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On February 21, the White House issued a presidential memorandum “’America First’ Investment Policy.”According to the White House’s Fact Sheet, the memorandum is a continuation of Trump’s numerous actions to protect U.S. innovation during his first term, including: launching a Article 301 investigation into China’s forced technology transfer, unfair licensing and intellectual property policies;Announces the Justice Department’s China plan to identify and prosecute trade secret theft, hacking and economic espionage; prioritize the development of artificial intelligence in the United States; and take action to prevent foreign malicious actors from obtaining U.S. information networks.
The memorandum first expressed its welcome to foreign investment, and then pointed out: “China is systematically guiding and promoting investment in the United States through various open or hidden ways to acquire cutting-edge technology, intellectual property rights and in strategic industries.Influence”.The memorandum uses the saying “Economic security is national security” that the current Finance Minister Bessent often said, forming the general outline of the entire policy and further elaborating on:
“China will not let American companies control its critical infrastructure, and the United States should not let China interfere in its core assets. Now, relevant Chinese investors are eyeing the important American high-tech, food supply, farmland, minerals, ports, etc.Resources, these are the “lifeline” of the United States. What’s more dangerous is that China is using American money to upgrade its military, intelligence and cyber warfare capabilities, which poses a threat to the US mainland and global U.S. military. They use “military-civilian integration”Policy allows Chinese companies and research institutions to serve the military and expand their military influence. Chinese companies also obtain a large amount of funds from the US market by listing on the US stock market, lobbying fund companies, and attracting investment, indirectly supporting China’s military development.In other words, American money is helping the Chinese military become stronger.”
On this basis, the document proposes 12 specific policy measures, which can be basically summarized into three sentences: 1. Allies and partners can invest to drive the development of the United States, and the United States welcomes it; 2. The money of foreign rival countries such as China is not available.Welcome, you cannot touch the key technologies and assets of the United States; 3. Protect the money of American investors and cannot allow it to support China’s military development.
1. Welcome investment from allies and partner countries
(1) The purpose of the US investment policy is to enable high-tech such as AI to develop locally. Allies and partners are welcome to invest, but it must be in line with the interests of the United States and benefit the American people.
(2) Allies’ investment will have a “fast channel” to make it easier for them to enter the US high-tech industry, but the premise is that they cannot cooperate with their competitor countries.
(The Trump administration wants to use the Commission on Foreign Investment (CFIUS) as a more direct foreign policy tool, explicitly linking CFIUS review and bilateral relations with countries. Investments from countries with good relations with the United States will be less scrutinized, and fromInvestments in countries with poor relations with the United States will be subject to stricter scrutiny. This should also accelerate the U.S. strategy to build a multilateral alliance for investment review in China)
(3) No longer use troublesome and time-consuming “mitigation agreements” to deal with investments from rival countries.In the future, such agreements will only include specific requirements that the enterprise can complete within a certain period of time, rather than long-term and expensive regulations.At the same time, the government will focus more on supporting investments in allies and partners.
(This means that in the future, China’s investment in the United States will no longer be able to sign a “national security agreement” and implement mitigation measures, which is equivalent to a “presumptive rejection” in Chinese investment).
(4) Welcome “passive investment” (including non-controlling shares and will not obtain voting rights, board seats or other corporate governance powers, and cannot allow investors to obtain any management influence, important decision-making power or technology, technical information, products ornon-public access to the service).
(5) Accelerate environmental review of any investments in the United States that exceed $1 billion.
2. Strictly examine foreign opponents (China (including Hong Kong and Macao), Cuba, Iran, North Korea, Russia, Venezuela’s Maduro government) investments cannot touch key technologies and assets of the United States
(1) Foreign investment in sensitive areas such as core technologies, critical infrastructure, and personal data will be strictly reviewed to ensure that the lifeline of the United States is not controlled by foreign opponents.
(2) All necessary legal tools, including the Commission on Foreign Investment in the United States (CFIUS), will be used to restrict investments in the United States by individuals or entities associated with China.Technology, critical infrastructure, healthcare, agriculture, energy, raw materials or other strategic industries.The U.S. government will protectReal estate near farmland and sensitive facilities in the United States,It will also seek (including consultation with Congress) to strengthen CFIUS’s regulation of “green space investment” to limit foreign opponents’ to the United StatesTalent and business in sensitive technologies (especially artificial intelligence)visit, andExpand the scope of “emerging and basic” technologies that CFIUS can manage.
