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China Firms Worry On Business Barriers: US Official

BEIJING – A top US official Wednesday tried to ease fears among Chinese firms of barriers doing business in the US after a Washington committee accused two companies of posing a security risk.

BEIJING – A top US official Wednesday tried to ease fears among Chinese firms of barriers doing business in the US after a Washington committee accused two companies of posing a security risk.

Undersecretary of State Robert Hormats was speaking at a forum in Beijing to promote Chinese investment in the US, two months after the congressional committee said Huawei and ZTE should be excluded from government contracts because their equipment could be used to spy.

A US commission last month also asked lawmakers to consider tighter rules on investment by Chinese state-owned firms, warning they could pose economic as well as security risks.

The US-China Economic and Security Review Commission also said the world’s second-largest economy was likely to look to acquire US companies as it diversifies its more than $3 trillion in foreign reserves.

But Hormats, undersecretary of state for economic growth, energy and the environment, told Chinese companies and government officials at the Beijing forum: “Promoting Chinese investment in the United States is, of course, not without its challenges.

“I think this is something that we are all aware of and we need to address and to understand better and resolve.”

A high-level body, the Committee on Foreign Investment in the United States (CFIUS), vets companies over security concerns but Hormats said the number of firms that needed clearance before accessing the US market was relatively small.

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“We know, for example, that there are Chinese concerns about CFIUS. However, I would simply say one thing about that, which is that CFIUS is limited in scope to cases related to national security, and the number of transactions considered by CFIUS is in fact very few.”

Chinese investment abroad has soared over the past decade, in parallel with its huge economic growth.

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AFP 2023

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