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Western govts suspicious of Chinese investments [New Straits Time (Malaysia)](New Straits Time (Malaysia) Via Acquire Media NewsEdge) CHINA, with US$3 trillion (RM9.2 trillion) in its foreign reserves, is looking for investment opportunities around the world. Surprisingly, perhaps, it is discovering that its money is not welcome in certain countries. In December, Chinese ambassador Chen Yuming reprimanded Australia for banning Huawei Technologies, the Chinese telecom equipment provider, from participation in a proposed US$38 billion national broadband network to connect 93 per cent of Australian homes and businesses with optical fibre connections. He insisted that security concerns regarding Huawei were unfounded and that Australia had nothing to fear from China's rise. Australian Prime Minister Julia Gillard, explained: "You would expect, as a government, we would make all of the prudent decisions to make sure that that infrastructure project does what we want it to do, and we've taken one of those decisions." Huawei had problems in the United States as well. In October, the US House Intelligence Committee warned after a year-long investigation that it had come to the conclusion that two Chinese companies, Huawei and ZTE, were a national security threat because of their attempts to extract sensitive information from American companies and their loyalty to the Chinese government. This is not a new problem for China. In 2005, China's state-owned oil company CNOOC Ltd attempted to acquire the American oil company Unocal for US$18.5 billion. The bid triggered widespread opposition and the House of Representatives, in a lopsided 398-to-15 vote, expressed concern that the move "would threaten to impair" US national security. CNOOC then withdrew its bid. In 2009, another Chinese company, China Aluminum Corporation (Chalco), proposed to invest US$19.5 billion into the Australian- British mining giant Rio Tinto. This bid, too, was rejected following opposition by Australian political parties. A few months ago, US President Barack Obama ordered Ralls Corporation, owned by two executives of China's Sany Group, to divest itself of wind power projects in Oregon near a naval facility on grounds of national security. Obama's decision came after CFIUS, a US government inter-agency committee that reviews the national security implications of foreign investments, ordered a halt to the construction and operation of Ralls' four wind farms on the ground of national security. Iceland, in November, rejected a Chinese bid to acquire land ostensibly to build a resort featuring hot-air balloon rides and a golf course. Western countries, it appeared, view Chinese investment with suspicion and hostility. So, when Canadian Prime Minister Stephen Harper last month made the controversial decision to allow CNOOC to acquire the oil and gas company Nexen for US$15.1 billion, it was a major breakthrough. The deal, when completed, will be China's biggest overseas acquisition. However, Harper made it clear at a press conference that his decision was a one-off. The Nexen deal, he said, marked not the beginning but rather "the end of a trend". "To be blunt", Harper said, "Canadians have not spent years reducing the ownership of sectors of the economy by our own government only to see them bought and controlled by foreign governments instead." CNOOC is owned by the Chinese government. The US, too, is concerned about the activities of Chinese state- owned companies. Indications are that China's investment problems in the US will continue. CFIUS, in its latest annual report, concluded that "there is likely a coordinated strategy among one or more foreign governments or companies to acquire US companies involved in research, development, or production of critical technologies for which the United States is a leading producer". The Chinese state news agency Xinhua has called on the West to "drop bias toward Chinese investors". "For quite a while," Xinhua said, "Chinese investors have been discredited by some Western governments and media as a group of cash- rich predators and spies." This, it said, has "frustrated Chinese entrepreneurs' enthusiasm for foreign investments". In addition to Western suspicion of the motives behind investments, China is also facing mounting criticism of the lack of a level playing field where investments are concerned. David Cucino, President of the European Union Chamber of Commerce in China, voiced an increasingly common sentiment when he said that "open markets must be viewed as two-way streets. It is in no one's interests for this to lead to a closing of markets". While CNOOC was able to buy a Canadian oil company, foreign firms are not allowed to buy a Chinese oil company. China should realise that, unless it opens its markets, there will be an increasing tendency in the west to close their markets to China, in addition to national security concerns. * [email protected] * Twitter: @FrankChing1 (c) 2013 ProQuest Information and Learning Company; All Rights Reserved. |