Regulation of U.S. Outbound Investment to China (CRS Report for Congress)
| Release Date |
Revised Aug. 12, 2024 |
| Report Number |
IF12629 |
| Report Type |
In Focus |
| Authors |
Cathleen D. Cimino-Isaacs; Karen M. Sutter |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The U.S. government has generally supported an open
investment environment at home and abroad to promote
U.S. economic growth, sustain the U.S. position as a
premier destination for foreign direct investment, and
ensure U.S. competitiveness. The U.S. government’s
interagency Committee on Foreign Investment in the
United States (CFIUS) reviews a small subset of foreign
inbound investments, primarily mergers and acquisitions,
that could result in foreign control of a U.S. business and
raise potential national security concerns. Since 2016, some
Members of Congress have focused on the potential U.S.
economic and national security effects of certain U.S.
outbound investments to the People’s Republic of China
(PRC or China), including the transfer of U.S. technology
and know-how in sensitive or strategic areas.
The 118th Congress is considering legislation to strengthen
foreign investment review authorities and restrict some U.S.
investment in the PRC and other “countries of concern” that
involves dual-use and critical technology. In response to
congressional activity, in August 2023, President Biden
issued Executive Order (E.O.) 14105 to establish a targeted
outbound investment program. Some countries (e.g., PRC,
South Korea, Taiwan) have outbound investment regimes.
While the E.O.’s proposed scope of covered activity is
limited, it is considered a departure from traditional U.S.
economic policy. Opponents argue that existing tools like
sanctions and export controls can address risks. Proponents
argue that new measures are needed to preserve a marketbased climate and counter PRC policies that incentivize and
require the transfer of U.S. technology and capabilities to
PRC competitors to benefit the PRC government.
