US 'national security' excuse backfires

Updated: 2012-10-19 13:26


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BEIJING - It was not a coincidence that Chinese construction equipment maker Sany Group sued US President Barack Obama and Chinese telecommunications company Huawei was cleared of espionage suspicions by a White House-ordered review.

These two Chinese companies were both blocked from investing in the US market for the reason of allegedly posing "national security risks."

The national security excuse has backfired, with some US politicians making something out of nothing.

Obama had issued a presidential order to prevent Ralls Corp, which is owned by two executives of Sany Group, from owning four wind farms in Boardman, Oregon, citing national security risks for their locations near the Naval Weapons Systems Training Facility.

It was the first time since 1990 that a US president formally blocked a business transaction or required a sale on such grounds.

The US House of Representatives Intelligence Committee recently issued a groundless report alleging that Chinese companies Huawei and ZTE posed a possible threat to US national security.

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The report recommended that regulators block Huawei and ZTE from buying US companies, adding that government computer systems should not include components made by them because they "might pose an espionage risk."

However, Wednesday media reports indicated that a White House-ordered review of security risks posed by the suppliers to US telecommunications companies found no clear evidence that Huawei had spied for China.

Xiang Wenbo, a Sany Group director, said at a Thursday press briefing that they had to sue Obama because he made an unjust ruling that had a huge impact on the company.

There are other wind farms, including 27 Danish wind turbines, in the area.

Sany had agreed to transfer or relocate the wind farms after objections were raised, but they were not allowed to. US authorities seized their property and assets without any compensation, behaving like "thugs," according to Xiang.

The move not only violated trade agreements reached between China and the US, but also flew in the face of the US Constitution, which protects private property. It will cast a deep shadow on bilateral direct investment between China and the US.

If it is a signal that Obama wants to send to Chinese investors, it would be a very bad one. Investors may rethink their decisions if their assets are handled without legal basis or business logic.

Bashing Chinese companies in the name of "national security" betrays the US spirit of openness.

Resorting to law shows Chinese companies' confidence in safeguarding their own interests.

Wu Jialiang, Ralls's chief executive and a Sany executive, said Sany launched the suit because it trusts the US legal system.

If Sany wins the case, it will be good news even for the American people, as it will prove that the US remains a country governed under the rule of law. If Sany loses, many Chinese entrepreneurs may be more wary about future investment in the US.