In the News: US Outbound Investment Tracker; Data Decoupling; and Foreign Pharmaceuticals in China

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U.S. Legislature Considers Tracking U.S. Investments in China

Two U.S. senators have introduced legislation that would require the tracking of U.S. investments in China, Reuters reported. The Outbound Investment Transparency Act, as the proposed legislation is called, was filed as an amendment to the National Defense Authorization Act (NDAA), the annual defense bill.

The proposed amendment comes as the White House continues to work on a long-awaited executive action that would also restrict investment in certain, highly targeted sectors.  Reuters reported in February that the order will ban certain investments in chips by foreign companies, and track "exports of American artificial intelligence (AI) chips, chipmaking tools, and supercomputers, among other technologies, to China in October."

The Outbound Investment Transparency Act is aimed at tackling the risks of U.S. investment going to foreign adversaries like China. One of the amendment sponsors, Sen. Bob Casey, said that "as a matter of national and economic security, we need greater insight into which of our nation's critical technological capabilities have been moved overseas and at what scale."

While the U.S. House of Representatives has passed its version of the defense spending authorization bill, it still must get through the Democrat-controlled Senate to become law and this will prove difficult, as Republicans added a series of culturally conservative amendments.

A final version of the annual defense bill, which is must-pass legislation, would have to be agreed to by both the House and the Senate before it could go to President Biden to approve or veto.

VOA reports that Section 214 of the proposed act, which "requires researchers to disclose personal information such as nationality, their background, and involvement with foreign governments or talent programs when participating in research for U.S. defense programs," is opposed by Democrat legislators and the Biden administration. While there is no specific mention of China, the sponsor of the Republican representative who sponsored Section 214 has called it the "Tough on China" amendment.