U.S. outbound investment measure should not be overly broad, Biden official says

U.S. Commerce Secretary Raimondo addresses 2022 U.S.-Africa Leaders Summit in Washington
U.S. Secretary of Commerce Gina Raimondo addresses a U.S.-Africa Business forum at the 2022 U.S.-Africa Leaders Summit in Washington, U.S., December 14, 2022. REUTERS/Kevin Lamarque

WASHINGTON, March 2 (Reuters) - The Biden administration is considering a pilot program to address risks about outbound investment in China, Commerce Secretary Gina Raimondo said Thursday.

Raimondo said at a Bloomberg News forum a proposed measure restricting U.S. investors from taking stakes in certain Chinese firms should not be overly broad or hit 401(k) or retirement plans.

"There are a lot of U.S. pension funds invested in China and people's retirement money. You certainly don't want do anything that has an unintended consequence," Raimondo said. "You don't want to be overly broad.... Anything that's overly broad hurts American workers and the economy."

She added "we don't want to escalate unnecessarily." But she said the United States did not want U.S. venture capital "advancing semiconductor technology or artificial intelligence technology that China is going to use in their military."

Raimondo told Reuters after the forum that it was not clear when the administration will finalize any outbound investment restrictions. She thinks a pilot project is doable. "It makes sense to walk before you run because getting it wrong has consequences we want to avoid," Raimondo told Reuters.

Asked how long it will take to finalize any outbound rules, said: "Months not years for sure," she said.

China hawks in Washington blame American investors for transferring capital and valuable know-how to Chinese tech companies that could help advance Beijing's military capabilities.

Efforts to incorporate an outbound investment screening plan in legislation failed in Congress last year. However, a spending bill signed into law in December gave the U.S. Departments of Treasury and Commerce $10 million each to identify what it would take to implement a program to address national security threats from "outbound investment" in certain sectors.

Reporting by David Shepardson, Writing by Alexandra Alper; Editing by Chizu Nomiyama

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