U.S. government scrutiny of Chinese investment has been commonplace for almost as long as the Committee on Foreign Investment in the United States (CFIUS) has existed. During the Trump administration, CFIUS failed to approve approximately half of all Chinese deals it reviewed. During the Obama administration, however, close to 95% of reviewed Chinese deals were approved — though concerns regarding Chinese investment in the U.S. had become a largely bipartisan issue by the end of Obama’s second term, with Obama personally blocking two Chinese transactions.
Given this, Chinese investors who expect CFIUS scrutiny to abate under President Joe Biden could be in for a costly surprise. Government oversight of Chinese-led deals is expected to remain rigorous and could have a significant impact on transaction ROI.