US’ Foreign Investment Rules Start In November Directing To China

US’ Foreign Investment Rules Start In November Directing To China

Recently, the Treasury Department stated that the federal government is set to tighten the rules from next month on foreign business in susceptible industries such as technology and telecommunications. The federal government will begin to impose a law aimed at restricting Chinese investment in major 27 sensitive sectors.

The CFIUS (Committee on Foreign Investment in the United States) inspects the stock purchases and mergers to make sure they do not affect the national security. The panel’s most of the high profile work concentrates on Chinese companies which have attempted to purchase the high-end U.S. semiconductor manufacturers and other technology companies. The 27 industry sectors include aluminum production, semiconductors, telecommunications, computer storage devices, aircraft manufacturing companies, engine and engine parts, guided missiles and other military equipment. The department said that investments in these divisions should be disclosed to the committee in case the foreign shareholder’s job needs access to non-public data or the investor should permit a board member to make other substantial decisions. CFIUS holds the right to agree on a contract within 30 Days or can open a full investigation, the department further added. Steven Mnuchin—a Treasury Secretary—stated in a statement that these temporary rules deal with particular risks to the U.S. critical technology at the same time notifying the development of final regulations.

Speaking of foreign investment in the U.S., recently Jack Ma—Alibaba’s Founder—stated that the U.S. will suffer more due to its ongoing trade spat with China. In this cold war between the U.S. and China, the U.S. seems to be leading as the dollar is flourishing, whereas, the renminbi is dropping down. The U.S. has most of China’s goods which they can impose tariffs while China has done with American goods. On the other hand, according to Jack Ma, it is the U.S. that will end up losing out. Addressing the South China Morning Post‘s Conference at Kuala Lumpur, he said that the U.S. would suffer more as there is no sense behind mass imposing of tariffs on Chinese goods and considering it as a solution to US’ trade imbalance.

Paul Walk

About Paul Walk

Explaining and presenting the heavy concepts and term of the Business world in a simple and well-versed manner is the forte of Paul. He writes everything related to the latest trends, news, mergers, acquisitions, and much more that is taking place in the world of business. In spare time, Paul writes his own blog to put forth his opinions and viewpoints about the several political affairs from all across the world.

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