US firms warned of risks of China deals

WASHINGTON • The top US counterintelligence official said American firms need to be cognisant of the national security risks that could arise from selling to Chinese buyers or entering into joint ventures with them.

Mr William Evanina, the director of the National Counterintelligence and Security Centre, said it is understandable that executives and owners of American companies want to do the most lucrative deals, but they do not always understand the potential risks to national security. 

Mr Evanina's comments come as the Trump administration and lawmakers in Washington move to toughen the framework for reviewing acquisitions by foreign investors, especially those from China.

Congress is planning to reshape the Committee on Foreign Investment in the US (CFIUS) framework as concerns about China's deal-making have intensified in Washington.

"China is our No. 1 adversary with respect to economic espionage," Mr Evanina said on Thursday.

"Their ability to steal proprietary information and trade secrets is proficient and it's aggressive."

His comments show the extent of concern within the US intelligence community about China's push to acquire US technology.

Among the deals under review by the CFIUS are MoneyGram International's proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma, and Genworth Financial's US$2.7 billion (S$3.7 billion) sale to China Oceanwide Holdings Group.

Several proposed takeovers by Chinese investors have struggled to gain approval or fallen apart over opposition from CFIUS.

The latest came on Tuesday when Chinese investors, led by digital-map provider NavInfo, called off plans to buy a stake in counterpart Here Technologies.

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A version of this article appeared in the print edition of The Straits Times on September 30, 2017, with the headline 'US firms warned of risks of China deals'. Print Edition | Subscribe