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US Moves to Block Chinese Purchase of German Tech Firm Aixtron

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  • US Moves to Block Chinese Purchase of German Tech Firm Aixtron

US President Barack Obama on Friday moved to block a Chinese company’s purchase of German semiconductor equipment maker Aixtron by rejecting the inclusion of Aixtron’s US business in the deal.

The US Treasury Department said a review by the Committee on Foreign Investment in the United States (CFIUS) chaired by Obama found the risks posed by the deal, which could place sensitive technology with potential military applications in Chinese hands, were too great.

“CFIUS and the president assess that the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation,” the Treasury said in a statement.

It said publicly traded Aixtron SE’s expertise in technology key to making advanced compound semiconductors used for LED lighting, lasers and solar cells also has military applications.

Washington does not want to see such technology end up in the hands of the Chinese government-backed company which wants to buy Aixtron, Grand Chip Investment.

The Treasury said Aixtron’s US business is an important contributor to that technology.

In late October, the German government withdrew its initial approval for the 670 million euro ($714 million) takeover after Washington raised security concerns.

Citing German intelligence sources, Handelsblatt daily reported that the United States had expressed fears that China could use Aixtron technology to bolster its nuclear program.

After receiving the information, the German economy ministry said on October 24 that it would reopen its review of the deal.

– Chinese government role cited –

The US Treasury said Friday that Grand Chip is a German company expressly set up for the deal and is “ultimately owned by investors in China, some of whom have Chinese government ownership.”

It added that the deal would be financed by a unit of China IC Industry Investment Fund, a Chinese government-supported industrial investment fund designed to support the country’s integrated circuit industry.

The Treasury statement did not say what military application of the German company’s technology had concerned US officials.

Aixtron’s specialty is a technology for depositing thin layers of atoms on semiconductor wafers that are used in electronic devices and systems that produce, control and convert light. It is popularly used in making solar cells.

Chinese Foreign Ministry spokesman Geng Shuang warned against interference, in comments to AFP.

“This acquisition you mentioned is a normal business activity,” he said.

“Since it’s a normal commercial acquisition, it should follow the normal principles and the rules of the market. We hope that there will not be an excessive political interpretation on this acquisition or political interference in it.”

There was no immediate reaction from Aixtron or Grand Chip. In a November 21 US securities filing, the two said they were awaiting the US presidential review and that they “plan to continue to actively engage in further discussions to explore means of resolving the US national security concerns identified by CFIUS.”

If the US rejected the deal, they said there were no assurances that they would be able to proceed with the transaction.

CFIUS reviews foreign investments in US companies, and has both approved and turned down a number of Chinese takeovers in recent years.

In 2005 it blocked China National Offshore Oil Corporation’s bid for Unocal, and in 2008 electronics giant Huawei dropped its offer for US communications company 3Com before an expected rejection by the committee.

In 2014 it approved Lenovo’s purchase of IBM’s computer server unit, but early this year its concerns led to Dutch electronics giant Philips dropping a planned $2.8-billion majority share sale of its Lumileds lighting unit to Beijing-based GO Scale Capital.

Also early this year Chinese tech firm Unisplendour Corp dropped its $3.8 billion offer for 15 percent of US hard disk maker Western Digital before a CFIUS review.

But in August the committee gave its OK for state-owned China National Chemical Corp’s $43 billion takeover of Swiss pesticide and seed giant Syngenta.

The Treasury statement Friday said the CFIUS panel was not opposed to foreign investment and was only focused on national security issues.

“The president’s decision is specific to this transaction and is not a determination with regard to any other foreign direct investment from China or any other country,” it said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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COVID-19 Vaccine: African Export-Import Bank (Afrexim) to Purchase 270 Million Doses for Nigeria, Other African Nations

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African Export-Import Bank (Afrexim) Approves $2 Billion for the Purchase of 270 million Doses for African Nations

African Export-Import Bank (Afrexim) said it has approved $2 billion for the purchase of 270 million doses of COVID-19 vaccines for African nations, including Nigeria.

Prof. Benedict Oramah, the President of the Bank, disclosed this at a virtual Africa Soft Power Series held on Tuesday.

He, however, stated that the lender is looking to raise more funds for the COVID-19 vaccines’ acquisition.

He said: “The African Union knows that unless you put the virus away, your economy can’t come back. If Africa didn’t do anything, it would become a COVID-19 continent when other parts of the world have already moved on.
“Recall that it took seven years during the heat of HIV for them to come to Africa after 12 million people had died.

“With the assistance of the AU, we were able to get 270 million vaccines and financing need of about $2 billion. Afreximbank then went ahead to secure the $2 billion. But that money for the 270 million doses could only add 15 per cent to the 20 per cent that Covax was bringing.

He added that this is not the time to wait for handouts or free vaccines as other countries will naturally sort themselves out before African nations.

