U.S. ban on China's bids for Pentagon contracts reflects 'cold war mentality'
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An amendment passed by the U.S. House of Representatives that would exclude all companies owned by or affiliated with the Chinese government from U.S. defense deals violates international trade rules and reflects the U.S.'s "cold war mentality," Chinese analysts said on Friday.
Under the amendment, which was passed in May, any commercial firm "owned or controlled by, directed by or from, operating with delegated authority from, or affiliated with, the People's Liberation Army (PLA) or the government of the People's Republic of China or that is owned or controlled by an entity affiliated with the defense industrial base of the People's Republic of China" is now barred from receiving Pentagon contracts.
U.S. Representative Rosa DeLauro said the measure "will help guard American interests, not only for our national security, but also the innovation, job creation and long-term economic growth across the country that will allow the U.S. to remain competitive globally."
However, Chinese analysts said the ban shows America's growing unease over China's expanding national strength and concerns over the loss of its predominant status in the world.
Gu Guoliang, director of the Arms Control and Non-proliferation Center of the Institute of American Studies under the Chinese Academy of Social Sciences, said that the U.S. move to prohibit Chinese companies from receiving Pentagon contracts is the latest demonstration of its "cold war mentality" and is not beneficial to the development of bilateral relations.
"The global financial crisis has made the U.S. too politically sensitive," said Zhang Yansheng, director of the Research Institute of Foreign Economic Relations of the National Development and Reform Commission, China's top economic planning agency.
Zhang said the U.S. should separate critical deals from its numerous defense contracts and ban other countries' companies from receiving them, while allowing less important projects to be opened to bids from other nations.
"Barring Chinese state-owned firms from providing defense-related goods to the U.S. amounts to protectionism," he said.
In recent years, the U.S. has blocked several Chinese investments on national security grounds.
In 2008, Huawei Technologies's 2.2-billion-U.S. dollar offer to network equipment manufacturer 3Com collapsed because of "national security risks." Its proposed acquisition of the technology company 3Leaf was thwarted in 2010 amid concerns over claims that 3Leaf's assets would be diverted. Also last year, the U.S. blocked Huawei's bid to supply telecommunications equipment to wireless carrier Sprint Nextel.
All of these bids were complicated by so-called "national security considerations." The crackdown on Chinese investments is not in the best interests of China or of the U.S., Gu said.
The U.S. promised to lift its ban on high-tech exports to China during the China-U.S. Strategic and Economic Dialogue held in May, and agreed to speed up the process of recognizing China's market economy status.
However, the amendment was still welcomed by some representatives. Frank Wolf, a sponsor of the amendment, said Chinese companies, which have sought to compete for defense deals in the past, are "very much arms of Beijing and the PLA."
"His claim is groundless and a frame-up," said Li Shuisheng, an analyst from the Chinese Academy of Military Science.
"The U.S. should remove politics from economic issues. Otherwise, bilateral political mutual trust and cooperation will be undermined," Li noted, adding that the amendment signals America's reluctance to strengthening bilateral military exchanges.
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