China’s plan of extending its food sector got a fillip when it successfully acquired the Virginia, US based Smithfield Foods China. The deal was of the tune of about $5 billion and according to reports the Chinese companies paid more than the face value of the company for acquisition. This raises eyebrows among US lawmakers who are desperate in their efforts to find out the real reason behind such a big business deal between the US and the China. Many are of the opinion that the business deal took place as it is favoured by the Chinese government. Many shop owners feel that if they have to trade with the Chinese government then they won’t have any say while sealing the deals.
Smithfield Foods China
Smithfield Foods China is a Virginia based pork processing firm and it is the largest pork manufacturer in the US. The company supplies pork food to around 40 countries across the world. Undoubtedly, Smithfield Foods China is a big company. The company has state of the art infrastructure to process pork. Reports suggest that on a daily basis the business butchers around 10000 pigs. Smithfield Foods China was taken over by a Chinese firm in what is stated as the biggest takeover in 2013. Many lawmakers, senators in US believe that China is behind such takeover and the country has some hidden agenda behind this. The US government tried to make sure that China does not interfere in its policy makings post the takeover of Smithfield Foods China.
Strained US-China Relations Causing Trade War
In the US pork is a popular food and people relish different types of pork delicacies. Also reports suggest that the relations between China and the USA got strained. Beijing says that the imposition of US tariffs on Chinese imports is to be blamed. Beijing reacted by imposing tariffs on Chinese imports of a number of products including pork. Amidst the trade war between China and the US, both the US and the Chinese companies are facing some tough times.