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China Calls for Better China-U.S. Relations

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China Calls for China-U.S. Relations

Senior Chinese diplomat Wang Yi said on Monday the United States and China could work together on issues like climate change and the coronavirus pandemic if they repaired their damaged bilateral relationship.

Wang, a Chinese state councillor and foreign minister, said Beijing stood ready to reopen constructive dialogue with Washington after relations between the two countries sank to their lowest in decades under former president Donald Trump.

Wang called on Washington to remove tariffs on Chinese goods and abandon what he said was an irrational suppression of the Chinese tech sector, steps he said would create the “necessary conditions” for cooperation.

Before Wang spoke at a forum sponsored by the foreign ministry, officials played footage of the “ping-pong diplomacy” of 1972 when an exchange of table tennis players cleared the way for then U.S. President Richard Nixon to visit China.

Wang, a Chinese state councillor and foreign minister, said Beijing stood ready to reopen constructive dialogue with Washington after relations between the two countries sank to their lowest in decades under former president Donald Trump.

Wang called on Washington to remove tariffs on Chinese goods and abandon what he said was an irrational suppression of the Chinese tech sector, steps he said would create the “necessary conditions” for cooperation.

Before Wang spoke at a forum sponsored by the foreign ministry, officials played footage of the “ping-pong diplomacy” of 1972 when an exchange of table tennis players cleared the way for then U.S. President Richard Nixon to visit China.

Wang urged Washington to respect China’s core interests, stop “smearing” the ruling Communist Party, stop interfering in Beijing’s internal affairs and stop “conniving” with separatist forces for Taiwan’s independence.

“Over the past few years, the United States basically cut off bilateral dialogue at all levels,” Wang said in prepared remarks translated into English.

“We stand ready to have candid communication with the U.S. side, and engage in dialogues aimed at solving problems.”

Wang pointed to a recent call between Chinese President Xi Jinping and U.S. President Joe Biden as a positive step.

Washington and Beijing have clashed on multiple fronts including trade, accusations of human rights crimes against the Uighur Muslim minorities in the Xinjiang region and Beijing’s territorial claims in the resources-rich South China Sea.

The Biden administration has, however, signalled it will maintain pressure on Beijing. Biden has voiced concern about Beijing’s “coercive and unfair” trade practices and endorsed of a Trump administration determination that China has committed genocide in Xinjiang.

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U.S. Supreme Court Allows Release of Trump Tax Returns

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President Trump Signs Executive Order In Oval Office Of The White House

U.S. Supreme Court Allows Release of Trump Tax Returns

The U.S. Supreme Court on Monday paved the way for a New York City prosecutor to obtain former President Donald Trump’s tax returns and other financial records as part of a criminal investigation, a blow to his quest to conceal details of his finances.

The justices without comment rebuffed Trump’s request to put on hold an Oct. 7 lower court ruling directing the former Republican president’s longtime accounting firm, Mazars USA, to comply with a subpoena to turn over the materials to a grand jury convened by Manhattan District Attorney Cyrus Vance, a Democrat.

“The work continues,” Vance said in a statement issued after the court’s action.

Vance had previously said in a letter to Trump’s lawyers that his office would be free to immediately enforce the subpoena if the justices rejected Trump’s request.

A lawyer for Trump did not immediately respond to a request for comment.

The Supreme Court, which has a 6-3 conservative majority included three Trump appointees, had already ruled once in the dispute, last July rejecting Trump’s broad argument that he was immune from criminal probes as a sitting president.

Unlike all other recent U.S. presidents, Trump refused during his four years in office to make his tax returns public. The data could provide details on his wealth and the activities of his family real-estate company, the Trump Organization.

Trump, who left office on Jan. 20 after being defeated in his Nov. 3 re-election bid by Democrat Joe Biden, continues to face an array of legal issues concerning his personal and business conduct.

Vance issued a subpoena to Mazars in August 2019 seeking Trump’s corporate and personal tax returns from 2011 to 2018. Trump’s lawyers sued to block the subpoena, arguing that as a sitting president, Trump had absolute immunity from state criminal investigations.

The Supreme Court in its July ruling rejected those arguments but said Trump could raise other objections to the subpoena. Trump’s lawyers then argued before lower courts that the subpoena was overly broad and amounted to political harassment, but U.S. District Judge Victor Marrero in August and the New York-based 2nd U.S. Circuit Court of Appeals in October rejected those claims.

Vance’s investigation, which began more than two years ago, had focused on hush money payments that the president’s former lawyer and fixer Michael Cohen made before the 2016 election to two women – adult-film actress Stormy Daniels and former Playboy model Karen McDougal – who said they had sexual encounters with Trump.

In recent court filings, Vance has suggested that the probe is now broader and could focus on potential bank, tax and insurance fraud, as well as falsification of business records.

In separate litigation, the Democratic-led U.S. House of Representatives was seeking to subpoena similar records. The Supreme Court in July sent that matter back to lower courts for further review.

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