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Beijing (dpa) – A Chinese state-owned news agency warned of a “bumpy journey in trade” with the United States and of China’s possible “retaliatory measures” on Wednesday, a day after the US blocked a merger between Chinese and US financial companies citing national security concerns.

Chinese mobile payments company Ant Financial was planning to acquire MoneyGram, but the merger proposal was rejected by the Committee on Foreign Investment in the United States (CFIUS), the companies said.

The 1.2-billion-dollar deal is the latest in a series of Chinese acquisitions of US companies blocked by the government panel amid rising US concerns about Chinese influence in key sectors such as technology.

Alex Holmes, Chief Executive Officer of MoneyGram, said in a press release that “the geopolitical environment has changed considerably” since his company and Ant Financial announced their proposed merger last year.

“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger,” Holmes said.

China’s official Xinhua news agency said in a commentary that the rejections are not surprising “as trade tensions between the two countries are flaring.”

“In the face of a rising China, the United States … feels uneasy,” Xinhua said, adding that US politicians have a “deep-rooted strategic mistrust toward China” and have adopted “an increasingly protective and isolationist approach.”

The two countries “are about to ride a bumpy journey in trade in 2018 if the US government goes its own way, and retaliatory measures by China could be on the table,” the commentary said.

Ant Financial is part of the Chinese internet conglomerate Alibaba Group and operates Alipay, China’s most popular online payment platform with 520 million users, followed by WeChat Pay, owned by rival Tencent.

The company aims to expand globally, with Alipay having already been integrated by some retailers across Asia and Europe.

In January 2017, right before US President Donald Trump took office, Alibaba founder Jack Ma told Trump he would create 1 million US jobs by enabling US small businesses and farmers to sell products online in China.

The Trump administration last year launched a probe into Chinese intellectual property and technology transfers and imposed anti-dumping duties on Chinese aluminium foil. At the same time, Trump has pushed for business deals in various sectors that he says are meant to reduce his country’s trade deficit with China.

 

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