BEIJING: China’s commerce ministry said on Thursday it would carefully monitor US policies on inbound investments, stressing that the country opposes using national security as grounds to restrict foreign investments.
US President Donald Trump said on Wednesday he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.
The US Treasury Department has recommended that Trump use the Committee on Foreign Investment in the United States (CFIUS), whose authority would be enhanced by new legislation in Congress, to control investment deals. The legislation expands the scope of transactions reviewed by the interagency panel to address security concerns, Trump said. “China will closely monitor the legislation process and evaluate its potential impact on Chinese companies,” Chinese commerce ministry spokesman Gao Feng told reporters in a regular briefing in Beijing.
“China does not agree with (the US) tightening foreign investment conditions using national security as reasons,” he said.
The proposed investment restrictions are part of the Trump administration’s efforts to pressure Beijing into making major changes to its trade, technology transfer and industrial subsidy policies after US complaints that China has unfairly acquired American intellectual property through joint venture requirements, unfair licensing and strategic acquisitions of US tech firms.
Commerce ministry’s Gao also said cooperation between China and Europe would bring a “warm current” to the global economy as both parties strongly opposes unilateralism and protectionism.
On Monday, Chinese Premier Li Keqiang said at a joint news conference with French prime minister Edouard Philippe that he believed frictions and disputes between China and the United States could be resolved via talks. “There are no winners from Fighting a trade war,” he told reporters.
China to keep opening up
The Chinese government said in a white paper on Thursday that China will take steps to further open its economy, and that fulfilling World Trade Organization (WTO) entry commitments has never been the end-point of the country’s opening-up.
In the white paper, titled “China and the World Trade Organization”, the government reiterated that it pursues a trade strategy of mutual benefit and win-win, and that China will continue to open up in “a more comprehensive, profound and diversified way”.
China, which joined the WTO in 2001, is expected to issue a new “negative list” this week that sets out which of its industries are open to foreign investors, which sectors are open with conditions, and which are closed. It was first drawn up in 1995, and had been revised seven times.
In the new list, due to be announced by Saturday, China will either abolish or loosen foreign ownership restrictions in sectors such as energy, resources, infrastructure, transport and professional services, in addition to previously announced changes for the financial and auto sectors.
The pledge to widen access to Chinese markets and pursue a win-win strategy for China’s trading partners comes as Beijing remains locked in a tit-for-tat import tariff battle.
The US administration is due to activate US tariffs on Chinese goods worth $34 billion on July 6, with Beijing expected to retaliate in scale and in kind.
Against that backdrop, China has been looking for support from Europe to seek common ground against the United States, which is locked in a separate trade dispute with the European Union. China told France on Monday that it would buy more of its farm produce, hinted at future Airbus purchases, and pledged to work on market access. Britain’s finance minister said on Wednesday that Britain hopes to seize “unlimited opportunities” brought by China’s Belt and Road initiative. — Agencies
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