The dots connecting TikTok, US Steel and Chinese land buys

The House of Representatives passes a bill requiring China’s ByteDance to sell TikTok to an American owner or be banned. President Joe Biden denounces Nippon Steel’s acquisition of US Steel, saying it must remain American-owned. Legislation to ban Chinese ownership of farmland is introduced in Washington and state capitals.

Is the United States turning against foreign investment?

Not judging from the statistics. According to the Organization for Economic Cooperation and Development (OECD), the US was the number one recipient of foreign direct investment in the third quarter of 2023. The US$73 billion it took in was 30% higher than the $55 billion received by the 27 countries of the European Union and nearly triple the $26 billion of the No 2 country, Ireland.

TikTok, Nippon Steel and farmland are special cases, then; the welcome mat is generally still out. But these special cases are worth looking at. If nothing else, they shed light on the types of investments that might become special cases in the future.

Investments threatening national security top the list. That’s not entirely new; the government’s Committee on Foreign Investment in the US, or CFIUS, has been doing national security reviews since its creation in 1975. The TikTok case, however, suggests that the definition of national security is being broadened.

What troubled Congress was, first, the potential for the company to share personal data on its 150 million American users with the Chinese government, and second, the company’s ability to influence American politics.

TikTok demonstrated that ability during the run-up to the Congressional vote. It urged users to contact their representatives on its behalf. They did, big time. That’s political influence.

Perso