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On Friday, President Obama took the highly unusual step of blocking a Chinese company from building wind farms in Oregon.
The Chinese company, Ralls, is furious and has threatened to sue the president.
According to a statement issued by the Treasury Department, President Obama made the decision because of national security concerns: The proposed sites for the four wind farms Ralls wants to build are located in or near restricted airspace used by the Navy to test weapons.
In the current political environment, with Obama being attacked for being too weak on China, the decision smacks of politics. It also feels like tit-for-tat: China's government has prevented many American companies from aggressively pursuing projects in China, and complaints about China's brazen theft of U.S. intellectual property are widespread.
With China's economy growing ever larger and richer, and with the U.S. running a massive trade deficit, clashes like these are likely to become more common. Back in 2005, a bid by Chinese oil company CNOOC for American oil company Unocal triggered a wave of "China's taking over!" fears that were reminiscent of similar scares about Japan back in the 1980s. In the face of an intense political backlash, CNOOC withdrew its bid, but the broader issue isn't going to go away.
China is the beneficiary of a huge trade surplus with the U.S., which means that it is accruing an ever-larger pile of dollars that it needs to put to work. At the same time, China is desperate to secure the raw materials and resources it needs to continue its rapid economic growth. The combination--cash to burn and the need for resources--will likely prompt more Chinese companies to try to acquire U.S. assets. Given the clear tensions between the two superpowers, these moves will always become political.
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