Apple News Facebook Twitter 新浪微博 Instagram YouTube Friday, Jan 5, 2018
Search
Archive
English>>

Opinion: CFIUS review can't guarantee US technological dominance

By Wu Lejun (People's Daily)    10:01, January 05, 2018

Washington (People's Daily)-The planned merger of Ant Financial with US money transfer company MoneyGram International Inc. was rejected by a US government panel on Tuesday.

The two companies said in a joint statement that they had been unable to secure the approval from the Committee on Foreign Investment in the US (CFIUS).

CFIUS has so far not provided its reasons for rejecting the deal.

“The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago,” MoneyGram Chief Executive Alex Holmes said in a news release.

The failed merger once again showed that the Trump administration fears that foreign investments could jeopardize US national security, especially when the partnerships involve China, Russia and some other US adversaries which have special concerns.

CFIUS is directed to scrutinize inbound and outbound investment and technology transactions with these countries.

Last year, the US launched a Section 301 investigation into Chinese intellectual property and technology transfer, self-initiated probes into Chinese-made aluminum products, and denied China’s market economy status at the World Trade Organization.

CFIUS, a unit of the Treasury, is not responsible for reviewing mergers, acquisitions and takeovers by foreign entities. Only if CFIUS determines that a transaction poses national security risks can it make recommendations to the president, who has the final say.

In November, a bipartisan group of legislators introduced the Foreign Investment Risk Review Modernization Act, which aims to expand the jurisdiction of CFIUS and to allow the committee to oversee a boarder range of transactions that pose a threat to US national security.

“CFIUS reform is not a solution, but a start," said Adam Segal, an expert of the Council on Foreign Relations.

The proposed CFIUS reform might level the playing field by preventing China from acquiring critical technologies, which is only a small step to guarantee the US enjoys continued technological dominance.

Moreover, reforming the Committee on Foreign Investment in the US does not guarantee the US will maintain its technological advantage over China.

“Revamping CFIU - and going too far,” Dr. Gary Clyde Hufbauer, a senior fellow of Peterson Institute for International Economics, wrote in an article.

He said revamping the mandate of CFIUS would expand government bureaucracy, hamper the global competitiveness of US corporations, and subject the process to unwarranted political considerations.

He said that it could replace multilateral cooperation with unilateral restrictions on outward flows of “critical technology” to neutral or adversarial nations.

In January 2017, Ant Financial signed a deal to buy MoneyGram for $880 million. It later increased its bid to $1.2 billion after Euronet Worldwide Inc. submitted an unsolicited competing offer of about $955 million.

According to The Wall Street Journal, MoneyGram and Ant Financial said they now would focus on working together on strategic initiatives in the remittance and digital-payments markets. They also said that Ant Financial had paid MoneyGram a $30 million fee as a result of the merger being terminated.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji, Liang Jun)

Add your comment

Related reading

We Recommend

Most Read

Key Words