Controversy Around the Chicago Stock Exchange

With the age of globalization, economies around the world have become intertwined. However, it brings up the question of when to draw a line between globalization and one country encroaching on another's economy. The prime example of this is when Chongqing Casin Enterprise Group, a Chinese company, decided to buy the Chicago Stock Exchange.

On the surface level, it seemed like a great plan. The company would be able to revitalize the dying Chicago Stock Exchange and give it a much-needed economic boost. Chinese companies had already been investing in the American economy, and with the Chongqing Casin Enterprise Group at the helm, the Chicago Stock Exchange would be the hub of such investment from foreign countries.

Despite these benefits, many people opposed the plan, and the SEC even rejected the deal. First of all, having a company with ties to the Chinese government run a part of the American economy would give China immense power over the economy as a whole. Second, details of the plan were extremely vague and the ties of the investors were unclear. There was seemingly no reason for the company to buy the Chicago Stock Exchange, and the United States would be handing over involvement in their financial system. The result would be a deal where America had little to gain and would instead have losses because they would be giving China control and direct access to our economy. Furthermore, the United States has no ability to purchase Chinese stock exchanges.

The truth was that at the end of the day, the only people to benefit would be the Chinese. Using the Chicago Stock Exchange, China could launch cyberattacks, gain profit from American trade, and harm American consumers through business and personal data. While the benefits seemed appealing, a line between globalization and giving away our economy had to be drawn. Globalization benefits countries because there is more free trade, but when this begins to undermine the independence and economic abilities of a country as a whole, it needs to be stopped.


Sources :
https://www.chicagotribune.com/business/columnists/ct-chicago-stock-exchange-china-buy-robert-reed-0725-biz-20170724-column.html
https://www.foxnews.com/opinion/why-chinas-takeover-of-the-chicago-stock-exchange-would-have-been-a-very-bad-thing
https://www.nytimes.com/2018/02/15/business/china-deal-chicago-exchange-blocked.html

Comments

  1. AnonymousApril 9, 2019 at 1:23 PM

    Interesting post Sophia! I think often times we look at the positives of free trade but tend to overlook the harms that it can bring. However, I think this is often warranted because it's hard to completely know what the consequences of this free trade can bring about. Common negatives are as simple as job loss or working conditions, but it's hard to see these complex effects. Nonetheless, I still wonder to what extent can the effects of globalization be predicted? Along those same lines, how should we approach globalization knowing all the potential positives and negatives?

    https://smallbusiness.chron.com/negative-effects-trade-5221.html

    ReplyDelete
  2. AnonymousApril 10, 2019 at 5:44 PM

    Interesting post, Sophia! I never knew that at one point, a Chinese firm actually considered buying the Chicago Stock Exchange and gaining influence over the American economy. I understand why this plan didn't go through: while revitalizing the stock exchange could boost our economy, it comes at the expense of our autonomy. It's too risky giving so much economic power to another country especially as China would've had the powers of launching cyberattacks and even benefitting from our trade. In the end, I read that the stock exchange was sold to the Intercontinental Exchange (IE), which also owns the New York Stock Exchange.

    https://www.ft.com/content/b65878a6-38e1-11e8-8b98-2f31af407cc8

    ReplyDelete

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