More 'transparency' in US investment checks, urges China Commerce Minister

BEIJING (AFP) - The United States should be more transparent on security checks on foreign investments, China said on Friday, accusing "some legislators" in developed countries of maintaining a "Cold War mentality".

The issue is a bone of contention between Washington and Beijing, which has the world's largest foreign exchange reserves and is looking to diversify its assets.

Only one out of every three dollars Chinese companies propose to invest in the US was approved by Washington, Commerce Minister Chen Deming told reporters on the sidelines of China's National People's Congress parliamentary meeting.

"Some legislators in some developed countries still view the overseas investments of Chinese companies, particularly state-owned Chinese firms, with a Cold War mentality and ideology," he said.

The United States should be more transparent in its national security checks, he added. "We keenly hope the security examinations will be more open and transparent, and more predictable for companies," he said.

In one high-profile case, Chinese engineering giant Sany has sued President Barack Obama and the inter-agency foreign investment watchdog CFIUS for barring a multi-million-dollar wind farm project in Oregon on national security concerns.

In October last year a congressional committee said Chinese telecom firms Huawei and ZTE should be excluded from government contracts because their equipment could be used to spy.

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

But the US approved the takeover last year of Canadian oil producer Nexen by state-owned energy giant CNOOC, a US$15.1-billion (S$18.8 million) deal marking China's largest-ever foreign investment.

"It shows the United States is assessing the situation and adjusting their policies," Chen said, although he added that the approval had some "unfair and slightly discriminatory" terms.

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