{"id":59164,"date":"2018-03-14T16:12:29","date_gmt":"2018-03-14T16:12:29","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/03\/14\/without-a-comprehensive-strategy-to-regulate-foreign-investment-china-wins\/"},"modified":"2026-08-08T00:14:00","modified_gmt":"2026-08-08T00:14:00","slug":"without-a-comprehensive-strategy-to-regulate-foreign-investment-china-wins","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/commentary\/2018\/03\/14\/without-a-comprehensive-strategy-to-regulate-foreign-investment-china-wins\/","title":{"rendered":"Without a comprehensive strategy to regulate foreign investment, China wins"},"content":{"rendered":"\n

Most Americans would agree that a competitor\u2019s control of an important military resource would create a threat to U.S. national security. Unfortunately, the primary watchdog for such situations, the Committee on Foreign Investment in the United States, or CFIUS, does not have adequate resources or legislative authorities to monitor or prevent many of the sophisticated efforts that China and other nations<\/a> have engaged in to control, influence, or eliminate American economic capabilities.<\/p>\n\n\n\n

Chinese President Xi Jinping and the Chinese Communist Party are explicit about their desire for complete control of China\u2019s economy, and foreign companies are regularly subject<\/a> to the party\u2019s often intrusive demands. When foreign companies seek to acquire a U.S. company, the CFIUS review process is voluntary or by the panel\u2019s request. As a result, transaction participants have been able to skirt CFIUS authority. In order to protect America\u2019s vital supply chains from foreign interference, regulations and laws governing CFIUS must be updated.<\/p>\n\n\n\n

As illustrated by the recent acquisition of the United States\u2019 only rare earth mine, foreign companies have found loopholes in the current CFIUS process. When MP Mine Operations LLC \u2015 a Chinese-affiliated consortium including rare earth miner Shenghe Resources Holding Co. \u2015 sought to acquire the only formerly operational U.S. rare earth mine, CFIUS, the very committee charged with evaluating deals of this nature, did not review the transaction, despite the fact that rare earth minerals are found in almost every major weapon system.<\/p>\n\n\n\n

Proposed legislation in Congress aims to broaden the powers of CFIUS; moreover, this legislation provides an opportunity to scrutinize the very foreign investments that threaten to leave America reliant on China for critical military technologies.<\/p>\n\n\n\n

Since it was established in 1975, CFIUS has not considered the long-term geopolitical implications that foreign investments in U.S. companies will have on the defense industrial base and on our military\u2019s ability to fight \u2014 and win \u2014 wars. Not only is the United States the world\u2019s largest recipient of foreign direct investment since 2006, but it is also the primary target of Chinese investment.<\/p>\n\n\n\t