US politicians find common ground: restrict foreign investments - Harry Broadman

Harry Broadman

The American political landscape might be more divided than ever before, political analyst Harry Broadman sees one field where Republicans and Democrats find common ground: restricting foreign investments, especially but not only those from China through the Committee on Foreign Investment in the US (CFIUS), he writes in Gulf News.

Harry Broadman:

Historically, the US has had one of the most open policies toward foreign direct investment (FDI) — the ownership or control by a foreign entity of 10 per cent or more of a domestic enterprise. Indeed, FDI has played an increasingly important role in propelling US economic growth.

In absolute terms, the US is the world’s largest recipient of flows of FDI, and it has been so ever since 2006 (except for the brief 2010-14 period, when comparable inflows to China were slightly larger). 

The shared concern of both the Trump White House and the Democratic House, however, is that an increasing number of these foreign investors are from nations where there is significant involvement in business decisions by governments whose agendas are perceived — indeed known — to go way beyond commercial objectives. 

China, while hardly alone in not having effective separation between government and business, including in its FDI pursuits in the US, epitomises the case.

The understandable response by the US — as well as by other advanced countries, for example, Germany — is to intensify its scrutiny of the national security risks such inbound transactions might pose domestically, particularly in sectors considered sensitive. The US inter-agency body with the authority to make these national security assessments, The Committee on Foreign Investment in the US (CFIUS) — pronounced “syfius” — was established in 1975 by Executive Order by President Gerald Ford.

More in Gulf News.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategy experts at the China Speakers Bureau? Do check out this list.