US to tighten oversight of foreign investment amid trade war with China

The goal of the measure is to strengthen the inter-agency US Committee on Foreign Investment (CFIUS), which reviews mergers and stock purchases to ensure they do not harm national security.
The goal of the measure is to strengthen the inter-agency US Committee on Foreign Investment (CFIUS), which reviews mergers and stock purchases to ensure they do not harm national security. PHOTO: REUTERS

WASHINGTON (REUTERS) - US lawmakers have reached an agreement that puts a measure to strengthen oversight of foreign investment from countries such as China into a must-pass defence policy Bill, Representative Robert Pittenger's office said on Thursday (July 19).

The goal of the measure is to strengthen the inter-agency US Committee on Foreign Investment (CFIUS), which reviews mergers and stock purchases to ensure they do not harm national security.

It also addresses concerns that Chinese companies, many with government links, have tried to buy US high end semiconductor makers and other tech firms. The US Defence Department fears losing America's technological edge in warfare.

Pittenger, a Republican congressman from North Carolina and chief sponsor of the measure in the House, said in a statement that the "legislation will safeguard America's proprietary dual-use technologies by drastically improving our foreign investment review process."

He gave no details on what changes might have been made to the measure.

The Senate and US House of Representatives had passed similar bills to strengthen the inter-agency panel, which is led by the US Treasury. The Senate put its version in the must-pass National Defence Authorisation Act, or NDAA, which authorises military spending.

Lawmakers hope to have the NDAA on President Donald Trump's desk by the end of the month.

The CFIUS measures are among a series of proposals being considered by the White House and Congress to address what it sees as China's unfair trade and market access practices.

Others include tariffs on goods ranging from aluminum to automobiles, and efforts to prevent the growth in the United States of Chinese telecommunications companies Huawei Technologies Co and ZTE Corp.