12 July, 2018
The United States began requiring tariffs on $34 billion worth of Chinese imports last week. The newly-announced taxes target 800 products from China.
Now, another trade battle between the two countries is taking shape.
The Trump administration is considering whether the government should block Chinese investments in some U.S. businesses. Administration officials are looking at companies that work mainly in fields such as robotics, artificial intelligence (AI) and other computer technology.
The U.S. Department of Defense says some of these fields are related to national security. The department prepared a report on growing Chinese ties to American companies.
U.S. lawmakers are considering expanding a Treasury Department system for examining investments from overseas. Texas Senator John Cornyn is a member of the Republican Party.
"I assure you that the threat China poses is real and the dangers we worry about are already taking effect."
Cornyn supports the Foreign Investment Risk Review Modernization Act, a bill that would strengthen the inspection process. He added that the lack of American action can be only dangerous for the country and needs to be stopped.
Limiting Chinese investments has to be done carefully, said Jeff Moon, a former assistant U.S. trade representative.
"The biggest problem I see is just vagueness when we talk about Chinese investment," Moon added. He asked whether the United States would question anyone from China who invested a small amount in the economy.
The Thinking of Silicon Valley
California's Silicon Valley is considered the home of many American high-tech companies. Businesses there are pleased that the Trump administration seems to have backed away from a plan to restrict Chinese investment. It would block investment into AI and other technologies in the United States by a company with more than 25 percent Chinese ownership.
While the national security concerns are real, high-tech companies and investors do not want policies that set up strong barriers to overseas investment. That is because the investment from China has been good for the American economy, notes Sean Randolph of the Bay Area Council Economic Institute.
"How concerned should we be about...leakage, if that's the term," Randolph asked. He wondered how the United States should work to stop leakage in a way that will not have a damaging economic effect, either in the U.S. or China.
Collaboration valued
Recently, Silicon Valley held its first U.S.-China meeting on AI technologies. Delegates discussed how the two nations can work better together.
"The technology is shared...and better for humankind. I don't think it's one country against another country," said Tao Wang of SAIC Capital.
Helen Liang is a managing partner of FoundersX, an investment company. She noted that business leaders and companies in AI hope to be able to work on big issues like health care, transportation and work.
"We are looking to solve society's problems," said Liang, whose business helps startup companies build business relationships in China. She added that technology looks past the politics of nations.
"Disruption" from both countries
Nicolas Miailhe is president of The Future Society, a non-profit research group. He says that any limits on investment from China to the United States could also slow down U.S. innovation.
"We have been used to disruptive business models emerging from the Silicon Valley here. This is changing. [We are now] seeing new and disrupting, disruptive business models emerging from China."
"Disruption" is a favorite term in Silicon Valley. It describes the way new technologies can lead great and unpredictable results in an industry.
The possibility of disruption is what excites these business leaders. It is also what worries some U.S. lawmakers back in Washington.
I'm Susan Shand.
VOA's Michelle Quinn reported this story. Susan Shand adapted it.
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Words in This Story
tariff – n. a tax on goods coming into or leaving a country
artificial intelligence –n.ability of a machine to reproduce human behavior
pose – v.to be or create a possible threat, danger or problem
vagueness – n.in a way that is not clearly stated or expressed
startup – n.a new company
innovation – n.the act of creating new ideas, systems or products