U.S. Congress urged to crack down on Chinese investment as Canada opens door
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.
Meanwhile, Chinese foreign direct investment in Canada totalled $5.2-billion (Canadian) in 2016, down from $10.2-billion in 2010, according to the University of Alberta's China Institute.
The congressional commission says China's authoritarian Communist Party exercises enormous influence over all Chinese corporations – whether they are state-owned or privately run.
"Some private Chinese companies operating in strategic sectors are private only in name, with the Chinese government using an array of measures, including financial support and other incentives as well as coercion, to influence private business decisions and achieve state goals," the report says.
Some Chinese firms even seek to obscure their dealings in the United States through the use of U.S.-based shell companies or try to drive down the value of U.S. assets through sophisticated cyberespionage campaigns and then acquire the firms, the report says.
National security agencies in both Canada and the United States have warned that companies owned or partly owned by the Chinese government are not merely profit-seeking operations; they are also prone to passing on information or technology to Beijing and making business decisions that could conflict with Canadian interests but serve the agenda of the Communist Party of China. The commission warns that China is increasingly closing its economy to foreigners – even as it leverages the openness of the United States and other market-based economies.
Large and lucrative portions of China's economy, including many high-tech sectors and financial sectors, are closed to foreign firms."
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