China, Bacon and the Evolution of Uncle Sam

Sam Wilson was a New York meat-packer who was responsible for sending 2,000 barrels of pork, each stamped with the letters "U.S.," to American troops fighting the War of 1812. Though an acronym for the United States, it soon came to stand for a term of endearment for Mr. Wilson -- Uncle Sam. The nickname was personified into the now-famous icon, making pork an elemental part of this American lore.

This helps explain why the news that Chinese company Shuanghui International Holding Ltd. reached a $4.7 billion agreement to purchase Smithfield Foods elicits an American reaction different from those of previous Chinese acquisitions. And it's not just because China is on the verge of (figuratively speaking) owning bacon, an object of fanatical enthusiasm in the United States. The fact that the deal, if approved, would be the largest acquisition of an American company in history makes it more noteworthy in part because of the value we place on self-reliance.

Smithfield Foods, based in Virginia with a presence in 26 states, is the global leader in pork production and processing. It is the crown jewel in a multibillion dollar U.S. pork industry that is the world's largest exporter and employs practices that turn out higher yields and better product than competing nations.

Though China consumes more pork than any other country, followed by the United States, Shuanghui's purchase of Smithfield Foods is not just about increasing quality imports at a favorable price for the country's growing appetite for the other white meat. The primary object of the deal is the acquisition of Smithfield's breeding practices, brand reputation, and quality control. In other words, the deal's value is less in buying American pigs than it is in acquiring American prowess.

Smithfield's know-how and stature will help the Chinese pork industry combat some of the environmental and quality concerns that have plagued it. In 2010, inspectors found Chinese pork contained clenbuterol, an asthma medicine that just so happens to also produce leaner meats. And just over two months ago, 16,000 diseased pig carcasses were discovered floating down Shanghai's source of drinking water. By securing a respected brand and improving safety practices, China takes another step in ensuring its food security, an important part of its primary concern: maintaining internal stability.

For Americans, however, the deal comes at a time when many are wary of China's growing stature. Headlines are replete with news of China's owning a trillion dollars of our debt, its growing military capabilities, and cyber attacks against U.S. companies. And the growing footprint of Chinese purchases and investments in America can contribute to this circumspection. In the last few years alone, a Yankee Stadium train station, numerous high schools, AMC theaters, and oil and natural gas fields around the country are the results of Chinese capital.

Even in a global economy, Americans still hold on to a fiercely independent streak that served it well in the founding and western expansion of the country. The realization that China is a hugely important economic partner and a growing world power can strike a nerve of the nation's self-determination spirit.

But foreign investment remains desirable, particularly when American jobs and livelihoods are not threatened. And in a depressed economy from which the nation is just emerging, foreign investments have helped move projects forward that our banks couldn't, or wouldn't, support. In many ways, capital from overseas is a contributing guarantor of the modern version of the American Dream. So, despite any apprehension, most view the Smithfield purchase as a positive development.

The purchase still needs approval from the Committee on Foreign Investment in the United States, a federal committee that ensures the sale of an American business to a foreign entity doesn't present a national security threat. And though some have voiced food and environmental security concerns associated with Chinese ownership, the transaction is expected to receive approval.

Smithfield Foods, founded in 1936 by a father and son, is the quintessential American success story of a family business that grew into a global powerhouse. The Chinese bid for its ownership, however, does not necessarily have to detract from Smithfield's American Dream symbolism and national ethos, but instead may be viewed an example of its evolution.