Louis Lehot and Christopher Swift Comment on U.S.-China “Decoupling”

Foley & Lardner LLP partners Louis Lehot and Christopher Swift are quoted in the IFLR article, “Investors should stand ready for further US-China decoupling,” discussing the recent executive order from the Biden administration restricting investments in certain technologies in countries of concern and the likely prospect of future actions aimed at limiting the economic co-dependencies of the two countries.

“Right now, on the outbound investment side with the new executive order, we’re only seeing a focus on critical technology,” said Swift. “But based on everything we’re tracking up on Capitol Hill and on other things we’ve seen develop in the last five years, it would not surprise me if in the final chapter of the story, infrastructure and data issues were treated in much the same way as under the CFIUS [Committee on Foreign Investment in the United States] process.”

“Suddenly, everything becomes a matter of national security and we’re looking in our CFIUS cases at things that a decade or so ago, we would never have considered as being risk,” added Swift.

“These are the two largest consumer economies in the world, and to think that there could be decoupling between them cannot be good or healthy,” commented Lehot. “There’s more trade and investment going back and forth between China and the U.S. than ever before. Of course, there’s been a giant chilling effect that’s happened since CFIUS tightened up the screws five years ago, but U.S. technology companies need access to Chinese capital and consumers, and Chinese companies need access to U.S. technology and consumers.”

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