'Good Chance' US Issues Outbound Investment Rules, Yellen Says
The Biden administration’s potential outbound investment screening program could feature a combination of notification requirements and, in some cases, outright prohibitions on American investments in China, Treasury Secretary Janet Yellen said this week. She also offered the administration’s strongest comments to date in support of a new investment screening regime, saying there’s a “good chance” the U.S. issues the rules.
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“We want to make sure if we do this, that we get it right,” Yellen said during a July 17 interview with Bloomberg TV. “If we do go ahead, and there is a good chance that we will,” she said, the administration will issue an executive order alongside a notice of proposed rulemaking to give industry and others a “chance to comment on these proposed controls.” The administration, she said, wants to “receive a wide range of public input before finalizing anything that we do.”
She said the prohibitions would apply only to a narrowly targeted set of investments in specific critical technology sectors, stressing that most investments would still be allowed. “These would not be broad controls that would affect U.S. investment broadly in China or, in my opinion, have a fundamental impact on affecting the investment climate for China,” Yellen said. “These would be national-security focused.”
Yellen specifically mentioned semiconductors, quantum computing and artificial intelligence as sectors that would face new outbound investment hurdles, echoing comments recently made by Paul Rosen, the head of the Committee on Foreign Investment in the U.S. (see 2305310075). The restrictions would “serve as a complement to the export controls that we have in place to make sure that we've covered all the channels by which technologies can be transferred to China that we think pose national security concerns,” said Yellen, who said earlier this month the administration hadn’t yet decided whether to issue new investment restrictions (see 2307100036).
She added that she “explained to my Chinese counterparts that if we go forward with these, they would indeed be narrowly targeted.” Yellen met with Chinese officials in Beijing earlier in July (see [Ref 2307070031]).