Republican Sen. John Cornyn (pictured) has cosponsered legislation to require CFIUS to increase scrutiny of foreign firms' investments in the US. Photo:  Reuters/Joshua Roberts
Republican Senator John Cornyn's Ukraine Lend Lease bill has won overwhelming support in the House. File Photo: Agencies / Joshua Roberts

Bipartisan congressional legislation has been introduced in Washington that would require the Committee on Foreign Investment in the United States (CFIUS) to stiffen its scrutiny of foreign firms — including those from China — that want to invest in US businesses.

The move reflects growing US concerns that China is accessing sensitive technology by acquiring or taking stakes in cutting-edge Silicon Valley firms. CFIUS is the inter-agency committee that reviews foreign M&As on national security grounds. The panel has the power to block deals.

The long-expected bill was introduced in the Senate on Wednesday by Republican Sen. John Cornyn of Texas and Democratic Senator Diane Feinstein of California. A similar bill was introduced in the House by Rep. Robert Pittenger, a Republican from North Carolina.

If passed, the legislation would add thousands of foreign-linked firms to the list of entities screened annually by CFIUS. The issue focuses on Chinese acquisition of US firms specializing in artificial intelligence (AI), robotics, advanced chips, driverless cars and other tech. Critics charge that permitting unbridled access has military and economic competitiveness implications.

Some analysts have questioned how effective such a US crackdown would be — given the general spread of technologies such as AI and robotics. Others say US tech firms should be allowed to access Chinese capital and that the economic and security threats to the US have been overblown.