U.S. Congress urged to crack down on Chinese investment as Canada opens door

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A U.S. congressional watchdog is calling for stricter oversight of investments or takeovers by Chinese companies and a ban on Beijing’s state-owned or state-controlled entities from buying U.S. assets – a dramatically different approach to China than the one Ottawa is taking.

The annual report to Congress by the U.S.-China Economic and Security Review Commission arrives shortly before Prime Minister Justin Trudeau is expected to begin free-trade talks with China that could ultimately see Canada relax controls over Chinese investment in this country.

The federal government has already signalled a greater willingness than the previous, Conservative government to open Canada’s economy to Chinese investment, allowing a high-tech takeover that was banned under former prime minister Stephen Harper to proceed and approving another one without a formal national security review.

 In contrast, the U.S. report says Washington needs to be vigilant as China expands investments in new technology and industries around the world such as robotics, artificial intelligence, information communications, biotechnology and agriculture.

“These investments lead to the transfer of valuable U.S. assets, intellectual property and technology to China, presenting potential risks to critical U.S. economic and national security interests,” the report says.

 Chinese investment in the United States has risen dramatically over the past half-decade, it notes. On a cumulative basis, the amount invested in key sectors rose to $46.2-billion (U.S.) in 2016 from $4.6-billion in 2010.
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