The U.S. Senate has approved a bill that would require American companies to report their investments in advanced Chinese technology due to national security concerns. This legislation is a watered-down version of the Outbound Investment Transparency Act, which was introduced two years ago but faced significant pushback. Unlike the previous version, the current bill does not impose restrictions or require investment reviews. It still needs to go through further processes before becoming law.
The passage of this bill could potentially put pressure on President Joe Biden, who reportedly plans to issue an executive order targeting investments in certain Chinese technology companies. The executive order is expected to be more far-reaching than the legislation passed by the Senate.
The bipartisan measure, part of the larger National Defense Authorization Act, received overwhelming support in the Senate, with a vote of 91-6. This indicates growing concerns in the U.S. about China’s advancement in technology and the need to maintain technological supremacy.
The focus on semiconductors in the technology trade war between the U.S. and China is evident. In October, the U.S. implemented rules to cut off exports of key chips and semiconductor tools to China, urging other chipmaking nations to do the same. Japan recently joined the U.S., including semiconductor manufacturing equipment in its export control list. The Netherlands also announced new export restrictions on advanced semiconductor equipment.
U.S. Treasury Secretary Janet Yellen had assured Chinese officials that any restrictions on outbound investments would be transparent and narrowly targeted. However, it remains unclear whether she was referring to specific legislation or an upcoming executive order.
The passage of this bill highlights the U.S.’s concerns about the potential risks posed by investments in Chinese technology, particularly in areas like semiconductors and artificial intelligence. The aim is to prevent American capital, intellectual property, and innovation from falling into the wrong hands and being weaponized against the nation.
Overall, the bill’s approval showcases bipartisan agreement on the need to address national security vulnerabilities, confront threats from adversaries, and remain competitive on the global stage. It will be interesting to see how this legislation progresses and how President Biden’s anticipated executive order aligns with its objectives.
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