China: Bank Purchases and the U.S. Non-Response

The purchase of $5 billion stake in Morgan Stanley by China's new sovereign fund, the China Investment Corp., was announced Dec. 19. This is the third strategic linkup with an influential U.S. financial major in exchange for an infusion of Chinese cash and mainland business opportunities. The U.S. Congress typically kicks up a fuss each time a Chinese or other foreign company bids for a strategic U.S. asset, but so far not for U.S. banks. Since financial services companies wield significant economic and geopolitical power, it probably is only a matter of time before Congress speaks up about such purchases.