Hopeful Foreground for U.S Industry

Key words: IPO (Initial Public Offering), SAIC Motor Group

This article was telling about SAIC is one of GM’s key joint venture partners in China and their company had $ 33.6 billion in sales last year and ranked 223 on the Fortune Global 500. Typically, SAIC is GM is doing IPO in the U.S capital market right now. SAIC would like to buy some stake of GM which triggers a lot of controversies between opponents and favorers. The opponents mentioned this deal would exacerbate the trade deficit of U.S with regard to China would produce GM vehicles in its country and export to the U.S. More serious, they would attempt to reform GM as a Chinese nationalize company. However, the favorers proposed GM’s revenue would be hands down by SAIC is a giant who could resist all the risk and produce profits. Beside, GM would be able to share the potential automobile market in China. In the author’s opinion, SAIC would achieve its goal because this is an inevitable trend of automobile market and world economics.  In my stance of exported markets from the U.S, trading stake is not that bad and China would become a strategic partner of the U.S. If today U.S treasury approves GM to sell its stake to SAIC, it doesn’t mean economic aggression because either behalf would receive the pay off in the future. GM should take the plunge for cooperating with foreign investors, because this should be reinforcement for IPO and the company itself. At the end of 2009, Obama had focused on new energy resources which mean those are the renewable resources, and those would bring tremendous profits to the U.S automobile industry. In 2010, China national energy administration had issued that the state council had approved 5 trillion to develop new energy resources. Some economists pointed, China would export lots of technological product about new energy resources from the U.S by the U.S will be leading in this area at that point. GM should trade some of its stake temporally by the recession and IPO. That’s no need to complicate this situation, GM would just suffer a little bit sore but it could bring everything home in the future, and eventually we will get there, so be upbeat American.

Reference

Powell, B. (2010).A Chinese Stake in GM? Bravo! Retrieved from http://money.cnn.com/2010/09/21/news/international/SAIC_GM_stake.fortune/?section=money_latest