Sun, September 30, 2012
Business > Economy

Chinese firm urges fairness in US purchase deal

2012-09-30 03:24:33 GMT2012-09-30 11:24:33(Beijing Time)  Xinhua English

An official with a Chinese company said Saturday that the company was shocked that the United States has blocked its wind farm purchase deal, adding it will seek "a fair and square result."

U.S. President Barack Obama on Friday prevented Ralls Corp., a company owned by Chinese nationals, 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 in 22 years that a U.S. president has blocked such a foreign business deal.

The move probably served Obama's campaign for another presidential term, said Zhou Qing, a legal affairs chief of the international development planning department of Sany Group, from which the two founders of Ralls come.

Established in 1989, Sany is China's largest engineering machinery producer. It has subsidiaries in the United States, India, Germany, Japan and South America.

"Examine their conscience, and the U.S. administration should find Ralls is not threatening their country's security," said Zhou.

He contended that there are some other wind farms with foreign investment backgrounds near the naval training facility, but they have never been accused of threatening the United States' national security.

"Furthermore, the Greek owners of the wind farms had not received any investigation before the purchase, but why so when it came to a company with Chinese background?" Zhou questioned.

"The block was probably serving Obama's campaign for another term, or serving the purpose of protecting the U.S. wind power industry," Zhou said.

Ralls is a company registered in the United States by Sany's financial chief Duan Dawei and its vice president Wu Jialiang in 2010.

It signed an agreement with Terna, a Greek-controlled company, to buy the four wind farms in March.

However, the U.S. Navy said in April that one of the wind farms affected the low-altitude flying of its training base. Ralls then moved the farm to another location and was in negotiations with the U.S. Navy over compensation.

The Committee on Foreign Investments in the United States, known as CFIUS, began to investigate in June.

The wind farms were ordered to halt production, all staff were denied entrance and the use of all equipment from Sany was banned at the end of July.

A severe order came in early August, demanding the removal of all completed facilities and banning equipment sales to any third party. It also ordered that all projects for transfer should acquire prior approval from the CFIUS.

However, the CFIUS failed to reach an agreement with Ralls on the decisions. The case was then transferred to the president, who has the final authority according to U.S. procedures.

"The decisions of the CFIUS were arbitrary and went against the Administrative Procedure Act. They were all about Ralls' threat to U.S. national security, but without a single piece of factual support," said Zhou.

"Even the U.S. government hadn't done any on-the-spot investigations," Zhou continued, adding that all the construction was done by U.S. companies.

In addition, all four wind farms had passed inspections by the Federal Aviation Administration, which means the relevant security concerns had been addressed, Zhou said. "Otherwise, the projects would not have passed the examinations."

Obama has been facing pressure in his campaign from Republicans, who have said that the U.S. has been losing many job opportunities in the manufacturing sector to China since Obama became president.

The two countries have seen increasing trade frictions in the new energy industry in recent years, with the United States' decision to impose anti-dumping taxes on Chinese photovoltaic (PV) manufacturers in May.

Zhou said Ralls will exert all lawful efforts to receive compensations.

"We'll seek a fair and square result," Zhou said.

Two Chinese IT companies, Huawei and Zhongxing, were also accused of threatening U.S. national security and attended the House of Representatives' hearing earlier this month to state their positions.

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US senators urge penalties on Canadian defense contractor for China deal

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