An influential U.S. government group urge Congress will take more measures to review the risks faced by American investors in China and limit investment in China because it believes that the risks are increasing.
Wednesday, the U.S.-China Economic and Security Review Committee An annual report was released, pointing out the new foreign policy challenges brought by China and urging Congress to take seriously the potential dangers that U.S. investment in China may pose to U.S. interests.
The core of the report is to recommend that US regulators strengthen their scrutiny of funds flowing into China despite President Xi Jinping’s continued repression. For months, the Chinese leader has been reducing the authorities’ attention to some of China’s most well-known companies. He believes that this push is a way to reduce growing inequality, but also in the name of protecting cybersecurity or curbing foreign influence.
The recommendations it provides include recommendations that have already been put forward by some U.S. agencies. For example, it recommends that regulators prohibit investments from variable interest entities (VIEs) related to Chinese entities or take more measures to assess the risks posed by these entities.
In July, Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), urged U.S. companies to pay more attention to the risks of investing in these structures. New guidance was issued. VIE is a company controlled through contracts with other shell entities in foreign jurisdictions. Chinese companies hoping to raise funds in the US market usually choose them, but investors usually have no say in VIEs.
Other measures it recommends include doubling up the scrutiny of Chinese investment entering the United States.
This expands the jurisdiction of existing U.S. investment restrictions, which target Chinese entities included in the United States. Export control or Sanctions List. The committee recommended that Congress authorize a brand new entity to identify key technologies to establish export controls.
U.S. President Joe Biden meets with Chinese President Xi Jinping for a virtual summit
Photo: AFP/MANDEL NGAN
This report was held at President Joe Biden’s The first virtual summit With China’s Xi Jinping.according to White house, The two discussed “the importance of managing competition responsibly.” It added that Biden emphasized US concerns about human rights violations in Taiwan, Xinjiang, and Hong Kong, as well as the US’s perception of Beijing’s uncompetitive trade practices that are detrimental to US labor and industry.
During the presidency of Biden and his predecessor, Donald Trump, tensions between the United States and China gradually increased. However, trade relations remain strong and are close to 2018 levels, when the Trump administration began a trade war with China.
U.S. companies have Hesitate Trump imposed tariffs and was frustrated that Biden has not yet lifted the tariffs.Several influential trade groups have complain And they believe that the Biden administration lacks clarity on any Chinese strategy and may be unwilling to accept new trade restrictions on trade with China.
