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US lawmakers unveil bill requiring private equity firms to reveal China investment

Published 11/09/2023, 10:49 AM
Updated 11/09/2023, 05:34 PM
© Reuters. FILE PHOTO: U.S. Senator Bob Casey (D-PA) delivers remarks at the Belmont Water Treatment Center during a visit to Philadelphia, Pennsylvania, U.S., February 3, 2023. REUTERS/Elizabeth Frantz

By Karen Freifeld

(Reuters) -Two U.S. senators introduced a bipartisan bill on Thursday that would require private equity firms to make public how much they invest in China and other countries of concern.

The bill, introduced by Democratic Senator Bob Casey and Republican Senator Rick Scott, is the latest effort to track U.S. investments in China.

"The American people deserve to know where and how their savings are being invested," Casey said in a statement.

Reuters exclusively reported on the bill earlier Thursday.

The United States has sought to crack down on U.S. investment in China over fears U.S. dollars and know-how are aiding Beijing's technological advances to modernize its military.

U.S. private investment firms have poured more than $80 billion into China between 2018 and 2022, some via pension plans, according to Casey's office.

The new congressional measure would require private equity funds to annually disclose assets invested in China, Iran, Russia and North Korea to the U.S. Securities and Exchange Commission, which would then be required to make public a report based on the information.

It would also require disclosure of certain information about private security sales.

"Our adversaries, like Communist China, benefit from a complete lack of transparency," Rick Scott said in a statement. "It is time to stop sending American dollars to these countries of concern."

A spokesperson for the Chinese embassy in Washington did not immediately respond to a request for comment.

© Reuters. FILE PHOTO: U.S. Senator Bob Casey (D-PA) delivers remarks at the Belmont Water Treatment Center during a visit to Philadelphia, Pennsylvania, U.S., February 3, 2023. REUTERS/Elizabeth Frantz

Casey has also co-sponsored a measure that would require government notification of investments in certain sensitive technology sectors in China. That measure has been added as an amendment to the Senate's National Defense Authorization Act (NDAA) and may or may not survive reconciliation with the House's version.

The new bill also comes in the wake of an executive order on outbound investment to prohibit some U.S. investments in China in semiconductors and microelectronics, quantum computing and artificial intelligence, and require notification of others. The order has not yet been implemented.

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