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US-China commission recommends business transparency

The U.S. China commission recommended that businesses be transparent about their Chinese operations as both companies and Congress face tough policy and regulatory hurdles.

The U.S.-China Economic and Security Review Commission, in its annual report to Congress, is warning that U.S. businesses are finding it harder to do business in China.

"It's an increasingly difficult business environment for American companies," Carolyn Bartholomew, chairman of the U.S.-China Commission board, said during the report's release. The U.S.-China commission is an independent agency of the U.S. government and its annual report assesses national security implications of the economic relationship between the U.S. and China.

Indeed, companies like Yahoo Inc. and LinkedIn have recently announced that they're pulling operations out of China due to increased regulatory crackdowns.

It's an increasingly difficult business environment for American companies.
Carolyn BartholomewChairman, U.S.-China Economic and Security Review Commission

Bartholomew said there are ongoing concerns related to Hong Kong's new national security law, the Chinese Communist Party's crackdown on businesses operating in the country, and issues with cross-border data transfer. Companies working in tech build products on the basis of free flow of information, something that is imperiled by China's government, she said.

Recommendations

As U.S. business operations in China face challenges, the U.S.-China commission offered 32 recommendations to both businesses operating in China and Congress to guide policy.

One of the U.S.-China commission's recommendations to Congress includes requesting a report from President Joe Biden's administration regarding data servicing operations such as cloud-based application providers owned by Chinese companies. The report should include whether the firms are operating in the U.S., what laws should apply to those services and whether cloud computing services are offered or provided to U.S. residents.

For businesses, the U.S.-China commission recommended transparency when it comes to Chinese operations, said Bob Borochoff, commissioner on the U.S.-China commission board. 

"Our recommendations are not designed to prevent American businesses from investing in Chinese businesses, or [prevent] American businesses from operating in China," he said during the report release. "But they are designed to give Americans an opportunity to know what they're investing in."

Congress is debating a bill to increase technology competition with China. The U.S. Innovation and Competition Act allots $190 billion to strengthen U.S. technology and research capabilities to compete with China, as well as $52 billion to bolster U.S.-based semiconductor production.

Also this week

  • The U.S. Senate confirmed big tech critic Jonathan Kanter as assistant attorney general for the U.S. Department of Justice's Antitrust Division. Biden announced Kanter's nomination for the position earlier this year. Kanter, an antitrust lawyer, is a partner The Kanter Law Group PLLC that advocates for federal and state enforcement of antitrust law. In response to Kanter's confirmation, Federal Trade Commission Chair Lina Khan said "The FTC and DOJ Antitrust Division are critical partners in vigorously enforcing the antitrust laws, and I look forward to our close collaboration as we work together to target unlawful mergers and monopolistic conduct and to promote open markets and economic opportunity."
  • Ohio Attorney General David Yost is suing Meta, Facebook's parent company, for misleading the public regarding how it controlled its algorithms and how its algorithms affected children. The lawsuit contends that Facebook violated federal securities laws from April 29 through Oct. 21, 2021, by not being transparent about the negative effects its products have on children. "Facebook said it was looking out for our children and weeding out online trolls, but in reality was creating misery and divisiveness for profit," Yost said in a release.
  • The U.S. House of Representatives passed Biden's Build Back Better Act, a $1.75 trillion plan that allots $500 billion to efforts combating climate change such as clean energy tax credits. It is one of the largest federal investments in clean energy. The Build Back Better Act must now go to the U.S. Senate, where it will be deliberated in the coming weeks.       

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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