The Biden administration is starting to pay lip service to setting rules for American businesses’ investing in the People’s Republic of China. It’s
preparing a new program that could prohibit US investment in certain sectors in China, a new step to guard US technology advantages during a growing competition between the world’s two largest economies.
And, of course, the effort will need new taxpayer money.
Treasury and Commerce departments said they expected to finalize their policy on the issue in the near future. Both agencies said they expected to seek additional resources for the investment program in the White House budget, which will be released next week.
Naturally, the administration isn’t prepared to specify which sectors would be included, or how these departments propose to enforce their rules. Just give them money.
Since the Federal government is in the business of regulating American business’ investing in enemy nations, I have my own proposal for a rule for investing in the PRC: No. No investments in the PRC, and those businesses with investments there have two years in which to wind down those investments and withdraw from the PRC.
That won’t cost nearly as much. Just require public companies to report their investments in their quarterly SEC filings, and private companies to report same in their Federal tax filings—which would easily fall within the requirement, with only the smallest adjustment, to report on accounts held in foreign nations. Require those particular reporting subjects to be available to the public via FOIA requests. These requirements would come close to paying for themselves in the early years by assessing fines equal to the size of the investments not reported or inaccurately reported.
I have an alternative rule proposal: for every dollar an American business wishes to invest in the PRC, it must invest three dollars in the Republic of China. If the RoC can’t absorb all of the investment, then the business cannot invest at all in the PRC. This alternative would carry the same reporting requirements and penalties as my first proposal.
A final alternative: spread those three dollars among any number, greater than one, of the nations rimming the South China Sea in addition to the RoC. Again, with the same reporting requirements and penalties.