Chinese solar deal falls victim to US panel review

Source:Global Times Published: 2018/8/9 21:43:43

Solar deal falls victim to US panel review


A Chinese solar company has become the latest victim of increased scrutiny from US officials regarding Chinese investments, as the company was forced to drop its plan to purchase several US power stations.

Coming amid an escalating trade conflict between China and the US, the move signals an increasingly closed-off market in the US to Chinese investors, Chinese experts and industry insiders said, adding that the domestic solar industry will be able to weather such restrictions.

Shenzhen Energy Group, one of the main power generation companies in South China, has dropped a plan to buy three US solar power stations after failing to get approval from the Committee on Foreign Investment in the US (CFIUS), a government panel that reviews foreign investments for potential national security risks, according to a filing it sent to the Shenzhen Stock Exchange on Wednesday.

The company had proposed to acquire RE Mojave Holdings, RE Cantua Holdings and RE Arabian Holdings, which own three solar stations in California. The deal was valued at $232 million.

"The amount of the deal could not pose any threat to US national security," Tang Jun, president of Jiangsu-based Rietech New Energy Science Technology Co, told the Global Times on Thursday.

Tang said that the purpose of such deals for Chinese solar companies is to gain access to the local market and sales channels, not technology, since "apart from some advanced equipment, our technology in the sector is not inferior to that in the US."

The company said that "since we have not handed over any cash to the counter-party, the deal will not have a major impact on the company's financial performance."

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Thursday that the failure of the acquisition would not affect the development of the domestic solar and energy industry.

"Chinese companies like Shenzhen Energy have many other options when trying to enter overseas markets, such as Vietnam, India and the EU," Lin noted.

However, Lin said "It's not a surprise that the US would put more barriers on Chinese enterprises eyeing the US market, given the escalating trade tension between the two countries. Chinese companies should be mentally prepared for this."

The failed deal is one of several involving Chinese investment in the US recently, including Ant Financial's proposed $1.2 billion acquisition of Moneygram and HNA's $200 million investment in Skybridge Capital.

Meanwhile, US companies such as Tesla entering the Chinese market are getting green lights all the way, and it seems that the Chinese market is more open compared with the US now, said experts.


Newspaper headline: Solar deal falls victim to US panel review


Posted in: ECONOMY,COMPANIES

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