(Bloomberg) -- Lawmakers want to include China among a proposed group of hostile nations whose companies could undergo extra scrutiny for national security risks if they seek to buy stakes in U.S. corporations.
Firms from Russia, Iran, Venezuela and North Korea would also be subject to more extensive review by the Committee on Foreign Investments in the United States, or Cfius, which reviews overseas investment in the U.S. for national security concerns, according a copy of the House bill obtained by Bloomberg News.
The panel would scrutinize moves to merge, acquire or participate in joint ventures with American companies with access to sensitive data about U.S. citizens or critical technologies.
The proposal, scheduled to be introduced Wednesday, defines a “country of special concern” as: a foreign country subject to certain export restrictions on military end-use items; any state sponsor of terrorism; and nations subject to U.S. arms embargo.
The House bill and a companion proposal in the Senate have bipartisan support and the backing of the White House. The Treasury Department under Secretary Steven Mnuchin has worked closely with Congress to draft the legislation as the government seeks to establish additional criteria to weigh security threats.
The Trump administration is “very optimistic” that Congress will pass the Cfius reform bill, Heath Tarbert, an assistant secretary at Treasury, said Tuesday speaking at a conference in Washington.
The proposal follows a spree of Chinese deals in the U.S. that has triggered warnings from Republicans and Democrats about threats to American security. Lawmakers say the current framework for reviewing deals needs to be updated to broaden reviews and consider new threats to U.S. security.
The move could complicate an already tenuous relationship between the U.S. and China. Mnuchin is hosting China’s top economic envoy, Liu He, on Thursday and Friday in Washington as the two nations try to avoid a costly trade war amid the Trump administration’s demands for a more balanced trade relationship. Mnuchin met with Chinese officials in Beijing earlier this month in a meeting that ended in discord.
However Congress, in a rare show of bipartisanship, is united in taking a harder line with China.
“One place that I will give the president credit is I think one of the reasons that things are better is frankly that he has gotten a little tougher on China,” Senate Minority Leader Chuck Schumer said during a conference in California earlier this month.
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