Treasury has prepared China investment restriction options: Mnuchin - Metro US

Treasury has prepared China investment restriction options: Mnuchin

By David Lawder

SANTIAGO (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Wednesday his agency has prepared U.S. investment restrictions on China for President Donald Trump to consider as part of his upcoming announcements on intellectual property actions against Beijing.

“We have worked on options for his consideration,” Mnuchin told Reuters in an interview.

Trump plans to announce his decisions in the investigation into China’s intellectual property practices on Thursday..

The president is widely expected to impose tariffs on some $60 billion worth of Chinese technology products and other goods to try to force policy changes in Beijing.

Key focuses of the probe are Chinese joint venture requirements for foreign firms that effectively force them to transfer technology to their Chinese partners. It also has targeted a Chinese drive to gain control of U.S. intellectual property through acquisitions of U.S. technology firms by state controlled firms and investment funds.

Investment restrictions on Chinese companies and tariffs were among the tools to punish China recommended by U.S. Trade Representative Robert Lighthizer earlier on Wednesday at a congressional hearing.

“I’m not going to get into any specifics of what we may do or may not do,” Mnuchin said. “We would be the lead agency on managing any investment restrictions or licensing.”


But Mnuchin also told Reuters that the administration would keep a dialogue open with senior government officials in Beijing to try to open China’s economy to U.S. companies and help shrink a gaping U.S. trade deficit.

“Our objective is to reduce it by us selling more goods to them, not us importing less goods,” Mnuchin said. “So I think to the extent they open up their markets on a free and fair reciprocal basis, we’ll reduce the trade deficit. That’s our objective.”

He said that he welcomed the promotion of Liu He to China’s vice premier in charge of financial and economic policy and looked forward to further discussions with him.

Mnuchin added that he welcomed recent comments from Chinese Premier Li Keqiang pledging more actions to open China’s economy further.

“I think when the president makes his decision, we’re going to move forward with that decision, but we’ll be open to listening to commitments that they may be willing to make,” Mnuchin said.

Mnuchin said smaller, private discussions with high-ranking Chinese officials will likely prove more productive than the large, public U.S.-China dialogues, such as the Comprehensive Economic Dialogue meetings last July.

But the Treasury took pains on Sunday to make clear that there had been no changes to U.S. policy towards China after a senior Treasury official said that the CED process had been canceled, a statement later retracted.

Mnuchin was in Santiago for a meeting with Chile’s newly inaugurated president, Sebastian Pinera, after participating in a G20 finance ministers and central bank governors meeting in Buenos Aires.

At the G20, Mnuchin emphasized that the United States does not want to start a trade war with China or any other trading partners, but was defending U.S. interests against longstanding unfair trading practices.

(Reporting by David Lawder; Editing by G Crosse and James Dalgleish)

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