Mnuchin: US investment curbs not specific to China

Report claims White House to use emergency law to raise scrutiny, citing security threat

WASHINGTON • United States Treasury Secretary Steven Mnuchin has said forthcoming investment restrictions will not be specific to China, after media reports claim he is planning to heighten scrutiny of Chinese investments in sensitive American industries.

Citing eight people familiar with the Treasury plans, Bloomberg reported yesterday that the White House would use an emergency law to declare China's investments in American companies - involved in technologies such as new-energy vehicles, robotics and aerospace - a threat to economic and national security.

The Wall Street Journal alleged that the Treasury is working on rules to block firms with at least 25 per cent Chinese ownership from buying companies with "industrially significant technology".

Bloomberg said the move will put Washington's trade war with Beijing on a potentially irreversible course.

In a Twitter message yesterday, Mr Mnuchin said stories on investment restrictions from Bloomberg and the Wall Street Journal "are false, fake news".

"The leaker either doesn't exist or know the subject very well.

"Statement will be out not specific to China, but to all countries that are trying to steal our technology," Mr Mnuchin wrote.

The Treasury is expected to release a report on Friday.

Bloomberg said the report will suggest administering the emergency law through an inter-agency government panel called the Committee on Foreign Investment in the US, or CFIUS, citing its sources.

One concept under review would be to create a two-track CFIUS process to review investments, with one specifically for China, two of the people said.

China's Ministry of Commerce did not immediately respond to Bloomberg's enquiry about the report of planned investment curbs from the US.

At a regular briefing in Beijing yesterday, Foreign Ministry spokesman Geng Shuang said China wants the US to treat commercial activities objectively, and pointed out that Chinese investments have created a lot of jobs and tax income in the US.

The Treasury's move is reportedly part of the Trump administration's actions taken under Section 301 to respond to China's alleged theft of US intellectual property, and follows rounds of tit-for-tat tariff threats between the world's two largest economies.

Meanwhile, Beijing has begun downplaying Made in China 2025, the state-backed industrial policy that has provoked alarm in the West and is core to Washington's complaints about China's technological ambitions, according to diplomatic and Chinese state media sources.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 26, 2018, with the headline 'Mnuchin: US investment curbs not specific to China'. Print Edition | Subscribe