The Biden administration has continued to strengthen foreign investment screening processes, particularly targeting China. In 2023, President Biden’s administration announced an administrative order to limit China’s investment in advanced technology. Concurrently, former President Donald Trump renewed calls for even tougher measures, proposing a more stringent investment restriction policy. Major foreign media, including the Washington Times and Reuters, reported on this development.

The Biden administration’s order specifically aims to curb China’s investments in critical sectors such as technology, core infrastructure, medical, agriculture, energy, and raw materials.

Presigned by former President Trump, the National Security Presidential Memorandum (NSPM) emphasizes that investments are not always aligned with national interests. The memorandum stated, “Investing in any price does not always meet the national interests, and some hostile countries, including the People’s Republic of China, have invested in US companies and assets to secure lever in advanced technology, intellectual property and strategic industries. ‘We are systematically instructing and promoting.’

China is pursuing this strategy in a variety of visible or concealed ways, and is often promoted through investment funds in partner companies or third countries.

— Projecting from White House Office

The proposed measures include four major components. First, the Committee on Foreign Investment in the United States (CFIUS) is ordered to limit China’s investment in strategic sectors. Second, the administration proposes to promote a ‘Fast Track’ procedure for investments from ally and partner countries. Notably, environmental reviews for investments over $1 billion will be expedited. Third, CFIUS’s authority will be strengthened to include ‘undeveloped investments’ and real estate transactions near sensitive facilities. Finally, the administration aims to enhance audits for foreign companies listed on U.S. exchanges and restrict pension plan contributions from hostile foreign entities.

As part of this effort, “Chinese hackers have recently targeted U.S. institutions, including invading the CFIUS office. This clearly shows that China, by using weapons and cyber war, has been directly threatening U.S. security.” a White House official said.

We are directly threatening US security with weapons and cyber wars.

— White House official.

This measure builds on the Biden administration’s 2022 administrative order that strengthened CFIUS’s foreign investment screening. Notable cases, such as the acquisition attempt by Snapdragon Chemistry, a Chinese pharmaceutical company, into ASYMCHEM, a U.S. technology firm, saw a refusal from CFIUS.

According to CFIUS recent votings, China’s investment in the U.S. has decreased significantly, falling from $46 billion in 2016 to less than $5 billion in 2022. Despite these decreases, the Trump administration still holds concerns regarding efforts by China to invest in sensitive areas such as semiconductor, artificial intelligence (AI), quantum computing, biotechnology and aerospace.

Protection of farmland is another critical facet of this measure. The U.S. Department of Agriculture reports that foreign subsidiaries and individuals currently own approximately 43 million acres of U.S. farmland, accounting for about 2% of the total U.S. land. Of this, China owns over 350,000 acres across 27 states, highlighting the need for heightened vigilance and protection of strategic assets.

China owns more than 350 000 acres of farmland.

— USDA.

President Trump has also recently proposed a 10% tariff on Chinese imports. He emphasized, “We will adopt new rules to prevent American companies from investing in China and to prevent China from buying American companies. We will prevent Chinese companies from stealing our intellectual property and the knowledge of our workers and returning to Communist China.

To address concerns raised by Chinese stockholders, the Chinese Commerce Department stated, “The United States has stopped the economic problem ‘politics’ and ‘inorganize.’

The increased scrutiny on foreign investments, especially from China, reflects a broader trend in U.S. policy aimed at protecting national security and intellectual property. With ongoing tensions and the evolving geopolitical landscape, these measures are likely to shape future investment policies and strategic alliances.