China investment restrictions gain momentum in talks with US lawmaker
The provision is part of sweeping legislation aimed at boosting US competitiveness with China and also granting $52 billion to chipmakers to expand operations in the US.
“The refined proposal released today has bipartisan and bicameral support and addresses industry concerns, including the scope of forward-looking activities, industries covered, and avoidance of duplicate authorities,” said U.S. Senators Bob Casey and John Cornyn, and Representatives Rosa DeLauro, Bill Pascrell. , Jr, Michael McCaul, Brian Fitzpatrick and Victoria Spartz, in a statement.
The initial “outbound investment” proposal had faced opposition over fears it would reduce business investment overseas, leading some chipmakers to oppose its inclusion in the chip bill drafted by Senate and House lawmakers.
Democratic Senator Mark Warner told Reuters on Monday that “time is running out” on the broader chip bill and said there was “a lot of talk” about pivoting to a bill that won’t happen. would focus only on subsidizing factories to manufacture chips, which could depress trade. provisions and other measures to help the United States compete with China in science, business and technology.
The outbound investment measure was originally proposed as a standalone bill by Cornyn and Casey, but was later added to the House version of a massive bill that includes subsidies to chipmakers and targets counter the rise of China.
The bill, which would capture less investment than the original version, drew opposition from critics who said it would hurt American competitiveness. The U.S.-China Business Council said of the new draft, “If such government controls were implemented on a unilateral basis, it would only undermine the flexibility and resilience of American businesses.”
The draft says a new investment committee would engage with allies to coordinate and share information.
The legislation aims to give the U.S. government greater visibility into U.S. investments. It will be mandatory to notify the government of investments that may fall under the new regulations, and the United States can use existing authorities to stop investments or mitigate risk. If no action is taken, the investment can go ahead.
The concept behind the measure is supported within the Biden administration. US President Joe Biden’s national security adviser, Jake Sullivan, said in July that the government was working on new investment screening and considering overseas investments as it sought to better position the United States to competition in the field of technology.
A study by Rhodium indicated that 43% of U.S. foreign direct investment transactions in China over the past two decades could have been screened into the broad categories defined by the original proposal.