Emerging economies have been hit hard by the global crisis. This column assesses the nature and severity of China and Hong Kong’s vulnerability to the turmoil originating from the US. It warns that China cannot decouple from US financial and monetary conditions, so it must participate in coordinating international policy and manage its capital account openness.

When does a foreign acquisition of a company constitute a national security threat? This column says analysts may start by determining how “critical” the goods or services provided by the target of the proposed acquisition are. However, when competition among rival suppliers is high and switching costs are low, there is no genuine national security rationale for blocking a proposed acquisition, no matter how crucial the goods and services the target company provides.