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"China threat" theory still exists despite Nexen purchase


08:33, February 27, 2013

BEIJING, Feb. 26 (Xinhua) -- The China National Offshore Oil Corp. (CNOOC) said Tuesday it has closed a 15.1 billion-U.S.-dollar deal to acquire Canada's Nexen Inc.

However, the biggest overseas acquisition by a Chinese company hardly meant the end of the theory of "China threat" in the area of investment.

In fact, closing the deal with the Canadian energy group was not an easy job because approval was delayed twice thanks to the so-called "China threat."

In addition, although giving its go-ahead to the transaction, the Canadian government tightened the criteria for the purchase of Canadian companies by foreign firms, particularly in the oil sands sector.

Political reasons are a main obstacle for Chinese companies to invest in foreign lands.

The Rhodium Group, an American consulting firm specializing in contextual analysis of macroeconomic tends in Greater China, said in its latest report that national security concerns were an important factor in affecting China's investments in the U.S.

"The Committee on Foreign Investment in the U.S. (CFIUS) has interfered with several deals, and firms have seen their business diminished by intervention from U.S. government officials, members of Congress and the security community," it said.

Due to cultural and ideological differences, it is more difficult for Chinese companies to invest overseas than their Western counterparts. The Chinese firms need to draw lessons through various acquisitions, failed or successful, and make themselves more adaptable to the situation.

The Chinese firms, suffering a series of scuttled deals in the U.S.,have gradually learned to cope with the country's political and supervision systems, said an essay in the Wall Street Journal.

Those firms, in an effort to avoid conflict with U.S. regulators, are going after smaller investments and aiming for joint ventures or less formal partnerships rather than all-out acquisitions, it said.

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