Ties to China Weren’t a Problem. Now They Are.

If a Chinese military manufacturer tried to buy an aerospace company today — even a maker of single-engine hobby and charter planes — the deal most likely wouldn’t be approved. But the Committee on Foreign Investment in the US did allow Aviation Industry Corp. of China to buy Cirrus Aircraft Ltd. through an affiliate company in 2011, with certain conditions. And then most people forgot about the deal, until very recently.

In June, Cirrus filed to go public on the Hong Kong stock exchange, reminding everyone that it’s currently owned by a subsidiary of a Chinese entity that was flagged for sanctions starting in 2020 because of its connections to that country’s military industrial complex. Cirrus itself hasn’t been added to sanction lists, nor has it been accused of any wrongdoing. The concerns about Cirrus seem to have little to do with the specifics of the company itself — there’s no glaring national security threat lying in wait after more than a decade of Chinese ownership that didn’t already exist without this particular acquisition — and more to do with heightened political scrutiny over industrial businesses of all shapes, sizes and histories with connections to or operations in China. The shifting line creates headaches for already established relationships and raises bigger questions about the extent to which US businesses will be allowed to interact with China at all.