By Karen Freifeld and Andrea Shalal
(Reuters) – Two U.S. senators are pushing ahead with a legislative plan to track U.S. investment in China, as the White House scrambles to push through long-awaited action that would also limit investment in some highly targeted sectors.
The Outbound Investment Transparency Act, tabled Thursday night as an amendment to a defense bill, is the latest bipartisan legislation introduced by Democratic Sen. Bob Casey and Republican John Cornyn aimed at addressing the risks of US investments in foreign adversaries like China.
Unlike an unsuccessful version senators introduced in 2021, the latest measure requires notification of certain outbound investments, rather than reviewing or banning certain transactions, and targets fewer industry sectors.
“For national and economic security reasons, we need a better understanding of which critical technological capabilities in our country have been moved overseas and at what scale,” Casey said in a statement.
The Biden administration, meanwhile, is finalizing an executive order that would also restrict certain investments in sectors such as advanced semiconductors, quantum computing and artificial intelligence.
A senior administration official, who spoke on condition of anonymity, said the goal was to conclude legal and other reviews of the outgoing investment order by Labor Day.
“We are working very hard on it,” the official said. “The pace of meetings has certainly picked up.”
The White House had no comment.
US Treasury Secretary Janet Yellen said after a four-day trip to China on Sunday that she had spoken with her Chinese counterparts about the proposed order, and said any investment restrictions would be “very targeted and clearly directed, narrowly against a few areas where we have specific national security concerns.”
She said the ordinance would be enacted in a transparent manner, through a rule-making process that would allow for public participation.
Reuters reported in February that the proposed order was likely to follow restrictions on artificial intelligence chips, chipmaking tools and supercomputers, among other technologies, imposed on exports to China in October. The order, which has been postponed several times, was also to require notice for a wide range of transactions.
The legislation proposed by the senators was filed as an amendment to the annual National Defense Authorization Act.
As the U.S. House of Representatives passed its version of the NDAA on Friday, the chances of it becoming law were uncertain after Republicans added a series of culturally conservative amendments.
Debate in the Senate on his version of the must-have bill is set to begin on Tuesday. A final measure would then have to be crafted before it could be submitted to President Joe Biden for approval or a veto.
(Reporting by Karen Freifeld and Andrea Shalal; editing by Susan Heavey)