Senator John Kennedy (R-LA) has introduced the Exposing China’s Belt and Road Investment in America Act of 2021, which he said is designed "to review investments that businesses controlled by the Chinese Communist Party make on U.S. soil." He further stated that "China routinely makes such 'greenfield' investments while buying land, building factories and taking advantage of state and local tax breaks in America to expand China’s influence." (He introduced this same legislation in 2020.)
According to Senator Kennedy, "[g]reenfield projects are the most common way that Chinese companies enter the American market," and they "are quickly becoming Beijing’s preferred method for expanding influence under its Belt and Road Initiative, the international infrastructure plan meant to increase the regime’s global power." He also said that "China’s state-operated enterprises use the greenfield model to siphon intellectual property, influence and other assets away from U.S. businesses."
The main section of the legislation is entitled "Review by Committee on Foreign Investment in the United States of greenfield investments by People's Republic of China." Here, the "Government of the People’s Republic of China" is defined so as to include "the national and sub-national governments within the People’s Republic of China, including any departments, agencies, or instrumentalities of such governments."
The legislation would expand the definition of "covered transactions" to be reviewed by CFIUS to include the following:
An investment by a foreign person that—
‘‘(aa) the completed or planned purchase or lease by, or a concession to, the foreign person of private or public real estate in the United States; and
‘‘(bb) the establishment of a United States business to operate a factory or other facility on that real estate; and
‘‘(II) could result in control, including through formal or informal arrangements to act in concert, of that United States business by—
‘‘(aa) the Government of the People’s Republic of China;
‘‘(bb) a person owned or controlled by, or acting on behalf of, that Government;
‘‘(cc) an entity in which that Government has, directly or indirectly, including through formal or informal arrangements to act in concert, a 5 percent or greater interest;
‘‘(dd) an entity in which that Government has, directly or indirectly, the right or power to appoint, or approve the appointment of, any members of the board of directors, board of supervisors, or an equivalent governing body (including external directors and other individuals who perform the duties usually associated with such titles) or officers (including the president, senior vice president, executive vice president, and other individuals who perform duties normally associated with such titles) of any other entity that held, directly or indirectly, including through formal or informal arrangements to act in concert, a 17 percent or greater interest in the entity in the preceding 3 years; or
‘‘(ee) an entity in which any members or officers described in item (dd) of any other entity holding, directly or indirectly, including through formal or informal arrangements to act in concert, a 5 percent or greater interest in the entity are members of the Chinese Communist Party or have been members of the Chinese Communist Party in the preceding 3 years.’’
Senator Kennedy's press release summarizes the effect of the bill as follows:
the bill would require a CFIUS review for any investment that is made by a foreign person that both:
- involves the acquisition of real estate in the U.S. and the establishment of a U.S. business on such real estate, and
- results in China’s direct or indirect control of that U.S. business.
Under the legislation, if the transaction is a covered one, the parties would be required to file a declaration with CFIUS, which would then review the investment for national security concerns.