US House passes bill to tighten foreign investment rules amid China worries

WASHINGTON-Reuters

The U.S. House of Representatives passed a bill on June 26 aimed at tightening foreign investment rules, spurred by bipartisan concerns about Chinese bids to acquire U.S. technology.

The Republican-controlled House passed the bill by a vote of 400 to 2.

The bill is one of a series of measures being considered by the Trump administration and Congress to address what they see as China’s unfair trade and intellectual property practices.

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

The House bill, and a Senate version, specifically address worries that Chinese companies, many with links to the government, have tried to buy U.S. semiconductor manufacturers and other technology firms. The U.S. Defense Department also fears the loss of an American technological edge on a future battlefield.

China’s commerce ministry said on June 27 that it would assess the potential impact on Chinese companies of new investment restrictions expected to be announced by the United States.

The ministry gave no other details in a brief statement.

The U.S. Committee on Foreign Investment (CFIUS) currently reviews foreign investment involving a controlling interest in American companies. There are several measures involving CFIUS making their way through Congress, and it was not immediately clear which legislation would be passed by both the House and Senate in order to be sent to the White House for President Donald Trump to sign into law or veto.

The House bill passed on June 26 would allow CFIUS to expand its reviews to minority stakes in U.S. companies. It also puts a focus on investments that may expose sensitive data about Americans to foreign governments or reveal information about critical infrastructure, like the telecommunications network.