McHenry argued such restrictions would advance Beijing’s goals of limiting the influence of Western firms in Chinese markets.
In March, both Treasury and Commerce sent reports to Congress describing plans to establish a programme addressing outbound investments in “sensitive” technologies that could further the capabilities of US adversaries and threaten national security.
Without naming sectors, the reports stated the administration would focus on investments that “could result in the advancement of military and dual-use technologies by countries of concern”. They also said Treasury would lead in administering the programme, supported by Commerce and other federal agencies.
“We don’t have an effective tool to target the money and sophistication with know-how that goes into these sensitive and most critical technologies [in] countries of concern,” Rosen said on Wednesday, emphasising that “we are focused on being narrow and tailored”.
In April during testimony on the Biden administration’s 2024 budget before the House Appropriations Committee, Commerce Secretary Gina Raimondo highlighted a request for US$5 million dollars for her department to scope and implement a “meticulously calibrated” programme for outbound investment.
Rosen did not specify a timeline for an announcement about the programme. But he said the administration was working with external stakeholders, including US allies, to ensure the result “takes into account any potential unintended consequences”.
Group of 7 leaders in May said in a joint statement that “we recognise that appropriate measures designed to address risks from outbound investment could be important to complement existing tools of targeted controls on exports and inbound investments”.
It would also come on the heels of bipartisan legislation in Congress that appears to seek a broader mechanism restricting outbound investment.
