TikTok Was Just the Beginning: Trump Administration is Stepping Up Scrutiny of Past Chinese Tech Investments



Jeanne Whalen | The Washington Post

The federal government is stepping up its scrutiny of past Chinese investments in U.S. tech start-ups, sending a flurry of inquiries about deals that are at times years old.

The emailed requests for information are being sent by a new enforcement arm of a government committee that monitors foreign investment for national-security risks, according to lawyers and a redacted copy of one email reviewed by The Washington Post. After the Committee on Foreign Investment in the United States (CFIUS““““““““`) gathers details from the companies, it can decide whether to probe the matter further and even push the foreign investor to divest, as it did in the case of TikTok.

The letters, which began landing in dozens of companies’ email inboxes in the spring, reflect the broadly held view among U.S. officials and lawmakers that the United States failed in recent years to adequately screen investments pouring in from China and other countries — particularly low-profile venture-capital investments that didn’t make the headlines. The 2018 Foreign Investment Risk Review Modernization Act, or FIRRMA, aimed to address that by boosting CFIUS’s funding and powers.

Tech executives say the inquiries are part of a growing chill in U.S.-China relations that has made Silicon Valley companies more cautious about accepting foreign investments and caused some China-backed venture-capital funds to curb their activity.

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