President Joe Biden is expected to issue his long-awaited executive order to screen outbound investments in sensitive technologies to China early next week, according to people familiar with the matter.
A White House spokesman declined to comment.
The goal of the order is to prevent U.S. capital and expertise from accelerating the development of technologies that would support China’s military modernization and threaten U.S. national security.
The order is expected to target U.S. private equity, venture capital and joint venture investments in China in semiconductors, quantum computing and artificial intelligence. Most investments captured by the order will require that the government be notified about them. Some transactions will be prohibited, sources have said.
“It fills a gap in our current regime,” said Cordell Hull, a former U.S. Commerce Department official. “We have prohibitions on exporting the technology. We have restrictions on in-bound investment. This will help to plug that gap on funding and know-how and give the government visibility into these capital flows.”
The regulations are not expected to take effect right away and the administration will solicit comment on its proposals, according to sources. It has already conducted meetings with stakeholders and has been consulting with allies. It also came up during U.S Treasury Secretary Janet Yellen’s recent trip to China.
Yellen last month described the potential restrictions as “highly targeted, and clearly directed, narrowly, at a few sectors where we have specific national security concerns.”
Laura Black, a former policy director for the Committee on Foreign Investment in the United States (CFIUS), which reviews certain transactions in the U.S., said the order was not expected to establish a “reverse CFIUS,” because it would not involve a case-by-case review where a committee would clear, mitigate or block a transaction. However, it is expected to prohibit certain investments, she said.
Two sources said briefings were expected on Monday, with the announcement Tuesday. But the timing has slipped many times before and could again.
Sources have told Reuters the investments that will be restricted are expected to track export control rules for China issued by the U.S. Department of Commerce in October.
Emily Kilcrease, a former U.S. official who has worked on China investment policy, said the U.S. also has been trying to define what counts as artificial intelligence, and aiming to also control offshore investments by U.S. people and companies.
She described the order as a major step in setting up a U.S. system of oversight to screen transactions to countries of concern and said that it was expected to expand in time.
She also said the U.S. should be prepared for retaliation by China. “We should anticipate that,” she said.
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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