United States Veto of Chinese Bids for Pentagon Contracts Reflects “Cold War Mentality”

The amendment approved by the U.S. House of Representatives that would exclude all of the companies that are owned by or affiliated with the Chinese government to participate in tenders with the Department of Defense is a violation of international business and reflects a “Cold War mentality,” according to statements given by Chinese analysts Friday.

In light of the amendment, which was passed successfully by Congress in May, any business that is “owned or controlled by, directed by or from, operating with delegated authority from, or affiliated with, the People’s Liberation Army or the government of the People’s Republic of China or that is owned or controlled by an entity affiliated with the defense industrial base of the People’s Republic of China” cannot be contracted by the Pentagon.

Rosa DeLauro, a U.S. representative, said that the measure “will help guard American interests, not only for our national security, but also the innovation, job creation and long-term economic growth across the country that will allow the United States to remain competitive globally.”

However, various Chinese analysts’ opinions have agreed that the veto is a demonstration of the ever-increasing discontent of the United States toward the growing national power of China, worried over the eventual loss of their predominant world status.

Gu Guoliang, director of the Center for Arms Control and Nonproliferation of the Institute of American Studies,* said that the action is the most recent demonstration of their “Cold War mentality,” and it does not favor the development of a bilateral relationship.

“The global financial crisis has made the U.S. too politically sensitive,” said Zhang Yansheng, director of the Research Institute of Foreign Economic Relations and Trade for the National Development and Reform Commission, the biggest economic planning committee of China.

Zhang stated that the North American country should select the more delicate defense projects on its extensive list and contract them exclusively to national companies and at the same time allow the participation of foreign companies in the bidding for lesser projects.

“Barring Chinese state-owned firms from providing defense-related goods to the U.S. amounts to protectionism,” he added.

In recent years, the United States has blocked various projects of Chinese investment under the excuse of protecting its national security.

In 2008, an attempt by Huawei Technologies to lock in a deal to sell electronic equipment to the computer networking giant 3Com failed because of the “national security risks” that were supposedly involved. The deal would have meant $2.2 billion for the Chinese company.

Later, in 2010, their initiative to acquire the technology company 3Leaf came crashing down out of concern of a possible “misuse” of the company’s assets after it closed for business. And, also last year, the United States government blocked Huawei’s intentions to supply telecommunications equipment to wireless phone operator Sprint Nextel.

In three instances, failure was due to the United States’ “national security” concerns.

The attack on Chinese investments will neither serve Chinese nor United States interests, Gu assured.

During the China–U.S. Strategic and Economic Dialogue in May, the United States pledged to lift the veto concerning high technology exports to China and also agreed to accelerate the recognition process of China’s status as a market economy.

Nonetheless, the amendment was well-received by various representatives. Frank Wolf, one of the speakers, said that Chinese companies that have already tried to win Department of Defense contracts “are, in fact, Beijing and the PLA’s weapons.”**

“That statement has no foundation and is also mounting,” said Li Shuisheng, an analyst at the Academy of Military Sciences of China.

“The United States should stop mixing politics with economic issues. Otherwise, the political mutual trust and bilateral cooperation will be undermined,” said Li, who sees the amendment as a sample of U.S. reluctance to strengthen bilateral military exchanges.

*Editor’s Note: Gu Guoliang is the deputy director of the Institute of American Studies at the Chinese Academy of Social Sciences. Guoliang heads a new arms control center at the institute and is a renowned arms control expert with diplomatic experience.

**Editor’s Note: This quote, accurately translated, could not be verified.