The Committee on Foreign Investment in the US (Cfius), has made headlines over the past year as Congress has worked to expand its powers to review deals with an eye on China’s investment in strategic industries.
Now the interagency body is targeting Chinese investment of a different nature. Chinese conglomerate HNA Group holds a majority stake in a skyscraper located near Trump Tower in New York, an arrangement, Cfius says, that poses a national security risk.
While Cfius has reportedly not yet told HNA why they must divest their stake, The Wall Street Journal noted on Friday that one of the tenants of the Manhattan skyscraper is a police precinct tasked with providing security to the US president’s New York base.
HNA acquired a 90% stake in the building, valued at US$463 million, months before Trump was elected.
“There is no seizure or forced sale of 850 Third Avenue underway or pending,” a spokesperson for HNA stressed. “There are unique facts and circumstances regarding the location of this particular property that did not exist at the time of purchase which have raised certain concerns, and HNA Group is taking measured steps to address them.”
This situation may be idiosyncratic, but the move demonstrates yet another way in which the Chinese overseas investment binge has been squeezed from both sides, following the Chinese government’s crackdown on what it has described as reckless spending abroad.
While Beijing still encourages investments in the technology sector, entertainment and property have become a target for restrictions. As this move by Cfius underscores, on the other side, US authorities are heavily scrutinizing investments from a country just recently dubbed as a “strategic competitor” by the Trump administration.