(Trump’s first term has been greatly strengthenedCFIUSNational security review of Chinese companies’ investment in the United States.August 2018,The Foreign Investment Risk Review Modernization Act (FIRRMA)Officially effective, extending CFIUS reviews from traditionalMerger and Acquisition TransactionsExtended toNon-controlled minority equity investmentsand coversSensitive technologies, critical infrastructureorClose to sensitive locationsreal estate transactions.The United States has taken investment in ChinaMore stringent and more cautiousThe attitude of a large number of Chinese-funded enterprises were forced to withdraw or cancel transactions before submitting them to review, and the number of unapproved cases increased significantly., which has exacerbated the difficulty of Chinese companies investing in the United States.It now appears that the boundaries between national security and economic security will be further blurred in Trump’s second term, and CFIUS will continue to be a weapon to serve the geopolitical agenda.It is agreed that Chinese companies are welcome to invest in the United States, and they may not necessarily keep their word).
(3) Protect the funds of US investors and let this money promote the development of the US economy: Strengthen financial supervision, ensure that foreign companies, especially Chinese companies, comply with the US listingForeign Company Accountability ActStrict financial audit standards;Examine foreign rival companies using variable interest entities and subsidiaries to list on U.S. exchanges, thereby limiting ownership rights and protections of U.S. investors and investigating allegations of fraud in these companies; Control pension investment,According to the requirements of the Employee Retirement Income Protection Act of 1974,Restore the strictest regulatory standards to ensure that Americans’ pensions do not flow to businesses in foreign rival countries.
(At the end of Trump’s termDecember 2020, the U.S. Congress passed and signed by Trump by the Foreign Corporate Accountability Act (HFCAA).The law stipulates that if foreign companies listed in the United States continue toThree yearsDon’t letUS Public Company Accounting Oversight Board (PCAOB)Check its audit report and it will beForced delisting.Now it is obvious that it plans to remanage this matter and strictly review the listing of Chinese companies in the United States. I wonder if the audit supervision cooperation agreement reached by China and the United States through hardships during the Biden administration will be overturned again.)
3. The US investment is not allowed to support Chinese military industry
(1) Prevent US funds from flowing to China’s military industry.Means may include the implementation of asset freezes or other economic sanctions under the International Emergency Economic Powers Act (IEEPA), such as the multiple presidential executive orders issued in the past few years (the executive order of the establishment of CMIC 13959 “for securities financing for the Chinese Communist military companies.Investment threats”; Executive Order 13974 “Amendment of Executive Order 13959”; Executive Order 14032 “Terms for securities investments that raise certain Chinese companies” and the establishment of reverse investment reviews “For certain United States in a certain countrySome countriesThe threat of security technology and product investment”), specifically targeting investments that help China’s military industry financing. Currently, the government is reviewing Executive Order 14105 in accordance with the Presidential Memorandum of January 20, 2025 (US Priority Trade Policy) to determine whether it is availableSufficient control measures to deal with national security threats.
(About Executive Orders 13959 and 14032, I’m in “Tencent, CATL and others are on the blacklist – A brief history of the US “military-related” sanctions list“There is a very clear explanation in the article. For Executive Order 14105, you can refer to “The United States issued the final rules for the review of investment in China: prohibiting US funds from supporting the design and development of certain artificial intelligence systems of Chinese enterprises”
On November 12, 2020, Trump issued Executive Order No. 13959 of “Responding to the Threat of Investing in Securities of “Military-Industrial Enterprises of the Communist Party of China”, prohibiting American entities from purchasing or selling securities publicly traded by CCMC companies.Biden issued Executive Order No. 14032 on June 3, 2021, “Respond to the Threats of Securities Investment that Provides Funding for Specific Chinese Companies”, amending Executive Order No. 13959, and imposing a securities investment ban on the original provisions.The list of “China Military Enterprises” (CCMC) has been changed to “Non-SDN Chinese Military Industrial Complex Companies, NS-CMIC”U.S. individuals and entities are prohibited from investing in securities in companies on the NS-CMIC list, including purchasing, selling or holding stocks or bonds of these companies.In the same month, the Office of Foreign Assets Control of the Ministry of Finance (OFAC) released the list of the first batch of 59 companies in accordance with Executive Order No. 14032.It can be expected that this government may put more Chinese companies on the CMIC list, and the linkage between CMC and CMIC may also be strengthened.)
