The National Security Institute at George Mason University released a decision memo calling for the restriction of U.S. investments into certain Chinese technological industries to avert potential homeland security risks.
NSI warned that U.S. capital could be exploited by the Chinese Communist Party to dominate the market for semiconductors, decryption, quantum computing and even military technologies that could later be used against the U.S.
The Committee on Foreign Investment in the United States was given broader jurisdictional scope in 2018 to boost its effectiveness in reviewing investment into the U.S. by countries of concern such as China, Russia, North Korea and Iran.
However, the interagency committee does not have standard policy on assessing outbound investments into such nations, according to NSI’s report.
The institute advised the government and private sector to solidify plans to create a system for screening or vetting investments into Chinese businesses. It expressed support for a possible executive order that would limit such transactions, and suggested monetary penalties for entities that would violate the outbound investment EO.
NSI suggested the ban should encompass Chinese product areas that are included in the National Science and Technology Council’s Critical and Emerging Technologies List Update.