China faced most scrutiny in 2012 over investments in U.S.

WASHINGTON Thu Dec 19, 2013 7:33pm EST

WASHINGTON Dec 19 (Reuters) - Chinese companies faced the most scrutiny over their U.S. acquisitions last year, eclipsing British firms for the first time, according to a report issued on Thursday.

Chinese corporations filed 23 notices with U.S. regulators in 2012, up from 10 in 2011 and nearly quadruple the number in 2010, according to the Committee on Foreign Investment in the United States, or CFIUS.

This compared with 17 notices from companies from the United Kingdom last year, the report said.

CFIUS, an interagency group chaired by the Treasury Secretary, reviews transactions that would bring U.S. businesses under foreign ownership for national security concerns. Most of its reviews stay secret unless companies choose to disclose them, but once a year the group must file a report to Congress about general trends.

Speaking about the latest report, a senior Treasury official said the higher number of Chinese deals under review was consistent with growing Chinese investment in the United States.

There was $11.5 billion worth of deals by Chinese companies in the United States in 2012, which was a significantly higher figure than in any year other than 2007, according to Thomson Reuters data.

U.S. politicians are eager to attract Chinese investment as a source of new jobs and economic growth. And Chinese companies have also become more comfortable with U.S. deals, despite the 2005 rejection of China National Offshore Oil Corp's $18.5 billion attempt to buy U.S. energy company Unocal. CNOOC's bid was thwarted by fierce political opposition because of national security concerns.

CFIUS also recommended that U.S. President Barack Obama block a Chinese firm's acquisition of wind farms close to a U.S. naval training site.

But CFIUS cleared Chinese plans this year to buy Smithfield Foods, the world's largest pork producer, despite concerns among some U.S. lawmakers about food safety.

In its report, CFIUS also said it no longer sees that some foreign governments have a coordinated strategy to acquire valuable U.S. technology by buying U.S. firms, as it saw for 2011.

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