Chinese companies are pulling back from investing in U.S. tech companies as authorities in Washington step up their scrutiny of foreign investment due to security concerns. The pressure is sending Chinese firms hunting for deals in Europe, Israel and Southeast Asia, where Beijing is encouraging stronger economic ties.
The investment slowdown is being driven by the Committee on Foreign Investment in the United States, the interagency panel charged with making sure foreign acquisitions don’t hurt U.S. national security. CFIUS has been broadening the scope of its reviews of corporate deals to include data that could be used in harmful ways if it fell into the wrong hands. U.S. authorities’ concern over data potentially finding its way to the Chinese government, including information gleaned from mobile advertising, has killed some deals and caused some investors to rethink their strategy in the U.S.