U.S. News Outlet Financial Times Features Christian Davis's Insights on the Impact of a Strengthened Committee on Foreign Investment in the United States (CFIUS)
In a recent article titled "Leading Chinese health tech start-up ensnared by CFIUS," the Financial Times quoted Christian Davis from Gump international trade partner. Davis' statement suggests that both U.S. and Chinese policies may be contributing to reduced investment flows between the two countries.
The article focuses on a leading Chinese health company, iCarbonX, which has been forced to divest from two U.S. companies it acquired. The Chinese company Ant Financial, another notable Chinese firm, has also experienced a similar fate. Both companies were compelled to resell U.S. companies they acquired in recent years due to increased controls by the Committee on Foreign Investment in the United States (CFIUS).
The new law, enacted last year, grants CFIUS the power to block investments from China that might give access to U.S. tech companies' business information and other key data. However, the article does not provide any new information about the specific U.S. companies that iCarbonX was forced to divest from or the reasons behind CFIUS' intervention.
Interestingly, Davis stated that the lack of enthusiasm in doing business with Chinese companies is not one-sided. He did not specify which U.S. sellers he was referring to in his statement. Davis also noted that Chinese policy discourages flows to the U.S.
Since the new law, the number of proposed Chinese acquisitions of U.S. companies that have been blocked or withdrawn has risen sharply. However, the article does not provide any new information about the number of these acquisitions that have been affected. Davis mentioned that CFIUS has had a chilling effect on such transactions.
Despite the challenges, both U.S. and Chinese companies continue to navigate the complexities of international trade, seeking opportunities for growth and collaboration while complying with the evolving regulations in both countries.
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