The Senate has given support to a bill that aims to increase transparency regarding US firms' investments in advanced Chinese technology on the grounds of national security concerns.
This bill represents a revised version of the initial Outbound Investment Transparency Act, which faced resistance due to its proposed investment restrictions, according to a report by CNBC.
91-6 Majority
The new legislation, which omits investment curbs, is now progressing through the legislative process, but it still requires further steps before becoming law. As policymakers work to clear a backlog of proposed legislation before the upcoming recess in August, the bill is among the measures on their agenda.
The context for this legislation comes amid expectations that President Joe Biden will release an executive order to restrict US investments in advanced Chinese tech. The potential executive order is anticipated to have broader implications than the legislative measures currently under consideration.
The bill passed with an overwhelming 91-6 majority, showcasing a rare display of bipartisan agreement in the Senate. The level of support underscores the growing concerns in the US about China's advancements in advanced technology, as the global race for technological dominance intensifies.
Senators Bob Casey (D-Pa.) and John Cornyn (R-Texas) are co-sponsoring the legislation as an amendment to the broader National Defense Authorization Act.
The Senate is scheduled to vote on the defense act later this week, and both the Senate and the House will engage in discussions regarding their respective versions of the act in the early fall, according to CNBC's report.
US-China Tech War
Senator Cornyn stressed the importance of increasing visibility into American investments in technologies like semiconductors or AI in countries such as China and Russia.
He underscored the potential risks associated with capital, intellectual property, and innovation falling into the wrong hands and being weaponized against the United States.
The primary objective of the bill is to strengthen the country's capacity to gather information, enabling a thorough evaluation of national security vulnerabilities, effective response to threats from adversaries, and the maintenance of global competitiveness.
The global technological war continues to escalate, with the US taking significant measures to curb exports of key chips and semiconductor tools to China. Other nations, including Japan and the Netherlands, have joined the US in imposing export restrictions on advanced semiconductor equipment.
US Treasury Secretary Janet Yellen previously provided assurance to Chinese officials that any limitations on US outbound investments would be conducted with transparency and precision.
Nevertheless, recent events highlight the intricate and evolving dynamics of technological and economic tensions existing between the two nations. As the situation continues to evolve, policymakers are faced with the delicate task of striking a balance between national security considerations and economic interests.
Related Article: China's Semiconductor Industry Sees Huge Demand in Chip Industry for 2024: Here's What The Nation is Doing to Solve it
