What if the Chinese become majority stockholders of US companies?

American business exercises great influence on the everyday social and political life of the United States. Today's large American corporation is more than just an organization to produce and market different products. It has political influence through its national business organization and its lobbyists. It supports its state and local representatives. It supports important nonprofit organizations such as the Red Cross, the Boy and Girl Scouts, as well as religious and educational institutions.

That is why any potential takeover of a U.S. company by foreign government-owned entities triggers anxiety and requires careful attention. It is more than economic clout that is acquired; it is social change, political influence and decision-making authority.

Corporate control is always a delicate issue; foreign control is even more delicate, and foreign government control is most delicate of all. Even the United States, the most open haven for foreign capital, has on occasion put limitations on foreign ownership in sectors such as defense, airlines and the news media.

While the trend has been to lift those restrictions, since the 19th century America has not faced the potential of extensive direct investment under the control of a single foreign government. That could be forthcoming from China over the next few years.

China's purchases of U.S. Treasury bonds has enabled the United States to finance large-scale import of Chinese goods. Sooner or later, however, China might consider a more aggressive reinvestment of its funds. This could take the form of significant investment in U.S. equities, either in the form of diversified portfolios of securities or as direct investment in and eventually majority ownership and control of sizable U.S. companies.