Beijing appeals to US for fairness under investment law

The law signed Monday by President Donald Trump expands the authority of a government security panel to scrutinize foreign investments. (AP)
Updated 14 August 2018
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Beijing appeals to US for fairness under investment law

  • The law signed Monday by Donald Trump expands the authority of a government security panel to scrutinize foreign investments
  • Other governments including Germany and Britain also are uneasy about rising Chinese investment

BEIJING: China appealed to Washington on Tuesday not to misuse security concerns to hamper business activity after President Donald Trump signed a law that expands the jurisdiction of an investment review panel.
The law signed Monday by Trump expands the authority of a government security panel to scrutinize foreign investments. It was prompted by complaints Chinese companies were taking advantage of gaps in US law and improperly obtaining technology and possibly sensitive information.
“The United States should treat Chinese investors objectively and fairly and avoid making a national security review an obstacle to Chinese-US enterprises’ investment cooperation,” said a Commerce Ministry statement.
Other governments including Germany and Britain also are uneasy about rising Chinese investment, the communist Beijing government’s behind-the-scenes role and acquisitions of technology that might have military uses or is seen as an important economic asset.
The US security panel, known as CFIUS, reviews foreign acquisitions of American assets for possible security threats. Critics say legislation governing its powers, last updated a decade ago, was antiquated and failed to take into account tactics used by some Chinese companies.
The legislation signed by Trump expands CFIUS jurisdiction to cover entities that might own a minority stake in a company that makes a purchase. It also gives CFIUS authority to prevent loss of sensitive personal information.
The legislation also gives CFIUS authority to initiate its own investigations instead of waiting for a buyer to seek approval.
Lawmakers who proposed the legislation last year expressed concern that Chinese companies were using joint ventures with foreign companies or minority stakes in ventures to gain access to sensitive technology.
Last month, a proposed Chinese purchase of a German power company was blocked when a state-owned utility bought the company instead. German news reports said Berlin also planned to block a Chinese acquisition of an engineering company but authorities said later that bid was withdrawn.
Also last month, Britain’s government announced a proposal to expand its powers to block foreign acquisitions that pose security concerns. It would apply to deals in which a foreign buyer acquires as little as 25 percent of a company.
Germany and other governments also complain their companies are barred from buying most Chinese assets at a time when China’s companies are in the midst of a multibillion-dollar global acquisition spree.


Oil rises after US Navy destroys Iranian drone

Updated 19 July 2019
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Oil rises after US Navy destroys Iranian drone

  • The International Energy Agency is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day
  • Speculators have exited options positions that could have provided exposure to higher prices in the next several years

TOKYO: Oil prices rose more than 1 percent on Friday after the US Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.
Brent crude futures were up 82 cents, or 1.3 percent, at $62.75 by 0100 GMT. They closed down 2.7 percent on Thursday, falling for a fourth day.
West Texas Intermediate crude futures firmed 61 cents, or 1.1 percent, at 55.91. They fell 2.6 percent in the previous session.
The United States said on Thursday that a US Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The move comes after Britain pledged to defend its shipping interests in the region, while US Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Still, the longer-term outlook for oil has grown increasingly bearish.
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said.
“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday.
US offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.
Royal Dutch Shell, a top Gulf producer, said Wednesday it had resumed about 80 percent of its average daily production in the region.