Mark Collins – Dragon Devouring Eurotech, German Section–Obama Steps In

Further to this post, the outgoing US president gets tough (our PM noticing?):

Obama Moves to Block Chinese Acquisition of a German Chip Maker

The intervention in a Chinese company’s bid to buy a German semiconductor company, Aixtron [website here], comes after Chinese companies have spent billions to acquire technology in Europe and the United States. American officials have increasingly moved to stop such deals, but Chinese companies have shown growing adeptness in getting around those restrictions to strike up relationships that could someday lead to greater access to technology.

A statement from the Treasury Department said the administration blocked the purchase of the American portion of Aixtron’s business because it posed a national security risk relating to “the military applications of the overall technical body of knowledge and experience of Aixtron.”

It wasn’t clear whether other parts of the deal could be salvaged. Officials at the German chip company and its would-be Chinese buyer, the Fujian Grand Chip Investment Fund [website here], did not immediately comment.

By rejecting the deal, the Obama administration showed how far it would go to keep China from using its wallet to acquire sensitive technology from the West. It blocked previous Chinese technology purchases only indirectly, using an advisory panel of government and intelligence officials who can discourage — but not directly kill — foreign deals. That same panel earlier expressed skepticism over the Aixtron deal.

Last year the United States accounted for more than one-fifth of Aixtron’s sales. And nearly one-fifth of its more than 700 employees are based in the United States.

That indirect strategy kept Mr. Obama from looking like a free-trade opponent, especially when the company in question was not American, and softened any potential response from Beijing. But Aixtron and its Chinese suitor tested that strategy by plowing ahead despite the panel’s concerns, forcing Mr. Obama to act…

Related:

Chicom State-Owned Firms’ Investment in US: a Good Thing?

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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