Lawmaker Calls for More Coordination on Investment Reviews to Counter China

Rep. Rick Larsen, D-Wash., one of the shrinking number of members of Congress who advocate for engaging with China rather than punishing it, recently published a white paper of his views on how to manage competition with China, how to use both offensive and defensive measures to compete with China, how to improve U.S. governance and competitiveness, and how to identify areas of cooperation.

He said that in order to increase pressure on China to change its economic practices, there needs to be more "coordination between the Committee on Foreign Investment in the United States (CFIUS) and other nations’ foreign investment review bodies."

"Sharing lessons learned about deceptive business practices and threats to national security will help develop a more coherent global framework for attracting foreign investment while safeguarding jobs and advanced technology," he wrote.

He said there also needs to be strengthened and coordinated export controls with countries that are also global leaders in advanced technology.

Larsen suggested concerns about technology transfer through Chinese academic ties to U.S. universities are overblown (see 2211220032 and 2207210026).

"While the threat of academic espionage is real, it is manageable. Policymakers must be careful not to exaggerate the threat or jeopardize the free and open academic model that has made the United States the global leader in education and research. Many proposed countermeasures, like prohibiting Chinese students from studying in STEM fields or even more extreme restrictions, are xenophobic, un-American and would do far more harm than good," he wrote. “Instead, the United States should pursue a 'small yard, high fences' approach that protects the most sensitive research.”

He added that the U.S. should make it easier for foreign students to settle in the U.S. after their studies are over. "The fact that the world’s brightest students want to attend American universities to pursue an education is a massive strategic advantage in terms of intellectual capital, soft power and exposing young people to American society," he wrote. "The United States can employ a 'brain drain' strategy by attracting more Chinese students to use their talents and skills in the United States. More than 70 percent of international PhD graduates from U.S. universities want to remain in the United States after graduation." For China, he said, "that figure is over 80 percent."