- Congress pushed a ruling proposing screening investments in rival countries like China to protect U.S. technologies and rebuild critical supply chains, the Wall Street Journal reports.
- The action would require American companies and investors to disclose new outbound investments with a new interagency panel to review and block investments on national security grounds.
- The provisions would apply to greenfield investments, like the construction of new plants, deals such as joint ventures involving the transfer of knowledge or intellectual property, and capital contributions, including venture capital and private equity transactions.
- The report specified that Democratic and Republican supporters in the Senate and the House of Representatives agreed to narrow the investment screening to specific sectors and technologies deemed critical.
- Those sectors and technologies include semiconductors, large-capacity batteries, pharmaceuticals, rare-earth elements, biotechnology, artificial intelligence, quantum computing, hypersonics, financial technologies, and autonomous systems like robots and undersea drones.
- Companies can claim exemptions for deals deemed "ordinary business transactions," like a software licensing agreement.
- Legislators reserved concerns over a 2016 Advanced Micro Devices, Inc (NASDAQ:AMD) deal to help Chinese partners develop advanced computer-chip technology.
- For decades, the U.S. has regulated foreign investment in U.S. entities and exports of sensitive technologies abroad for national security.
- Recently, a top NYSE official eased concerns for Alibaba Group Holding Limited (NYSE:BABA) and other Chinese companies regarding U.S. delisting.
- The Chinese tech companies started pushing for overseas expansion following uncertainty in their domestic regulatory environment.
- Other significant Chinese tech companies included Baidu Inc (NASDAQ:BIDU), Tencent Holding Ltd (OTC: TCEHY), Bilibili Inc (NASDAQ:BILI), and NetEase, Inc (NASDAQ: NTES).
- Price Action: BABA shares traded higher by 3.70% at $102.17 in the premarket on the last check Tuesday.
- Photo via Pixabay
