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American techies in China may be breaking the law by showing up to work
Pundit tips next wave of bans will target foreign investment in Chinese tech
The USA's restrictions on semiconductor technology transfer to China are about to wreak havoc on the lives of Americans working in the Middle Kingdom, according to former Department of Transportation official and US political expert Steven Okun.
Speaking at an American Club of Singapore event on Thursday, Okun said the regulations announced last Friday don't just stop AI chips and semiconductor manufacturing equipment reaching China – they also force US nationals working at related Chinese companies to resign.
A Clinton-era Deputy General Counsel at the Department of Transportation and now CEO of APAC Advisors, Okun offered the following observation:
One of the parts of the executive order that just came out is that US persons – citizens or green card holders – can't work in the Chinese semiconductor industry.
You have a lot of Chinese Americans who are in China, who are working in that industry. They are going to have to quit and go back to the US, or at least quit and not work in China anymore – or they're going to have to give up their US citizenship.
Okun said hundreds of Chinese American semiconductor, AI and other tech industry workers are potentially violating US law just by going to work each day.
"There's a real legal issue that [Chinese American tech workers] didn’t think they'd have to deal with," added Okun.
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Okun also said the Biden administration almost certainly plans outbound investment restrictions aimed at China. He elaborated:
What we have now is the Committee on Foreign investment in the United States (CFIUS), so if a foreigner wants to buy a seaport, or utilities, or other critical infrastructure, it must get approved by the Treasury Department before that foreigner's allowed to buy that asset in the United States. That is an inbound investment restriction.
What we think is coming is a reverse CFIUS which means before a US company can buy a Chinese company, it has to get approved by the United States. That has never happened before, other than with military technology, but it is now going to be a much broader outbound investment review than we've ever had before.
One consequence of a potential reverse CFIUS is that venture capital firms in countries like Singapore that invest in tech companies in China and raise money from sources that include US citizens will have to seek Uncle Sam's permission before buying Chinese companies.
"That's coming, regardless of what happens in the midterm elections," said the CEO.
On the subject of the US's midterm elections and the potential for foreign hacking and interference, Okun said such activity cannot be discounted – but interference from Russia has decreased because "Putin is so tied down in Ukraine."
"The worry has always been not over the hacking of the voting systems and that people would be changing the votes, but on disinformation and influence operations," he added. ®