In­vest­ing re­port called ‘un­fair’

Ad­vi­sory panel to Congress says China’s State-owned en­ter­prises should be barred from con­trol­ling US com­pa­nies

China Daily (USA) - - FRONT PAGE - By MO JINGXI in Bei­jing mo­jingxi@chi­ Zou Shuo and Reuters con­trib­uted to this story.

China sharply crit­i­cized a re­port on Thurs­day by a United States panel that sug­gested US law­mak­ers ban China’s Sta­te­owned en­ter­prises from ac­quir­ing US com­pa­nies.

For­eign Min­istry spokesman Geng Shuang said the re­port is based on “prej­u­dices and stereo­types” and stressed the im­por­tance of “a fair and good en­vi­ron­ment for Chi­nese in­vest­ment”.

The US-China Eco­nomic and Se­cu­rity Re­view Com­mis­sion’s an­nual re­port re­leased on Wed­nes­day said that the US Congress should pre­vent Chi­nese SOEs from ac­quir­ing or oth­er­wise gain­ing ef­fec­tive con­trol of US com­pa­nies.

“The re­port has again re­vealed the com­mis­sion’s prej­u­dices and stereo­types against China,” Geng told a daily news con­fer­ence in Bei­jing. He said he had no in­ter­est in com­ment­ing on the specifics of the re­port, which he called a “cliche” that has the same tone ev­ery year.

While Chi­nese com­pa­nies are asked to abide by lo­cal laws and reg­u­la­tions when in­vest­ing over­seas, China also hopes that other coun­tries will also play fair, he said.

China-US trade and eco­nomic co­op­er­a­tion is the “bal­last and pro­pel­ler” of the bi­lat­eral re­la­tion­ship, Geng said. The two coun­tries’ in­ter­ests have been closely in­ter­twined in such a way that this re­la­tion­ship is im­por­tant to both coun­tries.

“The healthy, sta­ble de­vel­op­ment of China-US trade and eco­nomic ties is in line with the fun­da­men­tal in­ter­ests of both coun­tries and their peo­ple. I be­lieve that the US side will con­sider the fun­da­men­tal in­ter­ests of its own peo­ple and adopt a pol­icy that is con­ducive to bi­lat­eral trade co­op­er­a­tion,” he said.

Ted Mo­ran, nonres­i­dent se­nior fel­low of Peter­son In­sti­tute for In­ter­na­tional Eco­nomics, said the Com­mis­sion as­serts that Chi­nese SOEs are a tool to ad­vance China’s eco­nomic and na­tional se­cu­rity ob­jec­tives, but it does not show how SOE ac­qui­si­tions of US and other for­eign firms threat­ens US na­tional se­cu­rity.

“For ex­am­ple, CFIUS con­cluded that Chem China’s ac­qui­si­tion of the Swiss firm Syn­genta did not pose a na­tional se­cu­rity threat to the US, even though Chem China is a state-owned en­ter­prise,” Mo­ran said. “The Com­mis­sion would have to per­suade Congress why it makes sense to un­der­take a fun­da­men­tal change in the CFIUS mandate.”

Ear­lier this month, 12 US se­na­tors urged the Com­mit­tee on For­eign In­vest­ment in the United States to reject a Chi­nese alu­minum com­pany’s pro­posal to pur­chase a US alu­minum prod­ucts maker, on grounds that it would dam­age the US de­fense in­dus­trial base.

The re­port comes at a sen­si­tive time as pres­i­dent-elect Don­ald Trump’s tran­si­tion team is pre­par­ing its trade and for­eign pol­icy agenda and vet­ting can­di­dates for key eco­nomic and se­cu­rity po­si­tions. Dur­ing the pres­i­den­tial cam­paign, Trump tar­geted China fre­quently and threat­ened to im­pose sting­ing tar­iffs.

How­ever, experts noted that the ad­vi­sory re­port is not legally bind­ing.

Al­most all of the com­mis­sion’s re­ports on China are neg­a­tive, said Li Haidong, a pro­fes­sor of US stud­ies at China For­eign Af­fairs Univer­sity. “The US should stop treat­ing nor­mal in­vest­ment as a po­lit­i­cal and na­tional se­cu­rity is­sue. Al­though some US po­lit­i­cal elites call for im­pos­ing re­stric­tions on China’s in­vest­ment, pro­pos­als are dif­fer­ent from con­crete deeds.”

Since Trump’s top pri­or­ity as pres­i­dent will be to im­prove the US econ­omy and em­ploy­ment, “trade and eco­nomic co­op­er­a­tion with China is es­pe­cially im­por­tant in this regard”, Li said.

“The com­mis­sion is just a sub-or­ga­ni­za­tion of the Congress,” said Tao Wen­zhao, a re­searcher of Sino-US re­la­tions at the Chi­nese Acad­emy of So­cial Sciences. Tao said he does not be­lieve it will in­flu­ence Washington’s trade pol­icy.

The 27th China-US Joint Com­mis­sion on Com­merce and Trade will be held in Washington, DC, next week and Vice-Premier Wang Yang will at­tend.

The re­port... re­vealed the com­mis­sion’s prej­u­dices and stereo­types against China.” Geng Shuang, For­eign Min­istry spokesman

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