Flush with hundreds of billions of dollars, China Inc. is still having trouble investing abroad, running into foreign security worries as it tries to acquire companies and resources.
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The latest casualty: A deal by a Chinese maker of telecom gear and an American private equity firm to buy U.S. tech company 3Com.
The bidders say they just want to make money. But acquisitions are a political minefield because many Chinese buyers are owned by or close to the communist government, feeding fears that Beijing might gain access to military technology or control of strategic resources.
"Where it looks purely commercial, everyone finds that acceptable, but where it touches on resources or security concerns, it just falls into a different basket," said William Hess, China analyst for the consulting firm Global Insight. "As soon as politics enters into the equation, it raises the risks for all parties. It's not just a business case."
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