President Obama ordered the Ralls Corporation, a company owned by Chinese nationals, to divest its holdings in four wind farm projects in northern Oregon earlier today. According to the Associated Press, this is the first time in 22 years that a U.S. president has blocked a foreign business deal by citing national security concerns. The wind farms are close to a U.S. Navy base where unmanned drones and electronic warfare planes are flown on training missions.
The move will almost surely be viewed by the Chinese as a sign that their investment is not welcome in the U.S., this despite a Treasury statement that the President’s decision is specific to this transaction. Beijing has repeatedly criticized the American government for not allowing Chinese companies to invest in the U.S. The most high profile of such blocked investments came in 2005 when the China National Offshore Oil Corporation (CNOOC) saw its bid to purchase California energy firm Unocal stymied by Congress. More recently, Huawei, a major Chinese telecommunications firm, had to unravel its purchase of 3Leaf Systems, also for national security reasons.
The President’s decision comes less than two weeks after his announcement that the U.S. was filing a WTO lawsuit against China for allegedly illegally subsidizing its auto industry. China has been the focus of significant negative attention by both presidential candidates, leading prominent China watchers to call for the Obama and Romney campaigns to stop using the PRC as a political football.
As columnist Benjamin Shobert noted in a piece just yesterday afternoon: “This week was a good one for the Pacific Northwest’s clean energy sector: one of the biggest land-based wind farms in the world came on-line in the little town of Arlington, Oregon.”
It is unclear at present how the withdrawal of the Ralls Corporation from northern Oregon will affect this sentiment. What is clear is that the President’s decision will likely make it more difficult for American officials, such as Ambassador Locke, to convince the Chinese that the U.S. is genuinely interested in PRC investment.