A $716 billion defense authorization bill was passed by the US House of Representatives as the US is locked in a trade dispute with China. It is meant to control China's investments in the US even more; an example of how it does is included in the bill, a section which stops Chinese telecommunications firms from distributing technology for use by the US government.
The bill, according to Reuters, is named after Senator John S. McCain. The John S. McCain National Defense Authorization Act got an overwhelming vote in the house, 359-54. Even then, the bill stands to be approved by the Senate. Once approved, however, it would put a dampener on deals made with ZTE Corp. and Huawei Technologies Co., Ltd., Chinese companies already reeling from the fallout of the costly trade dispute.
In addition, the bill also gives new, stronger powers to the Committee on Foreign Investment in the United States (CFIUS). It is a moved seen as a rein of sorts to control China's already embattled export interests to the US.
Financial Times said that the laws, according to the president, put in more powers to veto any trades that would allow a potential transfer of technologies. It was largely welcomed by the stock market, at first, but then, as the initial jubilation died down, the stocks closed at a plummeting value.
The new system in place would also give the CFIUS a wider berth to review other investments it previously had no power over. This includes even minority investments needed to power startups as well as real estate deals.
China should be in for a real tough time once the law gets passed. The US president made his intentions not secret, saying that the law should be enforced thoroughly at all times, especially when US intellectual property rights are in danger. This is in line with White House accusations that China is out to pirate key technologies in certain sectors.
That said, it remains to be seen what China will make of the new law. It was directed at making an already chaotic trade dispute much harder to navigate for China and seemingly tip the trade scales more in favor of the US government's protectionist policies.
