By Fineline Cube US senators are preparing a bipartisan bill that would require US investors targeting Chinese high-tech companies, including those in the pharmaceutical sector, to seek government approval in the future. The draft proposals are part of an economic competitiveness bill aimed at countering China’s rise.
Proposed Mechanism
The proposals would establish a new federal oversight panel with the authority to review and deny US investments into Chinese firms or companies linked to other “adversarial nations” over national security concerns. US investors would need to disclose new investments in strategic sectors such as semiconductors, batteries, and pharmaceuticals. This includes funding for new facilities like factories, joint ventures involving technology transfers to China, and capital investments in Chinese startups and tech firms. Ordinary business transactions would not be affected.
Background and Context
The proposed mechanism mirrors the Committee on Foreign Investment in the United States (CFIUS), established in 2018 to review Chinese investments in strategic US industries, including biopharma. Despite being a bipartisan bill—drafted by Democrat Senator Bob Casey (Pennsylvania) and Republican John Cornyn (Texas)—there is expected to be significant resistance to the proposals. Critics argue that the measures could limit free trade and reduce the competitiveness of US companies, particularly those seeking to enter the Chinese market.
Next Steps
Supporters of the bill are seeking congressional feedback on the proposals this week, with the goal of holding a first vote before July 4.-Fineline Info & Tech