US restrictions on outbound investments to China scrapped from temporary spending bill

Earlier version had included provisions on overseas transactions involving China in sectors like chips, quantum technology and AI

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The US Capitol in Washington, where members of Congress must pass a temporary spending bill to avert a shutdown of the American government. Photo: EPA-EFE

Published: 5:12am, 20 Dec 2024Updated: 10:26am, 20 Dec 2024

Provisions restricting US outbound investments to China have been scrapped from a temporary spending bill negotiated on Thursday to avert a government shutdown, likely setting the stage for renewed debates on the topic next year in the new Congress.

An earlier version 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.

That version 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.

All China-related provisions were removed in the text released on Thursday, which spans just 116 pages and is significantly shorter than the 1,547-page bill unveiled on Tuesday night.

The earlier version was initially expected to be voted on this week before the shutdown deadline on Friday, but was discarded by Republicans after opposition from president-elect Donald Trump on Wednesday.

US president-elect Donald Trump speaks at Mar-a-Lago in Palm Beach, Florida, on Monday. Photo: Reuters

Trump had criticised the version for being “extraordinarily expensive” and said he would not support any package that does not suspend or abolish the federal borrowing limit.