US considers screening outbound investment amid China competition, leading experts to urge caution
- ‘We’re talking about regulating a very small portion of total investment’ in China, one tells the American Enterprise Institute
- The US Commerce and Treasury Departments have reported plans to review outbound investments, and House legislation has been introduced to create a screening process
With the White House planning to regulate US outbound investment into “countries of concern” amid a raging rivalry with China, experts urged the Biden administration on Thursday to approach the issue with “humility” and avoid hurting US interests.
“We’re talking about regulating a very small portion of total investment” in China, noted Scott Kennedy, a scholar on US-China relations, at an event hosted by the American Enterprise Institute, a think tank in Washington.
For at least two decades, he said, annual US investment in China has roughly been between US$5 billion and US$10 billion. And while US stakes have typically been about 3 per cent of total foreign investment into China, the figure stood at just 0.6 per cent last year.
Thus, Kennedy said, “we need to engage this topic with a lot of humility, because our ability, the leverage that we have, is a small portion of overall commercial activity”.
“And we want to get this right, so when we’re done with this, we want to make sure we did more good than harm,” he said.
