National security

Foreign investment and national security

Three senators yesterday released a bill reforming the Committee on Foreign Investment in the United States (CFIUS). It’s long. Beyond that, it offers improvements to the investment review process to better safeguard national security without discouraging foreign firms, harming investment, and costing jobs. There are two major hurdles to jump: CFIUS must be fully funded and there must be a narrow, practical sense of what is crucial for national security.

Disclaimer: I think about CFIUS chiefly through a China lens. Chinese investment in the US soared in 2016 to about $50 billion. While it is declining in 2017, there is still substantial interest. There is also a declared effort by the People’s Republic to win leadership in a range of technology-driven industries.

This effort certainly includes trying to buy up American and other advanced technology. The ensuing flood of attempted Chinese acquisitions has contributed to a backlog, where not all foreign investors are receiving information from CFIUS in a timely manner.