Business loses as Bush bars Citic-GE bid for AsiaSat

The Bush administration's decision to stop a General Electric subsidiary from teaming up with state-owned Citic Group to privatise Asia Satellite Telecommunications Holdings is the latest in a long line of mainland-related deals that the United States has blocked for political reasons.

At the root is a policy put in place by former US president George H.W. Bush, father of the current president. On June 5, 1989, the day after the Tiananmen Square crackdown, Mr Bush issued a moratorium on all US military exports to the mainland, including satellites.

Shortly after, the US Congress passed laws banning satellite exports to China. There were two exceptions: the president could issue a special waiver on the grounds that either the mainland had achieved political and human rights reforms or the deal was in the US national interest.

What constitutes 'national interest' has since been a subject of keen debate in Washington, and it appears that Citic and GE's HK$2.3 billion bid for AsiaSat is the latest victim.

'The US Department of State has in correspondence with General Electric said it will not grant the approval necessary to implement the proposed privatisation,' AsiaSat said yesterday in an announcement on the scuttling of the deal.

As the leading regional satellite operator in the Asia-Pacific, the company makes for an attractive target. It serves more than two-thirds of the world's population with its three satellites: AsiaSat 2, AsiaSat 3S and AsiaSat 4. They provide services to the broadcast and telecommunications industries.

More than 240 digital television channels and 130 radio channels are now delivered by AsiaSat's satellites, reaching about 96 million households with more than 360 million viewers across the Asia-Pacific.