
U.S. Seeks to Heighten Scrutiny of Foreign Investment in Tech, Infra, Data - hodgesrm
https://www.wsj.com/articles/u-s-seeks-to-heighten-scrutiny-of-foreign-investment-in-technology-infrastructure-data-11568750471?mod=rsswn
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jaypeg25
Odd that this is being posted now. The article is a month and a half old and
comments on the proposed regs were due nearly 2 weeks ago. I was actually
thinking it's weird that I haven't seen much talk about this here - it's a
huge issue, but has barely gotten mainstream discussion.

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remarkEon
I'd like to see this scrutiny extended to real estate investment as well -
commercial and residential. If CCP has strategies for investing in Tech to
make them behave in a way more favorable to their interests, it makes sense
that they would have a real estate strategy to capitalize on that as well.

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excalibur
U.S. ignores open barn door, proposes tighter regulation of cattle feed.

~~~
snagglegaggle
Which is the open door?

I can see a few reasons for taking this approach, the most mundane of which is
the federal government actually has clear authority to regulate investment and
existing regulatory frameworks to draw from.

Trying to regulate technology with ITAR or arms export laws is I think more
likely to receive backlash to the point of facing constitutional challenge.
The finance laws also probably risk this, but a lot less.

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president
It's about time that the US start standing up to China's unrestricted warfare
[1]. It's amazing that most Americans don't realize that China views the US as
an adversary and has been quietly waging a war against the West. Why there are
people who welcome the rise of Chinese/CCP hegemony when they are actively
looking to crush [2] "Western values" is beyond me.

[1]
[https://en.wikipedia.org/wiki/Unrestricted_Warfare](https://en.wikipedia.org/wiki/Unrestricted_Warfare)

[2]
[https://en.wikipedia.org/wiki/Document_Number_Nine](https://en.wikipedia.org/wiki/Document_Number_Nine)

~~~
oitudgiyters
What I don’t understand is how we got into this situation in the first place.

We know how powerful the US intelligence agencies are. The fact that the CIA
has been able to install leaders in previously hostile governments shows their
competence. Aside from Iran, most of their operations were successful. Even in
their missteps, they were able to limit its influence in the region.

So how did it come to this? Why does it feel like the CIA dropped the ball on
China?

~~~
hql2222
> Why does it feel like the CIA dropped the ball on China?

Because the CIA, literally, dropped the ball on China.
[https://www.nytimes.com/2017/05/20/world/asia/china-cia-
spie...](https://www.nytimes.com/2017/05/20/world/asia/china-cia-spies-
espionage.html)

~~~
xvector
How do you fall from being able to change the course of world history with
shadow governments, to failing to even install operatives in the country?

> Last year, an F.B.I. employee pleaded guilty to acting as a Chinese agent
> for years, passing sensitive technology information to Beijing in exchange
> for cash, lavish hotel rooms during foreign travel and prostitutes.

That's how.

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yonaguska
I wonder, given the current administration, if this is partly driven by the
allegations against the Clinton Foundation concerning the Skolkovo Institute.

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m0zg
Should also heighten scrutiny on export of advanced lithography, AI, material
science, etc, to countries which are known for industrial espionage.

~~~
jbay808
Seems like you'll want to petition the Dutch, Japanese, and Taiwanese
governments to take some kind of action, then.

~~~
m0zg
They should consider that too, yes. Taiwan especially. South Korea, too has
advanced lithography capabilities, so add it to the list. China doesn't have
domestic lithography beyond 28nm IIRC. Which, to be clear, is not a joke
either, but it's 1/16th the density of the state of the art.

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mbesto
This is a serious f'n problem, and I'm glad it's finally being recognized.

When I see PE groups in China outbidding their Western counterparts by absurd
multiples, it just reeks of ulterior motives.

EDIT: Spelling police got me.

~~~
tlb
High bids are not strong evidence of ulterior motives. They reflect the fact
that many US companies prefer not to take on foreign investors, so those
investors have to bid much higher to get the deal.

~~~
JumpCrisscross
> _They reflect the fact that many US companies prefer not to take on foreign
> investors_

There is no evidence for this being the cause of the price premium. There is
substantial evidence that capital flight predicts which countries overpay for
foreign assets. Russia and China are better explained by the capital flight
hypothesis.

~~~
nostrademons
Economically it'd be both. Capital flight increases the supply of loanable
funds available for foreign investments. Unwillingness to take on foreign
investors decreases the demand for this. High supply + low demand = a poor
price.

~~~
JumpCrisscross
> _Economically it 'd be both_

It _could_ be both. We only have evidence for the supply hypothesis ( _i.e._
capital flight). American companies requiring a higher price for foreign
investors sounds plausible. But it's a guess for which we have zero evidence,
particularly at a systemic level.

(Fixed demand and higher supply still lower prices.)

One test might be found in comparing pricing and flows for foreign investors
around investment vectors companies have discretion around ( _e.g._ private
investment or M&A) to vectors with which they don't ( _e.g._ public markets).
You'd have to control with prices and flows from American investors in those
markets, too, which makes it difficult.

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account73466
Many of my scientific works were plagiarized by Chinese researchers. However,
I still don't buy the hate on China that is dominant in media and here on
Hacker News. Basically,

i) the US wants to forbid other countries to have a chance to win in pure
capitalistic games. Thus, it will block strong investors from certain
countries but let itself to invest in the same countries.

ii) the US (e.g., agencies and private firms) currently controls the entire
world via political and electronic backdoors installed everywhere. So it
sounds like a bad joke when people claim that China is inventing some
surveillance mechanisms like if it is a new one.

I believe that we first hand observe how propaganda (here, against China)
works. While China does some shitty things, the most precise short description
I can come up with is that "the West" wants China to be its slave. I have no
doubt this will happen to some extent in the same way it happened to Japan in
the 80ies (no slavery, but drastic decay). In 2040 we will be told to hate
India. In 2060 it will be replaced by some growing African country.

~~~
seanmcdirmid
> i) the US wants to forbid other countries to have a chance to win in pure
> capitalistic games. Thus, it will block strong investors from certain
> countries but let itself to invest in the same countries.

Don’t you mean China instead of the US? They invest in America what they won’t
let America invest in China, especially in tech. China is hardly an open
market itself.

~~~
account73466
China is the world's second largest country by foreign investment mainly
performed via Hong Kong.

~~~
seanmcdirmid
China is the largest country after all, but foreign investment is still
heavily restricted, and investment tech companies even more so. The days of
most investments into China going through HK are long gone.

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mlindner
Does anyone have a non-paywalled variant? I can't view it.

~~~
fernyellow
There's a video version in the article

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xurias
This is like...two decades too late. China has their fingers in everything
now.

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dang
Please don't post unsubstantive comments to HN and post don't post
nationalistic flamebait to HN.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
xurias
It's not unsubstantive or flamebait. It's fact. Chinese companies have been
throwing a lot of money at Western companies for years, which gives the CCP a
crazy amount of influence over wide swaths of the economy. But yeah, let's
squabble over what's flamebait while the CCP slowly takes over the world.

~~~
dang
If you continue to use HN for nationalistic flamewar we will ban you. That is
because of the degrading impact it has on discussion here, and it goes
regardless of what country you have a problem with.

HN users can, and do, make thoughtful points on such topics from many
different viewpoints. "China has their fingers in everything" is not that.

