Cold War mindset behind China's overseas investment

The recent international row over the intention of a Chinese company's Iceland deal suggests that more barriers are ahead for China to really join in the global economy.

These barriers cannot be easily overcome and remind people that the clear division of East and West remains deeply rooted, though the iron curtain has been raised for two decades.

Many significant commercial moves of Chinese companies, no matter mergers or direct investment, have come across similar conspiracy theories as the one the Zhongkun Investment Group faced when it planned to build a resort in an isolated part of Iceland.

Some analysts in the West have argued that the project, the first big one from a Chinese firm in Iceland, could provide a cover for China's geopolitical interests around the Arctic.

Media reports hinted there was a connection between the company and Chinese government, but the only evidence raised was the previous work experience of Huang Nubo, the company's chairman.

It's true he did work for a party department and the Ministry of Construction in the 1980s but quit in the early 1990s when many officials turned to business during the economic boom.

The implication of political motivations might stir controversy within the local community and hold back a project that very well may benefit both investors and locals.

Huang is only the latest victim of these so-called security concerns. Huawei, a private IT firm based in south China, has repeatedly faced such charges as it tried to win contracts or set up ventures in overseas markets.

Over the past three decades, the flow of money has been one way from developed economies to China.

As China's foreign reserves increase, and its economy becomes more closely linked with the global market, it's a natural option to take part in the intentional capital market. The government can buy foreign government debt and companies can be listed or invest abroad.

A two-way flow of goods and money should not surprise supporters of globalization, which stresses a free market.

Of course, Chinese investors are newcomers in the international market and doubts against them are understandable. It will always take time to build credibility; however, frequently categorizing business maneuvers as politically motivated makes it much harder.