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China

Sany pulls investment over Obama intervention

UNITED STATES: Sany Group has cancelled plans to expand its investment in wind in the US as the row over President Barack Obama's intervention to halt its controversial Butter Creek wind projects in Oregon.

Sany Group called a press conference in Beijing to speak out about the issue. It believes it has been given unfair treatment because of the upcoming US election.

Obama's decision at the end of September was the first time in 22 years that a US president has blocked a foreign business deal. Ralls Corp, an associate company of Sany Group, had bought the portfolio of projects in February from Greek developer Terna. The portfolio comprises four wind farms of 10MW each, using Sany's 2MW wind turbine.

But the Committee on Foreign Investment in the United States (CIFIUS) said that the project posed a security risk as the sites are within or near restricted airspace over a naval weapons training base.

Ralls Corp, an associate company of Sany Group, announced that it would sue Obama and CFIUS at the beginning of October.

"Before this incident happened, we were planning to expand our investment in US," Sany Group senior executive Xiang Wenbo said. "Wind power is a priority. It is a pity the plan has been smothered by the CFIUS in the cradle. CFIUS made us lose money and reputation. This is unacceptable."

Ralls Corp said it has suffered direct losses of $20 million due to the decision. The company claims it tried to mitigate CFIUS concerns by removing labels from the turbines and only using white turbines and blades. It also said that it tried to sell the project to a US company.

Sany Group entered the US seven years ago. It has set up two bases in Atlanta and Wisconsin, employing hundreds of US citizens. "We are actively seeking new proper projects for the wind turbines we have shipped to the US," said Wu Jialiang, general manager of Sany Electric.

He pointed out that there are some other wind farms with foreign investment backgrounds near the naval training facility, but they have never been accused of threatening US national security.

Xiang added: "You say I threaten national security. OK, I will not construct the wind farms. I take away my belongings. You say no. I sell the properties to US citizens. You say no. To make an analogy, a bit inappropriate, it seems we are dealing with an unreasonable local ruffian."

Though unclear of how much money and time it would spend and whether it could win the lawsuit, Xiang said that Sany would make clear its attitude when its rights and interests are hurt.

Dignity

"I think dignity is more important than money. It is not our way to eat humble pie when treated unfairly," said Xiang. "We don't have other choices."

Niu Xinchun, deputy director of China Modern International Relation Research Institute, said there are economic, political and election elements behind the case.

Industry officials said that during this election year when the US economy is mired in tepid growth and a high unemployment rate, both Democrats and Republicans are using China-bashing tactics to woo blue-collar voters.

Kara Alaimo, CFIUS spokesperson for International Affairs, declined to comment further on Obama's decision regarding Ralls Corp, citing what she described as the "obvious sensitivity of national security considerations".

CFIUS claimed in a court declaration in September that it advised Ralls not to proceed with construction until its case was considered, but that Ralls responded that it "needed to proceed to meet a deadline related to tax credits" and that it would assume the financial risk of this decision.

The case will be heard on 28 November. A Treasury spokeswoman said the administration believes the lawsuit has no merit and would defend its case vigorously.

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