Washington has recently taken a tougher tack to growing inbound investment from the People’s Republic of China (PRC) by strengthening the Committee on Foreign Investment in the United States (CFIUS), but its security partners in the PRC’s backyard have not all followed suit (US Congress, August 13, 2018).
In the United States, the primary concern is that the PRC is using foreign direct investment (FDI) as a Trojan horse: When PRC companies invest in critical sectors like energy, transportation, and communications in traditionally open economies, Beijing can gain access to critical technologies, data, and infrastructure it can use for military ends. Such investment can also set the ground for technology transfer—both licit and otherwise—and weaken longstanding alliances, put central governments at odds with their regional counterparts, and co-opt business interests as lobbyists for Beijing.
India, Japan, and Australia, America’s partners in the Quadrilateral Security Dialogue (the Quad), face the same national security threats as the United States, but not all have responded by strengthening scrutiny of inbound PRC investment. In addressing these issues, Japan, which has managed to allow some inbound investment without exposing itself to national security risks, can serve as a starting point for its Quad partners.
Read the full article in China Brief.
More from CNAS
US monitors Beijing interest in global microchip market
Martijn Rasser offers insights to Fox News on how semiconductor shortage intensifies US-China tensions. Watch the full conversation on Fox News....
By Martijn Rasser
Modi's Victory Is America’s Opportunity
History’s largest election has swept Narendra Modi’s Bharatiya Janata Party back to power in India. More than six-hundred-million Indian voters cast ballots that decisively ga...
By Richard Fontaine
Two Ways for the United States to Deepen Diplomatic Engagement with ASEAN
The time has come to demonstrate again that the United States seeks to engage partners in Southeast Asia at the highest levels of government. As the region’s economic and secu...
By Chris Estep
As the competition between the United States and China to shape the course of the 21st century intensifies, Southeast Asia has become a contested space....
By Patrick M. Cronin, Abigail Grace, Daniel Kliman & Kristine Lee