U.S. lawmakers want Biden order boosting oversight of outbound investment in China

[September 28, 2022]  By David Shepardson

WASHINGTON (Reuters) -A bipartisan group of U.S. lawmakers on Tuesday called on President Joe Biden to issue an executive order to boost oversight of investments by U.S. companies and individuals in China and other countries.

The lawmakers including House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer and Republican Senator John Cornyn urged Biden to issue an order to "safeguard our national security and supply chain resiliency on outbound investments to foreign adversaries."

Congress has been considering legislation that would give the U.S. government sweeping new powers to block billions in U.S. outbound investments into China. The proposal was removed from bipartisan legislation to subsidize U.S. semiconductor chips manufacturing and research in a bill approved in August.

The lawmakers, including Democrats Bill Pascrell, House Appropriations chair Rosa DeLauro, Senator Bob Casey and Republicans Brian Fitzpatrick and Victoria Spartz, said in a letter to Biden that as negotiations continue, "our national security cannot afford to wait."

They urged the president "to safeguard our national security and supply chain resiliency on outbound investments to foreign adversaries."

The White House did not comment.

Chinese foreign ministry spokesperson Wang Wenbin said on Wednesday that the U.S. lawmakers' call would be counter to the interests of the United States and other countries.

"The U.S. side has in recent years incessantly expanded the concept of national security, intensified unreasonable oversight of investments, creating difficulties and obstacles for foreign companies engaging in normal economic and investment cooperation," Wang said during a regular media briefing in Beijing.

White House national security official Peter Harrell said this month that the Biden administration has not made a final decision on a potential outbound investment mechanism regulating U.S. investments in China.

U.S. President Joe Biden delivers remarks at a Democratic National Committee event at the National Education Association headquarters in Washington, U.S., September 23, 2022. REUTERS/Evelyn Hockstein

Harrell stressed that any measure targeting such investments should be narrowly tailored to address gaps in existing U.S. authorities and specific national security risks.

"When we cede our manufacturing power and technological know-how to foreign adversaries, we are hurting our economy, our global competitiveness, American workers, industry and national security. Government action on this front is long overdue to address the scope and magnitude of these serious risks we face as a country," the lawmakers wrote.

In Washington, Liu Pengyu, a spokesperson for the Chinese embassy, said, "The allegation that China is hurting the interests of American workers is completely wrong."

The United States "should maintain the stability of the global industrial and supply chains rather than pick on China from time to time," the official added.

The Senate Banking Committee on Thursday will hold a hearing on outbound investment that will feature testimony from Cornyn, Casey and several former government officials among them Information Technology Industry Council Executive Vice President Robert Strayer.

The proposed legislation is intended to give the government greater visibility into U.S. investments. It would be mandatory to notify the government of investments that may fall under the new regulations, and the United States could use existing authorities to stop investments, or mitigate risk. If no action is taken, the investment can move forward.

(Reporting by David Shepardson; Additional reporting by Eduardo Baptista in Beijing; Editing by Chizu Nomiyama, Mark Porter and David Gregorio)

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