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Speaking only in terms of business and marketing:   * For the time being, China’s weak link in pork production does seem to be the agricultural sector, while their manufacturing sector is more cost effective than ours with many products.  But I don’t see any reason why they cannot bring their ag sector up to the same level of competitiveness as ours, given some time.  Their only limitation is that they can’t keep up with their tremendous economic growth. So, if China has the competitive advantage in almost everything, why do they want to buy a U.S. pork producer?  Why not just buy the pork?   They have the money for the pork.  Why do they need a U.S. pork producer?  Well one reason could be that they have the competitive advantage in pork production, and they plan to become the world’s biggest pork exporter just like they export everything else.  The only problem is that their food production has a black eye.  Their poor quality is legendary, and food is personal.  Would you eat pork imported from Shuanghui in China?  That is the only obstacle to China being the biggest pork producer/exporter.  So, what they are buying is not a new source of pork.  What they are buying is the Smithfield brand.  I am referring to the brand reputation, and not just the name and logo.  Once, they buy Smithfield, the company will be a Chinese pork supplier, except it just won’t be based in China.  But even though the company will be the same U.S. pork producer as it was under Smithfield, I suspect it will be stigmatized to a large extent in the eyes of the U.S. market.  It will be very similar to the stigma of shipping kosher food in a container that once shipped pork, as was previously brought up here.  Nevertheless, some portion of the U.S. pork market will be retained.   And the rest of that market will probably return once it gets used to the idea of a Chinese pork producer that is in the U.S., and seems to not be causing any health problems.  But pretty soon, there will be pork going in both directions as the stigma against Chinese pork dissipates.  That then opens the door to China becoming the world’s largest pork exporter with most of the pork being produced in China with their competitive advantage. As it stands now, China cannot open that door to being the world’s largest animal protein provider because their food production reputation stands in the way.  Acquiring a company with a good reputation helps China repair their reputation.  This may indeed by a win, win—   for a while.
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