Obama blocks sale of German manufacturer to China

President Obama visits Berlin to give a speech in front of the Brandenburg Gate.
President-elect Trump visits President Obama in the Oval Office. The new US President is set to take US-Sino relations into unchartered waters. 

US President Barack Obama, in his final weeks in office, has blocked the sale of a German LED manufacturer to China, out of national security concerns.

The move comes as US-Sino relations enter one of their most turbulent periods in decades as President-elect Donald Trump questions the previously sacrosanct ‘One China’ policy, which has maintained calm in the South China Sea since the administration of Richard Nixon.

The German manufacturer, Aixtron, makes metal vapour deposition technology for the manufacture of LEDs, OLEDs, lasers and solar cells, as reported in LEDs Magazine.

Aixtron has a research and development centre in Sunnyvale, California, which gives the White House the right to have a say on the matter.

The US Committee on Foreign Investment (CFIUS) recommended to the President that he prohibit the multi-million dollar acquisition because of ‘unresolved US national security concerns regarding the proposed transaction.’

President Obama has decided to follow the CFIUS recommendation, Bloomberg reports.

The company announced two weeks ago that it and Grand Chip Investment, based in Fujian, China, were sticking with the deal and would attempt to mitigate the US government’s concerns.

CFIUS works in cooperation with key US governmental departments including Defence, State, Commerce and Homeland Security and is headed by the Secretary of the Treasury, Jack Lew.

Earlier this year the CFIUS terminated the sale of Philips’ Amsterdam-based Lumileds chip and automotive lamps business to China’s GO Scale after the body objected on national security grounds. Lumileds operates manufacturing and research centers in San Jose, California. The deal has since been completed.

The US position on China is only set to strengthen when President-elect Trump takes office next month. Trump has been consistently critical during the US election campaign of China’s attitudes towards international trade and commerce.

Trump has pledged to put a 45 percent tariff on Chinese imports. The President-elect has also consistently maintained that China has been devaluing its currency to burnish its own position in the international markets.

The President-elect’s comments on trade combined with his increasingly controversial stance on Taiwan is leading some international experts to fear that a trade-war could be in the offing in the future.