The Biden administration is taking steps to tighten its grip on foreign investments near military bases, with a new proposal that could impact Chinese companies looking to build factories in the United States.
The Treasury Department unveiled a new rule that would add over 50 military installations to a list of sensitive locations, making it harder for foreign entities to purchase land nearby. This move follows growing concerns in Congress about Chinese investments threatening national security, as well as recent tariffs imposed by the Biden administration on Chinese imports.
Treasury Secretary Janet L. Yellen emphasized the importance of the Committee on Foreign Investment in the United States (CFIUS) in safeguarding national security, stating that the proposed rule would significantly expand its jurisdiction to review real estate transactions near military bases.
The rule would give CFIUS the authority to scrutinize deals within one mile of 40 additional military installations and within 100 miles of 19 new installations. This expansion was based on a review by federal agencies, including the Defense Department, to identify the most sensitive facilities.
Experts believe that the new rule could complicate Chinese investments in the U.S., which have been declining due to heightened scrutiny and anti-China sentiment. President Biden’s previous order forced a Chinese-backed cryptocurrency firm to divest from a property near a Wyoming nuclear missile base.
While the rule would not apply retroactively, it could impact future transactions, such as the $2.4 billion manufacturing facility being built by Gotion, a Chinese electric vehicle battery producer, near Camp Grayling in Michigan. The project has faced opposition from locals concerned about its proximity to the National Guard training facility.
The Biden administration is also reviewing Nippon Steel’s acquisition of U.S. Steel, with a focus on broader national security concerns. Experts suggest that the expansion of the list of military installations is aimed at addressing gaps in CFIUS’s oversight of real estate transactions.
States like Florida have also taken steps to limit foreign investments, with a new law restricting Chinese individuals without green cards from buying residential property. Overall, the proposed rule reflects a broader effort to safeguard national security interests in the face of increasing foreign investments near military bases.
