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Canyon Bridge Capital Partners' planned $1.3 billion acquisition
of Lattice Semiconductor Corp was one of the largest attempted
by a Chinese-backed firm in the U.S. microchip sector and was
the first announced deal for the buyout fund, which launched
last year with a focus on technology investment.
U.S. regulatory scrutiny grew after Reuters reported in November
that Canyon Bridge was funded partly by capital from China's
central government and had indirect links to its space program.
Trump said in an executive order on Wednesday that Lattice and
Canyon Bridge "shall take all steps necessary to fully and
permanently abandon the proposed transaction" within 30 days.
"The move, which is detrimental to both America's growth and
global economic recovery, also runs counter to the
mutually-beneficial and win-win nature of China-U.S. relations,"
the Xinhua commentary said.
Security reviews of investments in sensitive sectors "should not
be used as a tool to implement protectionism", it added, echoing
comments by a Commerce Ministry spokesman last week.
Citing analysts who said Trump's decision was made with an eye
to the 2018 midterm election, Xinhua called it "penny wise and
pound foolish ... It is a short-sighted move to take
protectionist measures amid sluggish global growth."
"Chinese investment is not 'Trojan Horse' with hidden purposes,"
it said.
Trump is set to visit China in November.
"The two countries need to strengthen dialogue and
communication, promote cooperation and exchanges in various
fields and properly handle issues of common concerns. Only then
can China and the United States push forward the world's most
important bilateral relationship," Xinhua said.
(Reporting by John Ruwitch; Editing by SImon Cameron-Moore)
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