Feeding the dragon

WITH roughly a fifth of the world’s population but less than a tenth of its arable land, China has had to look outside its borders to feed itself. In the past, clumsy and sometimes corrupt state enterprises foraged in Africa and Latin America for farmland and commodities. Now, savvier Chinese firms are looking abroad for advanced technologies that can boost yields and efficiency at home.

This week, China National Chemical Corp pulled off a coup that advances China’s national goal of “food security”. ChemChina, as the state group is known, has already made a string of acquisitions in Europe, including Pirelli, an Italian tyremaker. On February 3rd it persuaded the board of Switzerland’s Syngenta, a big maker of pesticides and seeds, to accept its takeover bid. When completed, the $43 billion deal will be the biggest Chinese foreign takeover ever.

In accepting its Chinese suitor, Syngenta spurned a rival offer from Monsanto, an agribusiness giant. Syngenta was reluctant to fall into the arms of the American firm, whose aggressive attempts to promote genetically modified foods have caused a backlash in Europe. The combination of two of the industry’s giants would also have met with harsh regulatory scrutiny.

The Sino-Swiss deal should see smoother sailing. ChemChina has a much smaller presence in agribusiness than Monsanto. Because Syngenta has operations in America, officials there will probably review the deal for national-security implications. Last month the Committee on Foreign Investment in the United States blocked the sale by Philips, a Dutch group, of part of its lighting business to a consortium that included Chinese firms. Even so, it may approve this deal, as it did the controversial acquisition in 2013 of Smithfield, a pork producer, by Shuanghui Group.

Ren Jianxin, the politically connected boss of ChemChina, said the right things this week. He vowed that the running of Syngenta would remain in Swiss hands, with Michel Demaré, Syngenta’s chairman (who will be vice-chairman of the new group) cooing that the deal would “minimise operational disruption”. Mr Ren also promised the “highest corporate governance standards” and even hinted that a public flotation of the unlisted ChemChina may be in the offing “in the years to come”.