The Chinese government has criticized US moves to expand the powers of its foreign investment watchdog.
The government is worried that the move means that THERE will be to use national security concerns unfairly in order to limit Chinese investment.
The new investment rules, and direct Chinese enterprises to invest in the technology sector.
It is, as the US and China prepare to slap tariffs on $34bn value of each others’ goods. What is the government proposing?
The american President Donald Trump said he supports legislation that would expand the powers of the Commission to the Foreign Investment in the United States (CFIUS).
The CFIUS is an inter-agency body which scrutinises the national security implications of the business that would result in foreign ownership of US companies.
You can make recommendations to the president, that can stop a deal going, however, even if in practice the negative of the CFIUS finding alone is sometimes enough to kill a deal.
“I have concluded that this legislation will provide additional tools to combat predatory investment practices that threaten our critical technological leadership, national security, and the future of economic prosperity,” Mr Trump said in a statement.
The legislation to expand the role of CFIUS, allowing you to stop a deal if you pose a threat to America’s technological edge.
Intellectual property is a key sticking point in trade tensions between the UNITED states and China, with the UNITED states, accusing China of stealing its technology. What is a trade war, and why should I worry?Why did China object?
China’s commerce ministry says that the objects of U.S. national security as an excuse to tighten the rules for Chinese companies.
“China will closely monitor the legislative process, and to evaluate its potential impact on Chinese companies,” said the spokesman of the ministry of commerce of China, Gao Feng.
China is a major investor in the US, and is losing more tight foreign investment rules.
The Chinese government economic plans have a strong focus on technological progress.
A way to acquire better technology is to invest in foreign companies that already have.
CFIUS has knocked back a string of proposed Chinese acquisitions of U.S. companies in the course of the past year.
The new legislation could be a further obstacle. A fall In investment
Chinese investment in the UNITED states has taken a big hit from the moment that Donald Trump became president.
Figures from Rhodium Group has found that the value of the deals fell by more than 90% in 2017.
The American Enterprise Institute (AEI), a conservative us think-tank, has noted that China has invested $24.2 bn in all sectors in the UNITED states last year, a huge drop from 2016, but still the second highest in the world.
Chinese companies have invested about $21.6 bn in US technology businesses since 2007, according to the IEA. Looming rates
The latest move comes in the midst of continuing trade tensions between the world’s two largest economies.
At the beginning of the week, reports suggested that THERE may be destined to investments in America by any company with more than 25% Chinese owned.
It seems that this plan has been abandoned in favour of a greater role for the CFIUS.
But even if the U.S. backed off on the investment rules, it seems destined to go forward with the rates.
The UNITED states imposes tariffs of 25% on the $34bn worth of Chinese goods starting from the 6th of July, with a further approximately $16 billion potentially to follow.
China has promised to match the rates of retaliation.