As Obama's chief science adviser is preparing a study that could lead to restrictions on Chinese investment in the U.S. semiconductor sector, the world's largest economy has again turned to protectionism against China.
The report, due to be published before U.S. President Barack Obama leaves office this month, recommends bolstering protection of industries critical to national security, which will give an excuse for the Committee on Foreign Investment in the United States (CFIUS) to poise a tougher stance towards Chinese investment.
While such a move would undermine not only China-U.S. cooperation, but also the U.S. domestic industries and its relationship with China as a whole, open and cooperative mindset in the United States will help overcome differences and benefit both sides.
First of all, business acquisitions are common commercial practices, and have nothing to do with national security, an excuse hyped by political speculators.
Taking semiconductor acquisitions as an example, such deals did not involve ultra-sensitive national security agency equipment but rather mass-produced, commoditized technology.
As China's economy and capital reserves have grown, it is natural to have an appetite for investing abroad. In addition, going abroad is a way for Chinese enterprises to gain international competitiveness.
For the United States, Chinese investment would not only help create jobs and invigorate domestic industries, but also, as Zachary Karabell, head of global strategy at Envestnet, said, "provide a path to greater security."
"The more money Chinese companies pour into the United States, the more motivation China has to maintain good relations and the more it has to lose if relations turn sour," noted the chief of the financial services firm.
Secondly, protectionism goes against the general trend of globalization, which has brought great benefit to most countries, and the advanced ones in particular.
Thanks to globalization and free trade, American consumers have gained from a wider choice of products with lower prices, while American companies have sold their products all over the world.
Though as one of the biggest beneficiaries, the U.S. administration has been obviously used to blaming China for its own economic ills and always kept suspicious of China's motives.
Rhodium Group, a New York consulting firm, said in a report released last month that "while the economic fundamentals and deal pipeline suggest that 2017 will be another boom year for Chinese investment in the U.S., the political realities on both sides pose a major downside risk to both pending transactions and new deal flow in coming months."
But the fact is that a trade war with China could do more harm for the U.S. economy than good. As Aimen Mir, Treasury's deputy assistant secretary for investment security, said, it is in the U.S. national interest to maintain an open investment policy.
"If instead we let our fears lead us to greater isolationism, we will surely lose," Karabell said.
