Chinese language and U.S. flags flutter outdoors an organization constructing in Shanghai, China April 14, 2021. REUTERS/Aly Music

WASHINGTON, Aug 2 (Reuters) – Chinese language buyers roughly doubled the variety of functions they made final yr searching for U.S. regulatory clearance for proposed stakes in American firms, in line with a report the federal government plans to launch on Tuesday.

The Treasury Division report seen by Reuters exhibits that Chinese language buyers filed 44 so-called “lined notices” searching for greenlights for his or her offers in U.S. President Joe Biden’s first yr in workplace in comparison with 17 such filings in 2020.

The 2021 figures for China included filings from Hong Kong-based buyers, whereas the 2020 numbers place Hong Kong’s three such filings right into a separate class, because of a shift in U.S. coverage.

Most foreigners searching for to take even non-controlling stakes in U.S. firms should search approval from CFIUS, a robust committee headed by the Treasury Division, which opinions transactions for nationwide safety issues and has the ability to dam them.

The committee, whose powers have been dramatically expanded underneath a 2018 regulation, was utilized by former President Donald Trump to upend many Chinese language investments in the USA.

The brand new report exhibits China additionally made up the biggest variety of “lined notices,” amongst all nations, accounting for 16.5% of the entire, adopted by Canada and Japan at 10.3% and 9.6%, respectively.

High sectors for would-be Chinese language funding within the 2019-2021 interval, have been “finance, info and providers” and manufacturing, in line with the lined notices information.

However Chinese language buyers solely sought 10 investments in crucial sectors together with know-how, infrastructure and information companies in 2021, behind the UK, Japan, South Korea, the Cayman Islands and Israel.

Whereas not each submitting represents a novel transaction, and never each submitting is included within the “lined discover” class, the uptick factors to a possible improve in U.S. offers sought by Chinese language buyers. The report doesn’t element CFIUS responses to particular person filings or transactions.

A regulation accepted in 2018, generally known as FIRRMA, expanded the powers of CFIUS to probe transactions beforehand excluded from its purview, together with makes an attempt by foreigners to buy non-controlling stakes in U.S. firms. It additionally instituted necessary submitting necessities for sure transactions.

Earlier than these legal guidelines have been handed, China accounted for many investments in American crucial know-how within the 2016-2017 interval, accounting for greater than a fifth of the entire.

Modifying by Sam Holmes

Our Requirements: The Thomson Reuters Belief Ideas.