🚨🚨 New (or at least new to the public) CFIUS case - US blocked Chinese company from acquiring a fertility clinic in San Diego. A few quick thoughts, based on this great in-depth reporting from CNBC here 1/ cnbc.com/2020/10/16/tru…
First, CFIUS secrecy remains a real challenge. CFIUS notes this happened "sometime during the Trump admin", but won't say when. Don't know who the acquiring company or the target was. So we have official sources confirming something happened but can't say what or when... 2/
That said, this report does have more than we normally get, which is a DOJ CFIUS official talking in general terms about, hypothetically, why action would be justified in this type of case. It's a small step toward public engagement, which is welcome 3/
They highlight two concerns with Chinese access to genetic info of Americans:

1) Sensitive info could be used as leverage in intelligence targeting (ie recruiting spies)
2) At scale, genetic info could help inform development of biologic weapons 4/
The article notes there is already a lot of Chinese investment in US fertility labs, as Chinese clients have become important customers. It's not clear to me what's different about this particular transaction, ie why this one was blocked and others weren't 5/
Finally, article also suggests CFIUS is working to distinguish "legitimate business deals" from security risks. I'm not sure this distinction really makes sense, and suggests a focus on rooting out 'nefarious' actors more than evaluating complex risks 6/
In any case though, this case is another data point showing how CFIUS is pivoting to increasingly focus on data privacy and technology questions (and China, of course), alongside Tik Tok, Grindr, Moneygram, Stay N Touch - and probably many more we've never heard of... 7/7

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More from @geoffreygertz

15 Oct
Japan expanding its supply chain policies, specifically focused on a "China+1" model - objective not necessarily reshoring, but avoiding concentration of production in any one country. 1/4

My reading of the investment incentives literature is that these kind of subsidies usually aren't that effective - most of the money ends up going to firms that were going to move anyways, with or without incentives. So we'll see. 2/4
Don't know the details here, but says "subsidies apply to products for which manufacturing tends to be concentrated in a specific country." Curious if there's some kind of H index threshold for eligibility - would allow for regression discontinuity to identify any effect? 3/4
Read 4 tweets
14 Jul
Excellent thread. I think a lot of the quick analysis in the US is misreading what happened here - IMHO this isn't a story about the UK hardening on China, it's about the persistent regulatory power of the US in global supply chains 1/
For example this description from the NYT suggests this is about the UK opting to confront China, views it as a threat, etc. 2/
But the UK gov'ts own explanation for the move doesn't suggest anything like this. They're quite clear: new US sanctions announced in May are going to make it difficult for Huawei to maintain its supply chains, which creates risks about reliability. 3/ ncsc.gov.uk/blog-post/a-di…
Read 8 tweets
17 Apr
Some great thought-provoking responses to this thread, so a quick follow-up on 3 related issues (/1)
A.Resiliency =/= domestic autonomy (@sarahbauerle)
B.What role for firms? (@LogTechEric, @sarahbauerle, @HeikoBorchert, @jeromelarosch)
C.Forums for coordination (@TGehrke_)
On A, I think I mostly agree w/ Sarah’s comments here. Certainly true that foreign production isn’t nec more vulnerable, & domestic production isn’t nec more resilient. /2
I see two dimensions in which states are reasserting autonomy: specific worry about dependence on China, & broader worry about being at mercy of ‘global markets’, and seeking more hands-on steering of globalization. Neither of these nec mean bringing production ‘home’. 3/
Read 19 tweets
16 Apr
There’s a global rush to reconfigure supply chains to reassert national autonomy and resilience. A brief thread on why, ironically*, this shift from globalism to sovereign autonomy may demand more int’l coordination, not less. 1/

*plz don’t @ me over definition of irony
First, for all the focus on Donald Trump’s economic nationalism, worth noting that other world powers are also acting to reconfigure supply chains. 2/
For instance, in a speech earlier today, EU Trade Commissioner Phil Hogan spoke on the need to ensure the EU’s ‘strategic autonomy’, including ‘building resilient supply chains, based on diversification’ 3/
Read 15 tweets
27 Mar
This article is a strong argument for invoking the DPA – the medical market has become a deeply dysfunctional Wild West, and desperately needs some top down coordination.

That said, I’m growing less optimistic on its prospects – a brief thread. 1/
Effective top down coordination in a crisis would be great. As that Post article shows, US hospitals are in the dark negotiating with shady middle men, bidding up prices against each other. No one knows where these goods are coming from. It’s a mess. 2/
But the recent record of the USG doesn’t give much reason to expect effective coordination. Partially this is about Trump himself, and the appointees/high level advisers around him, who don’t exactly inspire confidence. 3/

Read 9 tweets
8 Nov 19
I’ve been meaning to get around to writing up some thoughts on the @rodrikdani et al proposal for managing US-China trade, and prompted by some recent debates on here finally got around to it. A brief thread: 1/

My core point: There are two big issues on US-China trade -- A, how do you manage trade between countries with very different economic systems, and B, how do you manage trade between geopolitical rivals.

The proposal is a great answer to A, but doesn’t really answer B. 2/
For A, the proposal is to stake out a middle ground between deep integration and full decoupling. I won’t do full justice to it here, but I think they come up with a very sensible approach that at least could form a starting point for more specific negotiations. 3/
Read 12 tweets

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