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Daily Traders Edge

Information Wants to Be Chinese

February 13
09:51 2018

In November, while Donald Trump was on his first state visit to Beijing, Republican Senator John Cornyn and Democrat Dianne Feinstein introduced a bill that would dramatically expand the government’s ability to block foreign investment in U.S. technology companies. The bill was directed at the Committee on Foreign Investment in the United States, or CFIUS, an interagency panel that scrutinizes purchases by “potential adversaries” that go against “national interests.” It was clear which adversary most concerned them: China had received more CFIUS reviews than any other country, according to the most recent data.

The bill is expected to pass, but not without the opposition of the Big Five firms—Apple, Amazon, Google, Facebook, and Microsoft. Silicon Valley stands to lose billions of investment dollars from China, and with tech companies spending roughly $49 million a year on Washington lobbyists, twice as much as Wall Street, resistance should be considerable. It will also highlight the fact that, after years of cooperation, Capitol Hill and Silicon Valley are, increasingly, at odds.

America’s technology companies and politicians have long spoken the same language, celebrating openness, deregulation, and disruption as the drivers of innovation—and, in theory, broad economic prosperity. During the Obama administration, over 250 people shuttled back and forth between jobs in the White House and at Google. Yet within the last year, the tone has shifted. Both parties have reacted against Russia’s manipulation of the social media giants to intervene in the presidential election, and the resurgence of populist nationalism, both here and abroad, has altered political dynamics. In the CFIUS bill, government fears of China as an economic and military rival confront the realities of a technology industry in which capital and data flow across national borders.

Continue Reading at New Republic

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