Wilbur Ross: Hopeful Biden backs up words against China with actions

China joining me right now is former u.s commerce secretary wilbur ross wilbur it's great to have you this morning thanks so much for being here i know you've got a lot to talk about in terms of your spac which has been so successful but let me start on china secretary because you and your colleagues in the trump administration did so much to try to keep china and the communist party accountable for bad behavior your reaction to what took place this last weekend with regard to the meeting in alaska between the ccp and the state department officials well i think both countries were trying each other on for size we started out with secretary blinken taking a very stiff point of view i think a correct point of view against china and then they came back with very strong rebuttal so now we had the first set of word games the real question is will there be follow-through will they continue the tough measures that we put into effect on china i was encouraged by my successor the new secretary of commerce making a very strong statement after meeting with the semiconductor industry association she seems to be very much in favor of our government helping them and that's important because tariffs do one thing which is to buy some time so you can build up american industry but the real answer we must have strong and competitive american companies who can be exporters in terms of semiconductors we now are down to a 12 share of global production of semiconductors and yet we consume about half the semiconductors in the world so we're a net importer of semiconductors and the reason is we don't have the fabricating capability there's a bill pending that has support from senator schumer i believe has support from pelosi to put something like 37 billion dollars into research and development then contribute toward new fabricating facilities in the u.s that's the kind of thing we need to reposition ourselves longer term yeah i think you make some really important points especially about semiconductors because these are the areas that the ccp wants to beat america uh and quantum computing is one of those areas that people are worried about if they beat us in quantum computing they will be able to break codes and and understand the us's strategy on a lot of levels the journal this morning is out with an op-ed on the alaska meeting and the wall street journal writes this is a dangerous moment as the world's rogue powers look to test Wilbur Ross the biden administration's resolve the anchorage lecture is a warning to take seriously writes the journal this morning wilbur your thoughts on what this means in terms of testing the administration let's face it on the way out the ccp put sanctions on people like mike pompeo peter navarro other people from the trump administration that was the beginning of the test for the biden administration well perhaps so i think it was more tit-for-tat in that we had put sanctions on a number of chinese officials so i think that was just going back and forth but it isn't just china who's testing the biden administration you notice shortly after biden put a hold on armed shipments to saudi arabia suddenly the houthis start shooting missiles and drones into the saudi oil field that's another kind of a test so it's iran it's china and it's russia those all three in sequence are going to be trying this on i hope he stands as firm as the words were in alaska and if he does and he backs it up with actions then i think things will settle down because they will probe for weakness yep well you're right and we're going to keep spotlighting this let's turn to your spac this is ross acquisition corp on the new york stock exchange listed for ten dollars a share uh the ross acquisition corp uh planning to sell 30 million units at 10 dollars a share how's it going what does it say about the larger trends in the spac landscape i know you've seen great interest from investors wilbur well our smack like most of them we filed with 300 million as the target amount but the underwriters were permitted to increase that by 45 million if there was enough demand turned out there was plenty of demand so they actually increased the offering to 345 million so we're very happy with that it was good market reception to my return to wall street semiconductors in fact are one of the industries that we've targeted for our spec and others are artificial intelligence advanced manufacturing electric vehicles and autonomous vehicles and renewable matters so we're trying to deal in the things that we view as being very important to the future of the country more generally these are all veterans yeah more generally specs have become a huge phenomenon 70 percent SPACs of all the recent initial public offerings have been spax and the amount of specs raised went from under 20 billion in 2019 to about 73 billion in 2021 2020 sorry and so far in 2021 in the first few months is more than the entire total for all of last year another 70 odd billion so between last year and this year it's about 150 billion between last year and this year so that's a lot of firepower out there question is is it too much then is too much of it in the hands of people who are not experienced and who are liable to overpay or buy things at a too early stage of development when it's hard to forecast what the revenues and earnings might be yeah so you've got to be thinking about that question as well wilbur how does it work you decide the industries you want to target and then you look to identify companies private companies within those areas whether it be semiconductors or electric vehicles or ai and then acquire those companies taking them public in the process yes what happens is the consideration that a spec gives to the private entity is a combination of the cash that's in the stack in our case 345 billion plus the issuance of shares so it's very often the case that the private owner ends up with half or maybe even more than half the equity in the combined company in addition there's a relatively new phenomenon called pipes private investment in pub public equity and there are institutions many of which are our shareholders now who buy into this back in the hope that it will need more funding to do a larger deal later on and so they're there to get acquainted to be on the scene then play a role with giving this back more money so that it can do a bigger deal really fascinating stuff wilbur congratulations on this incredibly successful spec we'll be watching your acquisitions in the future good to see you this morning wilbur thank you