China says protectionist sentiment rising in U.S. as deals fall apart

BEIJING (Reuters) - China said on Thursday protectionist sentiment is rising in the United States and criticised Washington for blocking a high-profile Chinese takeover of a U.S. financial firm on security grounds.

Ant Financial's planned $1.2 billion purchase of transfer firm MoneyGram International Inc collapsed last week after a U.S. government panel rejected the deal over national security concerns.

It was the most high-profile Chinese deal to be torpedoed since Donald Trump was elected U.S. president a year ago on promises to put America first and protect U.S. jobs from foreign competitors.

"We've noticed recently that protectionist voices have been rising in the U.S.," Ministry of Commerce spokesman Gao Feng said in a briefing.

China was particularly worried about countries using national security concerns as a way to block foreign investment, he added.

Ant Financial is owned by Chinese internet conglomerate Alibaba Group Holding Ltd.

In another blow to the global ambitions of Chinese firms, Huawei Technologies Co's planned deal with U.S. carrier AT&T Inc to sell its smartphones in the United States also fell apart because of security concerns, people with knowledge of the matter said on Wednesday.

The failed deals come as the U.S. considers several new tariff moves in the coming weeks, including broad restrictions on steel and aluminum imports and punitive actions against China arising from an investigation into Beijing's alleged theft of intellectual property.

"(Trade) remains foremost in my mind as a risk for China because it's something they can't control," said Michael Spencer, chief Asia Pacific economist for Deutsche Bank.

"But my base case is that we will see more trade frictions this year than last, but that it's not going to led to a significant decline in real exports from China."

An editorial in the official China Daily on Thursday blamed the termination of the Huawei-AT&T deal on political pressure instead of business considerations, and said this threatened the kind of win-win deals China sought.

"This is not the first time U.S. politicians have stooped to mudslinging to prevent the entry of Chinese high-tech companies into the U.S. market on the pretext they pose national security threats," it said.

Washington's criticism of China's tightly controlled economy and restrictions on foreign investment rang hollow, it added.

"Its blocking of deals involving Chinese companies in sectors where it has traditionally had an advantage shows its criticisms have more validity if directed at the U.S. market," the editorial said.

(Reporting by Elias Glenn and Stella Qiu; Editing by Stephen Coates)