(2) Based on the Trump administration’s measures in 2020 and 2021, consider foreign investment in the United StatesNew or stricter restrictions are imposed on investment in semiconductors, artificial intelligence, quantum technology, biotechnology, hypersonic, aerospace, advanced manufacturing, directional energy and other areas related to China’s national military-civilian integration strategy.Controlled areas will be reviewed and updated regularly, including by the Office of Science and Technology Policy.During the review process, the government will consider imposing restrictions on investment types, including private equity, venture capital, greenfield investment, corporate expansion and investment in listed securities, with funding sources including pensions, university endowments and other limited partnership investments.American universities should also stop supporting foreign opponents through investment decisions, just as they should stop opening university resources to terrorism supporters.
(From this point of view, the reverse investment review, which has been established by the Biden administration, needs to be fully expanded: First, expand the technical scope covered: no longer limited to advanced semiconductors, quantum computing and certain artificial intelligence systems, butIt is also included in biotechnology, hypersonics, aerospace, advanced manufacturing, directional energy and “other areas related to China’s national military-civilian integration strategy”. The second is to expand the types of investments covered, investment in listed securities and investments by Americans as limited partnerships,The federal regulations for the Biden-era reverse investment review were exempted, but the Trump administration has made it clear that it should be put into it. Such a tough stance on reverse investment review makes people feel that this administration will be in the way of review.Focusing more on bans than notifications, and the reverse investment review legislation that Congress is advancing may also gain potential as a result.)
(3) Check whether it shouldSuspend or terminate the 1984 U.S.-China Income Tax Agreement.The tax agreement, together with China’s accession to the WTO and the United States’ commitment to grant China unconditional most-favored-nation treatment, led to the deindustrialization of the United States and the modernization of China’s military technology.The government will strive to reverse both trends.American investors should invest in the future of the United States, not China.
The Secretary of Finance shall consult with the Secretary of State, Secretary of Defense, Secretary of Commerce, the United States Trade Representative and other appropriate executive departments and agencies (and CFIUS members) to take necessary actions, including formulating rules and regulations to support the President in accordance with the IEEPA, as amended 19502019 Article 721 of the National Defense Production Law and other laws granted all powers to achieve the purpose of this policy document.
Regarding the policy of accelerating the approval of the investment environment review of more than US$1 billion,The Director of the Environmental Protection Bureau shall consult with the heads of other appropriate agencies to implement the implementation.
Regarding strengthening financial supervision of Chinese companies going public in the United States, the Minister of Finance should contact the Securities and Exchange Commission and the Accounting Supervision Committee of Listed Companies in a timely manner.aboutStrictly investigate overseas companies’ evasion of supervision and “detour listing”,The Attorney General should coordinate with the FBI Director to provide written advice on the audit status of all foreign rival companies currently listed on domestic exchanges, corporate supervision and risks posed by suspected criminal or civil fraud.Regarding the prevention of pension investment in foreign rivals, the Minister of Labor should regulate investment in open market securities of foreign rival companies in accordance with the updated fiduciary liability standards promulgated by the Employee Retirement Income Security Act of 1974.
Recently, there seems to be more signals of “easing” between China and the United States, such as the potential agreement between China and the United States that is said to be more reliable in the New York era, and earlier Trump himself was more positive and positive about DeepSeek and Chinese companies investing in the United States.Statement.So to be honest, I felt a little surprised to see this “America First” investment policy that is quite tough on China.Looking at some important personnel appointments currently by the US Department of Commerce, almost without exception are hawks against China, and there is no way to see if there is any meaning of “ease”.We may not be overly optimistic about Trump and the US government, but we should “listen to what we say and see what we do.”
