the SEC and listed on U.S. capital markets are as transparent and disclosed as are those of the registered securities of American corporations. Federal regulators must heed this urgent call for ending the preferential treatment they have thus far accorded Chinese Communist Party companies. Otherwise, similar, bipartisan efforts in Congress – notably those being mounted by Senate Banking Committee members John Kennedy (R-LA) and Chris Van Hollen (D-MD) – will likely shortly compel them to do so. By acting voluntarily and promptly to make the Communist Chinese companies play by our rules, Messrs. Clayton and Duhnke and their respective institutions will make a signal contribution to performing their statutory duties of protecting the integrity of our capital markets and prevent real reputational harm to U.S. exchanges that, as the open letter put it, “have long been and must remain the gold-standard for the financial world.”

Agreed!!   Thanks to Frank J Gaffney for that very enlightening, yet sobering, op/ed.  Frank is a former Asst Sec. of Defense under President Ronald Reagan, and is currently the Vice Chairman of the Committee on the Present Danger: China.  Excellent!!   🙂

Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

Plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere. Ninety-eight exploration and production companies in Texas with $75.7 billion of debt filed for bankruptcy from 2015 through 2020, according to the international law firm Haynes and Boone. That number is expected to grow even larger after West Texas Intermediate crude oil prices plunged 52 percent this year as stay-at-home orders designed to slow the spread of COVID-19 wiped out 30 million barrels per day of demand while Saudi Arabia and Russia ramped up production amid a price war. The companies’ vulnerability to foreign buyers raises the risk that the U.S. might lose control over valuable oil-producing lands in the Permian Basin, a swath of land in western Texas and southeastern New Mexico that helped the country become the world’s largest crude producer amid a shale boom. “We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission — the agency that regulates the state’s oil and gas industries. “I believe it’s a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United States,” he told FOX Business. A 2018 oil discovery in the Permian uncovered 46.3 billion barrels of crude, 281 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey. The discovery effectively doubled America’s oil and gas reserves and puts the country on a path for years of energy independence. A separate estimate from RS Energy Group found the discovery could be as large as 230 billion barrels. The oil industry is critical for the Texas economy, accounting for $16.3 billion of revenue in 2019 and about 10 percent of the state’s labor force. An oil worker makes about $132,000 a year, 1.6 times the state’s average wage. Exxon Mobil, Chevron, and BP are the major players in the industry, but there are also hundreds of companies that produce less than 1,000 barrels of oil per day. The scope of the industry reaches far beyond the oil and gas producers, also including midstream companies that operate pipelines, service rigs and more. To help smaller companies navigate the industry’s crisis, Christian said Texas is working on measures that include cutting regulations and permit costs. When the industry is prospering, such firms get bought out at a premium by the big international companies such as Exxon Mobil, leaving money in Texas and giving workers bonuses, Christian said. When markets sour, however, the firms can be snapped up at fire-sale prices. “The federal government should watch very carefully and raise their standards on who can buy,” Christian said. China and other countries are already “starting to look for deals,” said Malcolm McNeil, international practice co-leader at the law firm Arent Fox. He said that while recent volatility in oil prices has left some Chinese companies “cash poor,” those that have money are “going to be seeking bargains.” The uncertainty surrounding the outcome of the 2020 election will cause Chinese firms to “explore deals now, but wait to bargain-hunt until companies are really hurting” and there is more clarity on the political front, he added. Should President Trump win re-election, prospective acquisitions might be less appealing to Chinese buyers, given his administration’s prickly relationship with Beijing and efforts to limit Chinese control of vital U.S. resources. Any oil deal, unless it’s rudimentary, will likely involve the Committee on Foreign Investment in the United States (CFIUS), which would require arduous reviews. U.S. law prohibits foreign companies from directly holding many oil, gas and mineral leases, but does allow them to form U.S. corporations to make purchases. Chinese acquisitions of U.S. oil and gas companies have faced increased scrutiny since China National Offshore Oil Corporation in 2005 attempted a takeover of the El Segundo, California-based explorer Unocal, now a subsidiary of Chevron, causing public uproar. While that deal was blocked, the Chinese firm Yantai Xinchao Industry Co. in 2015 received CFIUS approval to forge ahead with a $1.3 billion purchase of oil assets in the Permian Basin owned by Tall City Exploration and Plymouth Petroleum. Stewart Glickman, an energy analyst at New York-based CFRA Research, told FOX Business that barring a “rapid V-shaped recovery in oil prices,” there are going to be a “fair number of new Chapter 11 filings.” While Texas is an attractive investment destination for companies from China and elsewhere, it’s difficult for them to “swoop in” and start acquiring acreage “like a vulture feasting on a carcass,” he said. Though companies from China, Saudi Arabia and elsewhere may have experience in oil and gas, shale is a “U.S. phenomenon,” Glickman noted. A more plausible way for foreign companies to gain access to the rock, according to Glickman, is to enter a joint venture that gives them financial exposure but not operational exposure. He added that such a route would also be the way to go for those seeking to gain access through midstream and downstream businesses. But while the tactic might help eager overseas buyers reach lucrative deals, such developments are precisely what Christian, the Texas railroad commissioner, hopes to avoid. “I don’t want to wind up five years from now with, all of a sudden, some foreign country shutting down production in Texas because they own it, and prefer buying from their own reserves overseas,” Christian said. “I think that would be inefficient use, and I would think it would threaten national security.”