Chinese ministry regrets Huawei's dropping deal to buy 3Leaf assets

BEIJING, Feb. 21 (Xinhua) -- China's Ministry of Commerce (MOC) said Monday it regrets Huawei Technologies Co.'s withdrawal of its agreement to buy the assets of 3Leaf Systems while under pressure from a U.S. panel.

The MOC said in a statement on its website that it hopes "relevant parties" in the United States would "abandon prejudice, avoid protectionist measures and treat properly investments from China and other countries" with a fair, just and open attitude.

The MOC statement came after the Committee on Foreign Investment in the United States (CFIUS) last week recommended opposing the Chinese telecommunications equipment manufacturer's agreement to acquire assets and technology from 3Leaf Systems, on "national security" concerns.

In the statement, the MOC called Huawei's planned acquisition of 3Leaf's technological assets "a normal business move" based upon market economy rules and its own development needs.

"In recent years, some relevant parties in the United States have used various reasons, such as national security, to hamper Chinese firms' trade and investment activities in the United States," the MOC statement said, adding: "Such obstructions have already had an impact on the Sino-U.S. economic and trade cooperation."

"We believe an open, just and transparent trade and investment environment is good for economic growth for both China and the Untied States and can help facilitate the world economic recovery," the MOC statement said.

Huawei is China's largest telecommunication equipment maker and the world's second-largest manufacturer of telecom equipment following Telefon AB L.M. Ericsson. It has tried several times to tap the U.S. market in recent years, but all attempts failed due to the same "national security" reason from the U.S. side.

Some U.S. Congressmen believe Huawei's acquisition of 3Leaf, a company founded in 2004 that develops cloud computing technology, would threaten national security and "pose a serious risk to U.S. computer networks."

Huawei planned to purchase the 3Leaf assets for 2 million U.S. dollars in May 2010.

Previously, the U.S. government rejected investment bids by several Chinese companies on national security grounds, including a joint bid worth 2.2 billion U.S. dollars by Huawei for the U.S. technology firm 3Com in 2008.


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