Lawmakers are pushing to expand government scrutiny of foreign investment flowing into the United States amid concerns over what one congressman says is a “backdoor effort” by China to buy up military-related American tech firms.Â
[Guy Taylor | December 12, 2017 | Washington Times]
“China has targeted the acquisition of sensitive American technology and data,” Rep. Robert *Pittenger told The Washington Times. “This has to end.”
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The North Carolina Republican outlined his concerns ahead of a hearingThursday on a bill he introduced last month to broaden the power of the Committee on Foreign Investment in the United States (CFIUS) — the lone government entity tasked with examining national security threats posed by foreign purchases of U.S. companies.
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The Pittenger bill — as well as an identical one proposed in the Senate by Texas Republican John Cornyn — has growing Republican support and is also backed by several influential Democrats, including Sen. Dianne Feinstein of California.
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The House Financial Services Committee hearing will feature testimony from former defense officials and cyber technology experts, in what is expected to be the first of several hearings ahead of a push for passage early next year.
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Mr. Pittenger, now in his third term, may be the most passionate Capitol Hill voice on the issue, particularly with regard to China.
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“China is buying American companies at a breathtaking pace. While some are legitimate business investments, many others are part of a backdoor effort to compromise U.S. national security,” the congressman said in a statement last month. “For example, China recently attempted to purchase a U.S. missile defense supplier using a shell company to evade detection.”
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Pittenger staffers says Chinese investment in the United States increased more than 900 percent between 2010 and 2016, with portions of it tied to a strategic push by Beijing to weave Chinese-owned entities deeply into the U.S. economy in a way that facilitates stealing American technology.
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“China is weaponizing its investment in the U.S. to exploit national security vulnerabilities, including the back-door transfer of dual-use U.S. technology and related know-how, aiding China’s military modernization and weakening the U.S. defense industrial base,” Mr. Pittenger’s office said in a statement.
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Pittenger aides say the congressman began drafting the Foreign Investment Risk Review Modernization Act after becoming increasingly concerned about Chinese state-sponsored attempts to buy certain American financial institutions. The Securities and Exchange Commission is presently weighing a $20 million bid by a China-based investor to buy the privately held parent company of the Chicago Stock Exchange.
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It remains to be scene whether the proposed legislation would block such a deal.
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The Pittenger-Cornyn bill focuses mainly on expanding CFIUS’ jurisdiction over things like foreign investments in real estate transactions near military bases and other sensitive national security facilities. It also calls for a widening of CFIUS’ authority to block certain investments in emerging technologies seen as essential for maintaining a U.S. technological advantage over countries that pose threats.
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“In our global economy, foreign investment from adversarial nations has become a serious national security concern,” Mr. Pittenger said in an interview Tuesday. “Senator Cornyn and I have introduced bipartisan legislation to modernize CFIUS so that federal officials have the tools necessary to block so-called Chinese business investments that threaten national security.”
