Nexen deal shows how Chinese firms can do business in US
John Gong says China's 'going out' strategy faces many challenges, particularly in America
The fact that China National Offshore Oil Corporation's US$15.1 billion acquisition of Calgary-based Nexen went through successfully, with the required US approval, shows that direct investment capital flows from China are not always subject to political hijacking, as many on the mainland claim.
This acquisition came under US jurisdiction because of the Canadian company's oil and gas operations in the Gulf of Mexico. The group that handles regulatory oversight and approval of foreign investments in the US is an obscure inter-agency body of government called the Committee on Foreign Investment in the United States (CFIUS).
Its creation can be traced back to an executive order issued by president Gerald Ford in 1975. Today, members include the attorney general, labour secretary, director of national intelligence and several other cabinet members.
To be fair, while members are not entirely immune from ideological inclinations or insulated from political pressure, the process itself remains mostly bipartisan, as it adheres to a set of pre-determined principles unrelated to politics.
The committee typically examines the national security significance of the acquisition target and the consequences of foreign control.
