“We’ll try to enable Cfius to take a tougher line against certain investments emanating from those nations that pose a clear threat to our national security, focused particularly in the area of advanced technology,” said Senator John Cornyn, Republican of Texas, who said last week that he would propose the legislation.
The Trump administration has not staked out a formal stance, but trade experts are watching how the committee treats a pair of pending deals as a test of the political winds. The first is a $1.2 billion bid by Ant Financial — the electronic payments affiliate of the Alibaba Group, the Chinese e-commerce giant — for a remittances company based in Dallas called MoneyGram. The second is a $1.3 billion offer by a China-backed buyout fund for Lattice Semiconductor, which makes a range of advanced communications and telecommunication chips.
Chinese buyers are pouring more and more money into the United States. In 2016, Chinese investment in America jumped threefold to $46 billion from the year before, according to the research firm Rhodium Group. Chinese purchases in recent years have included buildings and movie theater chains.
But some deals have been in potentially sensitive areas, like semiconductors, which Cfius has increasingly blocked. A growing number have also been among start-ups working on cutting-edge technology, but they are difficult to track and are often too small to be reviewed by Cfius.
In a report this year that was first reported by The New York Times, the Pentagon said it was concerned about the flow of Chinese investment into start-ups working on important technology like artificial intelligence, robotics and augmented reality.
Critics also argue that Beijing and companies supported by the government have sought to form joint ventures or license technology, neither of which Cfius currently reviews.
“There is a perception that different financial structures are being used to avoid potential Cfius oversight,” said Andrew Shapiro, a founder of the advisory firm Beacon Global Strategies and former assistant secretary of state for political-military affairs. “So they will try to close those loopholes.”
Over the past two years, Cfius (pronounced sih-fee-us) has broken up a number of major Chinese bids for semiconductor companies, leading to Chinese complaints.
It is unclear how China’s government would respond to the revamped regulator, but the move would most likely…