On Thursday, President Biden signed an executive order that was designed to sharpen the federal government’s powers to block Chinese investment in technology in the United States and limit its access to private data on citizens. This move is certain to increase tensions with Beijing because it strengthens the federal government’s ability to block Chinese investment and it limits Chinese access to private data.
The Committee on Foreign Investments in the United States was established by Congress about half a century ago. The new order is intended to bring the activities of this shadowy committee into clearer focus.
But the most far-reaching part of Mr. Biden’s new order, and possibly the element that will be the most important in the coming months, directs the committee to consider whether an upcoming deal involves the purchase of a business with access to sensitive data belonging to Americans, and whether a foreign company or government could exploit that information. This directive is potentially the most important part of Mr. Biden’s new order.
This phrase reflects a rising worry about China’s capacity to access the personal information that individuals in the United States send over to mobile applications and other services. TikTok is a famous video app that is controlled by the Chinese government, and some people are concerned that the Chinese government may get access to the data of its users. The committee, which goes by the abbreviation CFIUS, is thought to already be investigating TikTok.
The Biden administration has not revealed any information on the status of their investigation into TikTok as of yet. During the last few months of the Trump administration, there was a hurried attempt to coerce a sale of the American operations of TikTok to a consortium of American and other Western corporations; however, this plan was unsuccessful and swiftly broke apart. And the larger question in the expanding technology wars between Washington and Beijing was never resolved by the deal: How should the United States deal with the foreign apps that are becoming embedded on the screens of Americans’ smartphones and, as a result, in the daily fabric of digital life in the United States?
In the most recent few months, information has surfaced suggesting that individuals working for TikTok in China had access to data regarding users from the United States who joined up for the programme. Although there is no proof available to the public that the corporation has provided data to the Chinese government, the company may be required to do so under Chinese national security legislation. The question that has to be answered right now is whether mandating the transfer of all of that data to servers located in the United States will really solve the problem or just make it more manageable. In addition, there are persistent concerns over the identity of the individuals responsible for the development of the algorithms that monitor the pursuits and activities of online Americans.
The Chinese intelligence services have gone to considerable lengths to collect large troves of data about Americans, including hacking the databases of the Office of Personnel Management (OPM) when it was under the administration of President Obama. The knowledge that 22.5 million Americans had applied for security clearances was in the hands of Chinese individuals before the American authorities realised what was going on. What exactly China did with such information has never been made entirely apparent.
Even while “outbound investment” by American corporations in other countries is not regulated by the presidential order, which has been expected for months, the Biden administration is likely to seek additional authorities to control that as well. One issue that has been a source of worry for many years is China’s demand that international businesses hand up their technological know-how as a condition of being permitted to compete in the Chinese market.
Nigel Inkster, a former director of operations and intelligence for Britain’s Secret Intelligence Service, wrote in the opinion section of The New York Times earlier this week that “for China, this work is about survival.” He was describing covert operations by Chinese operatives to gain technology or manufacturing techniques that would speed Beijing’s way. He mentioned a regulation in China that mandates the participation of Chinese individuals in clandestine information gathering operations.
The new order instructs the Committee on Foreign Investment in the United States to focus on certain sorts of transactions that might provide a foreign power with access to technology that President Biden has recognised as essential to the expansion of the American economy. According to a synopsis provided by the White House, this includes “microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced renewable energy, and climate adaption technologies.”
As long as a technology had the potential to be crucial to national security, the members of CFIUS would not be required to prove that it was now critical to the security of the country. For instance, artificial intelligence software or quantum computers that would either generate robust data encryption or break existing encryption might prompt the government to take action in order to prevent the technology from falling into the hands of Chinese or other rivals.