Companies based in the United States that have “industrially significant technology” may soon be essentially off limits to Chinese buyouts as the U.S. Treasury Department is drafting curbs which would prevent companies that have at least 25 percent Chinese ownership from buying such firms. The comments from this unnamed government official were echoed by a report in the Wall Street Journal as well.

Reuters reports that the United States Treasury Department is working on preventing companies with at least 25 percent Chinese ownership from acquiring companies based in the United States that have “industrially significant technology.” There’s no clarity as yet what constitutes “industrially significant technology.”

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These restrictions are expected to be announced later this week and it’s possible that the Chinese ownership threshold may change before that. If enforced, the move is going to hit China’s plans to upgrade its capabilities in advanced information technology, marine engineering, pharmaceuticals, and other high-technology industries.

The Wall Street Journal also mentions in a report that enhanced export controls have been proposed by the U.S. Commerce Department and National Security Council as they want such technologies from being shipped to China.

The report did add that the restrictions may only be focused at new deals and may not unravel existing ones, however, the planned investment bar will not differentiate private and state-owned Chinese companies.

Filed in General. Read more about China. Source: reuters

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