US needs caution on China investment curbs, Raimondo says

The US is prioritizing plans to scrutinize US capital flows to China, but must move cautiously because it wants to ensure the strategy is targeted, Commerce Secretary Gina Raimondo said.   

The Biden administration and Congress are both considering proposals that would create a system for monitoring and potentially blocking US investments in China, a process Raimondo described as “complicated” because there are many US pension firms that have invested people’s retirement money in the nation. 

“You certainly don’t want to do any type of thing that has an unintended consequence, that hurts folks,” she said in an interview at Bloomberg’s office in Washington Thursday. “You don’t want to be overly broad. We want commerce, we want trade, we want global investment. Anything that’s overly broad hurts American workers and the economy.” 

Lawmakers and the administration are trying to strike a balance between investments and national-security concerns they have about information and technology being used by what they see as America’s top economic and political competitor.  

“It’s an issue, it’s a priority,” Raimondo said. “But it’s better to take a tick more time and get it right than to issue a policy which is overly broad and isn’t right. We’ve never done this before — it’s one thing to deny goods. It’s another thing to deny money flows. And so we’re just trying to be cautious to get it right.”  

A new House committee scrutinizing China is reviewing aspects of US competition with Beijing, including export controls and outbound investment review designed to limit US capital. Committee Chairman Mike Gallagher of Wisconsin said last month that there’s a risk US capital could “unwittingly fund” human-rights abuses or advances in military technology.