Date
17 August 2017
China's Anbang Insurance Group Co. recently received approval to buy New York's famed Waldorf Astoria Hotel from Hilton Worldwide Holdings. Photo: AFP
China's Anbang Insurance Group Co. recently received approval to buy New York's famed Waldorf Astoria Hotel from Hilton Worldwide Holdings. Photo: AFP

China investors top US list of national security reviews

Chinese investors faced more scrutiny from a US national security watchdog than those from any other country in 2013, according to US official data.

China’s companies feel they are singled out by Washington, but the administration of President Barack Obama insists it doesn’t discriminate against any country and the increase in reviews of Chinese investors reflects higher investment flows from them, Reuters reported.

Data from the Committee on Foreign Investment in the United States (CFIUS) showed the panel in 2013 reviewed 21 investments proposed by Chinese firms or individuals.

That represented about a fifth of the 97 transactions that were reviewed because a foreign company was seeking an ownership interest in an industry that might be sensitive to US national security, the news agency said.

In 2013, China topped the list of covered transactions for the second straight year. Japan was next with 18 transactions, followed by Canada with 12.

Some of China’s most high-profile US investments have hit snags with US regulator in recent years. China’s Anbang Insurance Group Co. recently received approval to buy New York’s famed Waldorf Astoria Hotel from Hilton Worldwide Holdings.

China and the United States are discussing an investment treaty could boost the still relatively paltry levels of direct investment between the two countries, and Washington expects Beijing will raise concerns over CFIUS scrutiny around their treaty talks.

Most reviews arise from voluntary notices filed by companies, though CFIUS has the power to start its own investigations and companies often feel compelled to initiate the process.

In China, CFIUS review is the “most talked about issue” regarding an investment treaty with America, said Fang Jin, the deputy secretary general of the China Development Research Center, a leading Chinese government institute.

“Chinese companies represent a disproportionately high percentage of cases covered by CFIUS,” Fang said at a conference in Washington earlier this month.

That appeared to be the case in 2013, although US data might exaggerate this. Commerce Department figures show China accounted for just under 1 percent of US-bound foreign direct investment in 2013.

However, private estimates that include investments made through third countries like Singapore suggest China’s share of new FDI might be several times higher, the report said.

A senior Treasury official said the total number of transactions covered by CFIUS in 2014 was probably above 140.

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CG

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