US restrictions on outbound investments to China hang in balance amid spending bill talks

US restrictions on outbound investments to China hang in balance amid spending bill talks

Legislation restricting US outbound investments to China hangs in the balance as lawmakers seek to negotiate a temporary spending bill that would avert a government shutdown.

A draft of the spending bill, which would keep the US government funded until mid-March, had included provisions that would prohibit or require notification of overseas transactions involving China in sectors like semiconductors, quantum technology and artificial intelligence.

The bill also had several other provisions aimed at concerns about China, including expanded review of Chinese real estate purchases near national security-sensitive sites and a requirement to study national security risks posed by Chinese-made consumer modems and routers.

That version, released on Tuesday night and initially expected to be voted on this week before the shutdown deadline on Friday, was scrapped by Republicans after opposition from president-elect Donald Trump on Wednesday.

House Speaker Mike Johnson is expected to bring a revised version of the bill to a vote on the House floor on Thursday, according to Politico.

US president-elect Donald Trump speaks at Mar-a-Lago in Palm Beach, Florida, on Monday. Photo: Reuters
The inclusion of restrictions on outbound investment culminated a year-long battle between pro-business lawmakers, who argue that excessive regulation could disadvantage US industry against foreign competitors, and national security-focused lawmakers eager to cut the flow of American capital and expertise to China’s military.

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