Friday, May 17, 2024

Kennedy introduces bill to increase scrutiny over Chinese investments on American soil

by BIZ Magazine

WASHINGTON – Sen. John Kennedy (R-La.) today introduced the Exposing China’s Belt and Road Investment in America Act of 2023 to review investments that businesses controlled by the Chinese Communist Party make on U.S. soil. China routinely makes such “greenfield” investments while buying land, building factories and taking advantage of state and local tax breaks in America to expand China’s influence. Sen. Kevin Cramer (R-N.D.) is the bill’s lead co-sponsor.

“The Chinese Communist Party is both aggressive and manipulative. Beijing uses greenfield investments to gain leverage over America’s economy and job market. We can’t be blind to the ways China is gaming our system to take American assets, real estate and innovation away from U.S. businesses. The Exposing China’s Belt and Road Investment in America Act is key to countering the threat China’s regime poses to our economy and national security,” said Kennedy. 

“Every land acquisition, investment, corporate merger, and building of agricultural facilities, influenced by foreign adversaries, is another step away from American ownership and sovereignty over our own food systems and supply chain. Placing greenfield investments under CFIUS review will enhance the review process of purchases from Chinese-operated enterprises. Let’s fend off bad, foreign investment once and for all,” said Cramer.

Greenfield projects involve a parent company in one country establishing a subsidiary in another country. These are the most common way that Chinese companies enter the American market. They are quickly becoming Beijing’s preferred method for expanding influence under its Belt and Road Initiative, the international infrastructure plan the regime is using to increase its global power. At the same time, the Chinese government keeps its domestic markets largely insulated from foreign influence. 

China’s state-operated enterprises use the greenfield model to siphon intellectual property, influence and other assets away from U.S. businesses.

The Exposing China’s Belt and Road Investment in America Act of 2023 would put Chinese greenfield initiatives under the review of the Committee on Foreign Investment in the United States (CFIUS). The legislation would also require greenfield investments to file a declaration with CFIUS if China’s government controls or has a substantial interest in the investment. CFIUS would review these investments for national security purposes. 

Specifically, the bill would require a CFIUS review for any investment that is made by a foreign person that both: 

  • involves the acquisition of real estate in the U.S. and the establishment of a U.S. business on such real estate, and
  • results in China’s direct or indirect control of that U.S. business. 

Text of the Exposing China’s Belt and Road Investment in America Act is available here.

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