The US welcomes China’s investments even in energy and defence, Treasury deputy secretary Robert Kimmitt said on Tuesday, assuring the world’s second-biggest holder of US debt that America “will never become isolationist.” “There are only two areas of investments that are restricted in the US, that’s media and airlines,” Kimmitt said in Beijing after meeting former finance vice minister Lou Jiwei.
“I told Mr Lou that we welcome investments from around the world, and that we hope the Chinese would consider all kinds of opportunities in the US.” Lou will oversee the investment of $200 billion of China’s $1.3 trillion in foreign-currency reserves in overseas assets, resources and so-called strategic products. Opposition by US lawmakers scuttled an $18.5 billion bid by China’s state-owned Cnooc Ltd. in 2005 to buy Unocal Corp., a Segundo, California-based company that owns oilfields in Asia. China’s government said in March it would establish an investment agency modeled on Singapore’s Temasek Holdings Pte. to manage part of its foreign-exchange reserves, the world’s largest holdings of currencies.
Kimmitt, who arrived in Beijing on June 17 and leaves on Wednesday for Moscow, met Lou and officials of the central bank. His trip focuses on the premise of market access, that US markets will be opened to Chinese investors as long as Chinese markets are opened to US investors, he said.
“Only 113 foreign cross-border merger and acquisitions were investigated last year in the US because of possible national security concerns,” Kimmitt said. “That’s only 8% of all foreign mergers and acquisition transactions.”
Foreign direct investments, which made up 5% of America’s $13.3 trillion economy last year, provide 5.1 million jobs for American workers, he said. Kimmitt also spoke to Chinese officials about their recent sale of US Treasuries. “We did touch upon China’s continued diversification of their investment portfolio,” he said. “There’s a whole range of investment opportunities.” China, which owns more US debt than any foreign nation except Japan, sold a net $5.8 billion of Treasuries in April, the first drop in holdings since October 2005, according to Treasury Department figures that go back to 2000.