Foreign investment security

Japan models a new look for national security

Japan’s newly defined restrictions on foreign investment, which were laid out last week and designate companies according to their importance to national security, seem wilfully concocted to confuse. Value Golf, a website for booking tee-off times, can be found in the same non-critical category as MUFG, the country’s largest bank. Golf-Do, a purveyor of second-hand clubs, sits a rung of sensitivity higher along with Fanuc, Japan’s most important manufacturer of industrial robots. Resort Trust, which operates a chain of luxury golf courses, ranks in the most protected group alongside Mitsubishi Heavy Industries, which builds military submarines. Quirkily triaged, perhaps. But also revealing of Japan’s attitude towards business and, possibly, a template for governments around the world as coronavirus violently redefines the scope and meaning of national security.

Foreign investment security

Pentagon reports boost in predatory foreign investment to US tech firms amid pandemic

Since the coronavirus pandemic began, the Defense Department has seen a small increase in predatory foreign investment in U.S. companies, such as small drone manufacturers, the Pentagon’s head of industrial policy said Wednesday.

“In general terms, there has been of an uptick, but it’s always been pretty high,” Jennifer Santos, deputy assistant secretary of defense for industrial policy, said Wednesday during the C4ISRNET Conference.

The Pentagon has become increasingly concerned about what it calls “adversarial capital” — a tactic whereby foreign nations, particularly China, make investments into U.S. technology startups that are part of the defense market. Once those countries make their investments, they could own or have access to unique American technologies, while the Pentagon loses its own access due to security considerations.

With the U.S. economy increasingly fragile due to COVID-19, the Defense Department must be vigilant about potential risk to American companies, Santos said. “We simply cannot afford during this period of economic uncertainty the loss of American know-how in critical tech.”

Foreign investment security

China has ‘zero chance’ of acquiring ‘vulnerable’ Europe tech firms as EU urges states to take stakes

Europe has long been an attractive place for Chinese firms looking to invest and acquire — and the recent bout of weakness in stocks, particularly in key tech firms, could further pique their interest. 

According to one analyst, some of Europe’s key tech firms are “vulnerable” given the market slump, but a top politician in the European Union has urged countries to take a stake in those companies to stop the Chinese takeovers.

The outbreak of the coronavirus in China, which has spread across the world, has led to a slump in share prices around the world. Some European tech firms that are part of industries seen as strategic, such as telecommunications or semiconductors, have taken a hit this year.

Foreign investment security

US national security concerns return to spotlight as new investment regulations set in


New US regulations went into effect on Thursday to expand the review of foreign investments for potential national security risks, effectively making restrictions that curb China’s access to technology and critical assets permanent.

The regulations extend the reach of the Committee on Foreign Investment in the United States (CFIUS), the inter-agency committee that since 1975 has reviewed the national security implications of foreign investments in US businesses.

Approved in a rare display of bipartisan support in Congress, the revised regulations will now let the US government review any deals involving foreign buyers that take even a “non-controlling” minority stake in a US company if the government finds that critical infrastructure, technology or sensitive personal data are involved. Previously, only deals that involved controlling stakes were reviewed.

Foreign investment security

The difference between national security and foreign competition

Other countries have directly invested $4.3 trillion here, making the U.S. the world's number one destination for investment. That’s good for our economy-and foreign investors. America’s open investment environment fosters competition and innovation that has built some of the world’s most successful products and companies.

Over the past few years, however, there has been growing concern that, in the process of making the most of America’s competitive market, some investment--particularly some Chinese investments—could also damage U.S. security.

It’s a well-founded concern. And that’s why we have the Committee on Foreign Investment in the U.S. (CFIUS). Congress created CFIUS years ago to review proposed foreign investments that trigger alarm and to make a fact-based determination of whether the deals would, in fact, jeopardize U.S. security.

Foreign investment security

Trump blocks Chinese purchase of U.S. company for national security reasons

President Donald Trump has blocked a Chinese venture capital fund from purchasing a U.S.-based semiconductor company because of national security concerns, the White HThe decision to issue the order came in response to a recommendation from the Committee on Foreign Investment in the United States, a Treasury-chaired panel that reviews foreign investment for national security risks.

White House officials said there were concerns about the potential transfer of intellectual property to CVCF, Beijing’s role in supporting the transaction and the importance of the semiconductor supply chain and Lattice products in particular by the U.S. government.ouse announced Wednesday.

The president’s order prohibits the acquisition of Lattice Semiconductor Corporation by China Venture Capital Fund Corporation Limited, known as CVCF, which manages industrial investments and venture capital.