US tries to block Angang Steel's investment
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A bipartisan group of US lawmakers Friday pushed for a probe into a Chinese steel conglomerate's investment in a US mill citing concerns over national security and employment.
In a letter to US Treasury Secretary Timothy Geithner, 50 members of the US Congressional Steel Caucus showed concerns over China's Anshan Iron and Steel Group's recent investment in the American Steel Development Company, requesting the Committee on Foreign Investment in the United States (CFIUS) to launch an investigation.
"Anshan is China's fourth-largest steel producer and the product (sic) of massive Chinese government subsidies, and we are deeply concerned that their direct investment in an American steel company threatens American jobs and our national security," said the letter published on the official website for Pete Visclosky, a Democrat representative from Indiana and chairman of the caucus.
The State-owned steel producer, also known as Angang, inked a memorandum of understanding with the US steel firm in May to jointly invest in a $175 million rebar facility that is being built in Amory, Mississippi. It is reported that the joint venture's annual output will be no more than 300,000 tons.
"There is little evidence to substantiate the charges," said Ma Zhongpu, chief analyst with Umetal, a Beijing-based steel research company.
The US lawmakers' opposition will not necessarily block the deal, he added.
The US, however, has blocked investment from Chinese companies on national security grounds twice in less than a year.
Emcore Corporation, a US fiber optics producer announced in late June it abandoned a joint venture in partnership with China's Tangshan Caofeidian Investment Corporation, as the CFIUS "has certain regulatory concerns about the transaction".
Another State-owned company, Northwest Nonferrous International Investment Company was also forced to withdraw a purchase of 51 percent stake in Firstgold Corporation, a gold mining firm in Nevada, which is located near a US military base.
These actions were sheer protectionism, and will continue to have an impact on Chinese companies' overseas investment plans in the future, said Zhang Lin, an analyst with Beijing Lange Steel Information Research Center.
