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U.S. Investment Review Likely to Impact Firms Already in China

  • Lawmakers proposing outbound investment screening for security
  • Rhodium estimates 43% of FDI to China would have needed review

A leading proposal to screen future investment by U.S. companies in China to lower national security risks could significantly slow new transactions and also pressure American businesses to reassess existing operations, according to Rhodium Group.

Up to 43% of all the foreign direct investment transactions into China in the past two decades would likely have fallen under the screening of the proposed National Critical Capabilities Defense Act, according to a Rhodium Group estimate published Wednesday.