Asia Insights Weekly: Changing the Review of Foreign Investments

If you are having trouble viewing this email, view it online.

February 5, 2013            Your Weekly Update from The Heritage Foundation's Asian Studies Center A Better Committee on Foreign Investment in the United States By Derek Scissors, Ph.D. According to The Heritage Foundation’s China Global Investment Tracker, Chinese non-bond investment in the U.S. set a record in 2012. China has $3.3 trillion in foreign reserves and, like other fast-growing economies, wants to invest more here. Foreign investment and other commerce benefits America, but there are understandable concerns about the loss of advanced technology and possible threats to national defense. Evaluating these concerns is the job for the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an inter-agency group chaired by the Secretary of the Treasury and including the Secretaries of Defense, State, and Commerce; the Attorney General; the United State Trade Representative; and others. The U.S. does not have to choose between security and the many benefits brought by foreign business. CFIUS can screen transactions so that nearly all proceed immediately while a remaining very few are investigated and possibly blocked. CFIUS is responsible for all countries investing in the U.S., not just China. The surge in Chinese investment, however, indicates the prudence of enhancing the American review process. The initial presumption should remain that all transactions go forward. Beyond that, the CFIUS mandate should be extended while transparency and responsiveness are improved in several ways. What can the U.S. do better? >>

Clarification Needed: Asia on the Horizon As senators prepare questions for Chuck Hagel, they would do well to clarify his views on Asia, a crucial region for U.S. interests. As demonstrated in the Japanese earthquake, any disruption to the region can have global consequences, rippling through international supply chains.Moreover, it is the source of much of the high technology that undergirds American economic activity. How will Hagel's views affect the U.S.? >> Chinese Challenges to U.S. Space Dominance When Congress holds hearings on Chuck Hagel’s nomination for Secretary of Defense, they should pay close attention to his position on U.S. space capabilities. As Secretary of Defense, he would have responsibility for ensuring that the U.S. maintains the ability to access space as necessary, a position that is increasingly threatened by the People’s Republic of China (PRC). Is the U.S. space presence in peril? >>

About The Heritage Foundation Founded in 1973, The Heritage Foundation is a research and educational institute -- a think tank -- whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The Heritage Foundation  |  214 Massachusetts Ave NE, Washington, DC 20002  |  202.546.4400