Lawmakers are trying to halt the flow of U.S. technology to foreign investors, primarily it appears the Chinese. They are trying to strengthen an interagency body known as the Committee on Foreign Investment in the United States (CFIUS.) Right now, it can block foreign entities from buying majority control of U.S. companies. A new bill in Congress would expand its powers by letting CFIUS also block deals involving minority investments and joint ventures.
Some tightening up is a wise course because the Chinese have figured out how to use venture capital and all sorts of tools to create an absolutely massive flow of U.S. technology into their hands.
So much so that many technological genies are already out of the bottle. Plus, the Chinese are spending massively on their own basic research, catching up to U.S. levels, according to this report. The Chinese appear to be racing ahead of the United States to develop genetic editing, clone primates, build faster supercomputers, create vast facial recognition networks using millions of cameras, and other technologies.
The real message is that the United States needs to recognize that it is in danger of being overtaken in at least some areas by the Chinese. I believe a response will require the kind of national effort we saw after the Soviets surprised us with the success of their Sputnik satellite in 1957, or after Richard Nixon declared war on cancer in 1971. Another example was the Manhattan Project that developed the nuclear bomb that ended World War II.
In all those cases, government and the private sector worked together to achieve national goals. In today’s climate of opinion in Washington, such consensus appears unlikely. It may require a shock to persuade our political leaders to rise up from their swamp and focus on the real long-term challenge to American interests.