Chinese state media called the US attempts to block cross-border acquisitions of tech companies a “red flag” for the global tech sector.
The Global Times, a state-backed media outlet, said that efforts to thwart the purchase of a Korean tech firm by a Chinese company “represents a dangerous trend for the whole industry.”
The article comes after a US Securities and Exchange Commission filing about the proposed takeover of a South Korean chip manufacturer by a Chinese company and said the deal posed “risks to the national security of the US.” The SEC is awaiting a final decision from President Joe Biden about the deal.
The opinion piece argued that if the US’s challenge is successful “it could set a very bad precedent for global high-tech mergers and acquisitions” and “would give US technology companies a distinct advantage in terms of M&As at the expense of the chip industry of all other countries.”
In March, Wise Road Capital agreed to purchase South Korean firm Magnachip for a price of $1.4bn.
The deal caught the attention of Washington because of escalating rivalry between the US and China, particularly in the tech sector.
The Global Times accused the US of trying to take a “monopolistic role” in the global chip-making sector through its objection to the deal and said that South Korea and China have a mutual interest to produce semiconductors amid a worldwide shortage.
A worldwide shortage of semiconductor chips is causing supply chain issues across the globe.