CFIUS 2.0: An Instrument of American Economic Statecraft Targeting China

Abstract

On 13 August 2018, the president of the United States signed a bill to strengthen the Committee on Foreign Investment in the United States (CFIUS), an interagency executive body responsible for screening foreign investments made in the United States for national security risks. The move is primarily aimed at preventing Chinese firms from exploiting the US open capital markets to acquire technology. While much commentary exists spelling out the changes made to CFIUS by way of the legislation, their focus is largely on the legal and business ramifications of the policy at the firm level. This analysis assesses what CFIUS strengthening portends for the tech ambitions, examines the Chinese state’s response to the move, and observes its relevance to US-China economic decoupling.