In May, I introduced legislation to temporarily restrict acquisitions of U.S. companies and assets by the People’s Republic of China (H.R. 6706). The legislation was largely in response to discussions about so-called predatory investments by the Chinese government and China’s propensity to act most aggressively when its enemies are most vulnerable. As soon as tomorrow, yet another American company with sensitive intellectual property may be purchased by individuals with troubling and opaque connections to Chinese officials and even former officials of the Chinese Communist Party, or CCP.
This is just one example of a disturbing trend that is happening across this nation as companies and Americans continue to struggle amid the COVID-19 pandemic, and a key example for why Congress must pass H.R. 6706.
In this time of unprecedented financial distress, particularly in the aviation sector, not all companies can survive. Some turn to bankruptcy proceedings or buyers who are interested in distressed and discounted assets — allowing the buyer at hand to purchase all assets and IP the company owns. While this may seem harmless at face value, it presents an opportunity for buyers with ulterior motives to step in and acquire sensitive IP for pennies on the dollar.