According to Reuters, a bipartisan group of lawmakers announced Monday that they have reached a proposal that would give the U.S. government powers to block U.S. investment in China.

The House Foreign Affairs Committee lawmakers stated that they have discussed with related parties “on developing a robust, targeted outbound investment mechanism to ensure the United States is not ceding its manufacturing power in industries critical to our economic and national security to foreign adversaries.”

They added, “The refined proposal released today has bipartisan, bicameral support and addresses industry concerns, including the scope of prospective activities, industries covered, and the prevention of duplicative authorities.” 

The initial version of the proposal is a part of broad legislation designed to boost U.S. competitiveness over China and also subsidies $52 billion to the U.S. semiconductor industry. 

However, some chipmakers opposed the “outbound investment” proposal because they were concerned that the legislation might reduce companies’ investments abroad.

Senator Mark Warner told Reuters that the bill is now modified to concentrate only on subsidies for chipmakers, possibly removing trade provisions and other measures designed to help U.S. industries in science, business, and technology to compete with China.

The Senate version’s outbound investment proposal was originally a standalone bill. But it was later combined with the broader House version’s bill, which includes the grants for chipmakers targeted at countering China’s rise.

Meanwhile, China reportedly lobbies against the bill. It even warned U.S. firms of losing China’s market share if they supported the legislation.  

Last month, Secretary of Commerce Gina Raimondo said that the Chinese regime opposed Congress’s effort to strengthen U.S. semiconductor capability because it would give the U.S a competitive advantage to boost the vital chip industry.

President Joe Biden also called on Congress to quickly pass the Bipartisan Innovation Act, including the CHIPS Act. He stressed that the bill aims to strengthen U.S. technology and innovation and keep pace with China, a major geopolitical rival.

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