Following America’s treatment of Huawei Technology, China has decided that it’s high time the US made the process of reviewing investment on security grounds more transparent.
Earlier this week we reported that the US has advised the company to drop a US company that it bought in May or face the Committee on Foreign Investment in the United States (CFIUS)making a recommendation to the US president that the deal be blocked.
The case has been going on for a number of months following claims that Huawei failed to declared the acquisition of 3Leaf Systems, with the firm claiming that it did not require clearance in this instance.
The US has also moved to stop deals with Chinese companies in the past citing security concerns. Huawei got caught in the crossfire when its bid to take over U.S. network-equipment maker 3Com was turned down. Last year it also decided to block a deal with Sprint following security concerns about the company’s links with the Chinese military, a claim that’s been vigorously denied by Huawei. Huawei started life as a division of the military, and we guess it’s hard for it to live down its past.
However, China isn’t pleased that one of its babies is being bullied and wants to do something about it.
Ministry of Commerce spokesman Yao Jian said that these failed deals put a spanner in the relationship between China and the US, he added that he would like to see America treat Chinese companies in the same way as it would treat its children. This means he wants America to consider any acquisitions and buys separately from security issues.
And China is trying to show that it too can do the same with foreign companies. On Saturday it issued its own rules for reviewing mergers and acquisitions with foreign companies. It will now scramble a committee, which will review acquisitions targeting key companies in the national defence, and those in the transportation and equipment manufacturing and technology industries.