National Security Institute Publishes New Decision Memo: “Restricting U.S. Outbound Investment to Targeted Chinese Sectors”

May 19, 2023
Contact: Brooke Aghakhan

National Security Institute Publishes New Decision Memo:
“Restricting U.S. Outbound Investment to Targeted Chinese Sectors”


Arlington, VA – Today, the National Security Institute (NSI) at George Mason University’s Antonin Scalia Law School published its latest paper, Restricting U.S. Outbound Investment to Targeted Chinese Sectors,” by NSI Senior Fellow Andy Keiser and NSI Fellow and Adjunct Professor of Law at George Mason University Antonin Scalia Law School Michael Geffroy, ahead of the Biden administration’s anticipated executive order (EO) to establish an outbound investment screening mechanism.

The paper, which identifies policy solutions to restrict U.S. investments into select Chinese industries that could compromise U.S. national security, emphasizes how the EO should address the gaps in the review of outbound capital flows, that could be used to assist the Chinese Communist Party (CCP) to dominate strategically important sectors, including semiconductors, artificial intelligence, quantum computing, decryption, and other advanced technologies.

The paper also argues the anticipated EO should be finalized quickly and that the EO should restrict investment in any technology that is used by the CCP to repress its own people or to export such repression globally, including targeting enabling technologies.

“In many ways, the West – led by the United States – has funded China’s rise to become what the Pentagon labels “the pacing threat” our nation faces into the future. While the U.S. has finally wised up to close many of legitimate and illegitimate means China is using for its military and economic modernization, one gaping hole remains: that of outbound U.S. investment into select Chinese sectors that compromise U.S. national security,” said NSI Senior Fellow Andy Keiser, “This paper examines the issue and offers three actionable recommendations to close the gap that is funneling cash and know-how in critical areas directly to our preeminent adversary.”

“With the anticipated release of the executive order establishing an outbound investment screening/prohibition mechanism, it is critical to establish strong accountability measures to ensure U.S. investors are not funding technologies that the CCP can use to threaten the United States or to suppress basic human liberties,” said Michael Geffroy, NSI Fellow and Adjunct Professor of Law at George Mason University Antonin Scalia Law School. “Additionally, we’ve outlined how imperative it is for U.S. companies and investors to reevaluate both their current operations in China, as well their plans for future operations in the advanced technology sectors of the Chinese economy.”

“The CCP’s economic, political, and technological coercion takes a variety of forms, it is high time that American companies and investors stop supporting China’s strategic national interests,” said NSI Founder and Executive Director, Jamil Jaffer, “This paper by my colleagues at NSI provides recommendations to move the ball forward and limit investments that aid the CCP’s repressive political, technological, and economic efforts.”

The paper is available here.

About the National Security Institute

The National Security Institute serves as a platform for research, teaching, scholarship, and policy development that incorporates a realistic assessment of the threats facing the United States and its allies, as well as an appreciation of the legal and practical challenges facing U.S. intelligence, defense, law enforcement, homeland security, and cybersecurity communities. NSI draws on the experience of its fellows, as well as its highly distinguished advisory board and faculty, to produce timely research and policy materials that deliver insightful analysis and actionable recommendations to senior policymakers in the White House and key departments and agencies, as well as those on Capitol Hill.

About George Mason

George Mason University is Virginia’s largest public research university. Located near Washington, D.C., Mason enrolls more than 33,000 students from 130 countries and all 50 states. Mason has grown rapidly over the past half-century and is recognized for its innovation and entrepreneurship, remarkable diversity, and commitment to accessibility.

About the Scalia Law School

The Antonin Scalia Law School at George Mason University is defined by three words: Learn. Challenge. Lead. Students receive an outstanding legal education (Learn), are taught to critically evaluate prevailing orthodoxy and pursue new ideas (Challenge), and, ultimately, are well prepared to distinguish themselves in their chosen fields (Lead). It has been one of America’s top-ranked law schools for the last fifteen years.