Paulson repeats support for open markets waning

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Thursday that support for keeping U.S. markets open to foreign investors seemed to be slipping and said it was needed to maintain national economic strength.

"Unfortunately, the fear of foreign investment may be resurfacing," Paulson said at the beginning of a panel session at George Washington University on the importance of attracting foreign investment capital.

Since the September 11, 2001, terror attacks, foreign investment has faced scrutiny at times but only a small proportion of it comes under the toughest examination, he said.

"Clearly we must and we do take every precaution to protect our national security," Paulson said.

"This doesn't mean we should refuse investment capital that can create jobs and revitalize communities or that we should discourage it by raising concerns that foreign investment may not be as welcome as it was in the past," he said.

Paulson said strong flows of foreign direct investment were vital for maintaining national economic strength.