NEW YORK (TheStreet) -- Despite its low chance of success, China's Tsinghua Unigroup's bid for U.S. chipmaker Micron (MU) is yet another sign of China's rising economic power in the world -- one policymakers shouldn't ignore.
This week, Tsinghua Unigroup reportedly made a $23 billion offer to acquire Micron, one of the world's largest memory-chip makers and a U.S. company.
The important thing about this possible transaction is that it speaks to changes that are taking place globally that must be incorporated in the thinking of U.S. leaders.
This isn't the first time a Chinese company has bought a U.S. one. Up to now, the largest acquisition to go through was the $4.7 billion acquisition of pork producer Smithfield Foods (SFD) by Shuanghui International Holdings. And the publicity of Alibaba's (BABA) IPO and public listing brought attention to Chinese commerce in the United States.
This activity is going to grow. This is a part of the new world. And the United States and its leaders are going to have to get prepared for it.
But, getting prepared for the new economic era is going to require a change in how people think. Over the past century, countries concentrated on their own national sovereignty and the policies and programs that seemed to satisfy their individual goals and objectives. Over the past fifty years the United States could just concentrate on inflating its economy while letting the value of its currency drop by more than one-third against other major currencies.
This is all going to have to change. The new economic era is going to require it and this will take a lot of new thinking.
In this new economic era, the United States is not the hegemon of the world economically, politically, and militarily, and others, like China and the European Union, might play equally important roles.
Unfortunately, so far, it looks like the U.S. isn't moving with the changing tides. Its lack of response to the efforts of China to have its currency achieve full reserve status throughout the world and its failure to respond to the efforts of China to form an Asian Infrastructure Investment Bank indicate a lack of preparedness -- or willingness to face reality.
Chinese leaders have been thinking about this new era for some time. Some of the leaders in the European Union are already thinking about it. It is time for America's leaders to give more thought to it. The new era is not going to go away.
To be sure, the Micron deal will probably not go through.
There isn't yet indication that a formal offer has been made. And $23 billion, although by far the largest transaction between a Chinese firm and an American firm, would be far below an acceptable price to shareholders.
Even though Micron's stock has been trading at a value near this amount, not too long ago the stock value of the company was around $35 billion. David Einhorn, manager of the hedge fund Greenlight Capital who is one of Micron's largest shareholders, thinks the market value of the company should be north of $40 billion. (It has been suggested that Unigroup's bid is just an effort to test the waters, investigating where the negotiating should begin.)
But, there is a second potential hitch to such a deal. The transaction would have to be approved by U.S. regulators and because of the security issues related to the acquisition it is hard to believe that approval would be forthcoming.
It should also be noted that the U.S. has complained in the past that China has blocked the operations of American technology companies in China. So, there is the possibility for some gamesmanship in this area as well.