China US Photo:VCG

US Congressional negotiators are preparing to drop China investment curbs from the Defense Bill, reports said, showing that restrictions on Chinese industries could mean a heavy price for Americans, observers said, while calling for a scrapping of sanctions on Chinese firms to push forward two-way trade and investment cooperation. 

Congressional negotiators on Tuesday were "poised to" abandon plans to use the annual defense policy bill to tighten controls on US investment in Chinese technology, Bloomberg reported, citing people familiar with the issue.

According to the people, House Financial Services Chairman Patrick McHenry is effectively blocking a measure that would require firms to notify the government about certain investments in China and other countries of concern.

The amendment aligns with an executive order by US President Joe Biden to curb spending on high-tech sectors in China. In August, Biden signed an executive order to restrict new high-tech US-based investment in China, especially targeting semiconductors, microelectronics, quantum information and artificial intelligence (AI).

"The reported dropping indicates the complexity of the US political environment, since the ban will also severely hurt the interests of US communities," Gao Lingyun, an expert at the Chinese Academy of Social Sciences, told the Global Times on Wednesday.

The Senate overwhelmingly approved the measure as part of its version of the Defense Bill earlier this year, but it faces strong opposition in the House from McHenry, who has long opposed broad investment restrictions in favor of an approach that targets individual companies, the Bloomberg report said.

"A lifting of sanctions is the pursuit of China all the time, and serves as a major obstacle hindering the progress of China-US economic and trade," Gao said.

It is hoped that the US will translate its promise of "not intending to suppress and contain China" into action and meet China halfway to create good conditions for enterprises to carry out two-way trade and investment cooperation, China's Ministry of Commerce spokesperson Shu Jueting said at a regular press briefing on November 23. 

The comment was made in response to a query about whether the improvement in China-US relations after the China-US summit in San Francisco could "restore foreign investors' willingness to invest in China," after US investment inflows into China plunged so far this year, especially in the technology field.

During the China-US summit in mid-November, the Chinese and US leaders met and set the direction for the healthy, stable and sustainable development of bilateral relations. 

Biden noted that a stable and developing China serves the interests of the US and the world. The US has no intention to halt China's economic development or to contain China, nor to seek "decoupling" from China, Shu said. 

Shu noted that the push for "decoupling" and so-called de-risking would only artificially interfere with normal investment and operations by enterprises, which would not be in the fundamental interests of companies in either country.

As the world's top two economies, China and the US are both important participants and contributors of global tech innovation and development, and they have broad common interests and scope for cooperation in technology. They should strengthen cooperation and exchanges in this regard to mutually promote technology advances and benefit all human beings, analysts said.