Biden Admin Further Scaling Back Outbound Investment EO, Report Says
The Biden administration is expected to further scale back its upcoming outbound investment screening executive order to focus on “increasing transparency” for certain outbound investments in China instead of potentially blocking investments in several sectors, Politico reported Feb. 28. The report said the EO may still block certain investments in China’s advanced semiconductor industry, but it will “likely not block money from flowing to other parts of China’s high-tech economy,” including the artificial intelligence, quantum computing and biotechnology industries.
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The order is “now expected to largely require U.S. firms to notify federal authorities when doing deals in industries like quantum computing and artificial intelligence, though some other investment prohibitions are being debated.” The White House could issue the order in late March or early April, the report said, but further delays are “possible.”
The White House didn’t comment. National Security Council spokesperson Saloni Sharma told Politico the “premise of this story is false, and its characterization of the planned requirements of an outbound investment program is inaccurate.” Sharma said the Biden administration “has from the beginning focused on formulating an approach that addresses national security risks stemming from outbound investments in a way that is implementable and effective -- and has a greater impact on the [Chinese government’s] efforts to acquire sensitive capabilities than it has on the competitiveness of American companies.”
Reports in January said the administration was leaning toward narrowing the upcoming EO but that it would still focus on screening outbound investments in China’s quantum computing, artificial intelligence and semiconductor industries (see 2301120035). At least one official said the administration is trying to find a way to screen outbound investments in a way that protects domestic commercial interests but limits collateral damage to businesses with interests outside the U.S. (see 2302140083).
Sen. Marco Rubio, R-Fla., criticized the administration for reportedly deciding to scale back the EO. “The Biden Administration talks tough, but it never misses an opportunity to pull a punch. The Chinese Communist Party is not looking to compete with America, but to overtake us by any means necessary,” Rubio said Feb. 28. “President Biden needs to wake up and do what is necessary to protect Americans, our industries, and our communities.”