Senate Passes Bill Requiring U.S. Firms to Report Investments in Chinese Tech
The U.S. Senate passed a bill on Tuesday that would require American firms to notify the Treasury Department when investing in advanced Chinese technology. The legislation, backed by an overwhelming majority, aims to address national security concerns associated with such investments. Although this bill is a toned-down version of the previously proposed Outbound Investment Transparency Act, which faced pushback, it still highlights the growing worries in the U.S. regarding China’s advancement in technology.
Unlike the original bill, the latest legislation does not include investment curbs or review requirements. However, it still needs to go through a process before it becomes law. This bill is one of several measures being rushed through by policymakers ahead of a month-long recess in August.
The passage of this bill could also impact President Joe Biden, who reportedly plans to issue an executive order banning investments in certain Chinese technology companies. According to a Senate aide, the executive order might have broader implications than the legislation passed by the Senate.
The bipartisan support for the bill, with a vote of 91-6, underscores the concerns among U.S. lawmakers about China’s advancements in advanced technology. The amendment to the National Defense Authorization Act, co-sponsored by Senators Bob Casey and John Cornyn, reflects the need to counter threats posed by adversaries and maintain competitiveness on the global stage.
Senator Cornyn emphasized the importance of increased visibility of investments in technologies like semiconductors and artificial intelligence in countries such as China and Russia. He believes that American capital, intellectual property, and innovation should not fall into the wrong hands and can potentially be weaponized against the U.S. Hence, the bill aims to gather information necessary to evaluate national security vulnerabilities and confront threats.
This development comes as the U.S. has been taking measures to curtail exports of crucial chips and semiconductor tools to China. Efforts have been made to urge major chipmaking nations to join the restrictions, with Japan being the latest addition. Japan announced that equipment used to manufacture semiconductors would be included in its export control list.
Notably, the Netherlands has also imposed new export restrictions on advanced semiconductor equipment, following in the footsteps of the U.S. and Japan. The rules, effective from September 1, mandate Dutch companies to apply for a license to export certain advanced semiconductor manufacturing equipment abroad.
In the midst of these escalating actions, U.S. Treasury Secretary Janet Yellen assured Chinese officials that any constraints on outbound investments from the U.S. would be transparent and narrowly targeted. However, it remains unclear whether she was referring to specific legislation or an executive order.
As the Senate prepares to vote on the defense act by the end of the week, the bill requiring U.S. firms to report investments in Chinese tech signals the U.S.’s ongoing efforts to protect its national security and preserve its competitive edge in an increasingly intense global battle for technological supremacy.
