US House backs tighter foreign investment rule amid China worries

WASHINGTON — The US House of Representatives passed a bill on Tuesday to tighten foreign investment rules, spurred by bipartisan concerns about Chinese bids to acquire US technology.

The bill, passed 400- 2, is one of a series of measures being considered by the Trump administration and Congress to address national security concerns as well as what they see as China’s unfair trade and intellectual property practices. Other measures include tariffs on goods ranging from aluminum to automobiles, and efforts to prevent the expansion in the United States of Chinese telecommunications companies Huawei Technologies Co. Ltd. and ZTE Corp.

The House bill, and a Senate version, address worries that Chinese companies, many with links to the government, have tried to buy US semiconductor manufacturers and other technology firms. The US Defense Department also fears losing America’s technological edge in warfare.

Both the House and Senate bills involve the US Committee on Foreign Investment (CFIUS), which reviews foreign investment to ensure it does not harm national security. President Donald Trump supports the CFIUS legislation but has opposed a measure in the Senate version which would kill his administration’s deal to allow ZTE to resume business with US suppliers.

The House bill passed on Tuesday would allow CFIUS to expand its reviews to minority stakes in US firms. It also puts a focus on investments that may expose sensitive data about Americans to foreign governments or reveal information about critical infrastructure like telecommunications. “This landmark legislation will take enormous steps to improve our foreign investment review process to prevent further transfers of military applicable technologies to the Chinese government,” said Republican Representative Robert Pittenger, a driver behind the bill. —