POLITICS | Wed Nov 16, 2016 | 10:32am EST

U.S. panel says China state firms should be banned from buying U.S. companies

A U.S. congressional commission charged with monitoring security and trade links between the United States and China has recommended that CFIUS, the body that vets acquisitions from foreign firms, be required to block purchases from Chinese state-owned companies.

In its annual report to the U.S. Congress, the U.S.-China Economic and Security Review Commission said on Wednesday the Chinese Communist Party has used state-owned enterprises (SOEs) as the primary economic tool to advance and achieve its national security objectives.

"The Commission recommends Congress amend the statute authorizing the Committee on Foreign Investment in the United States (CFIUS) to bar Chinese state-owned enterprises from acquiring or otherwise gaining effective control of U.S. companies," the report said.

The suggestion, one of 20 recommendations made to Congress, comes just a week after the election of Donald Trump, who has repeatedly blasted China's trade policies while on the presidential campaign trail and proposed slapping a 45 percent import tariff on Chinese goods. Trump's transition team is currently formulating policies and choosing personnel to fill key economic and security positions.

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