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Evaluating the National Security Risk of Chinese Investment

Recorded on October 15, 2007

The decision by Bain Capital to include China's Huawei Technologies - a company that grew out of the People's Liberation Army (PLA) General Staff Department's Information Engineering Academy in 1988 and the PLA has been its political patron, customer and R&D partner ever since - in a buyout of 3Com Corporation has drawn headlines and the intense scrutiny of American lawmakers.  In light of several Chinese cyber attacks on the Pentagon and other US government agencies over the past year and fact that the US Department of Defense is among 3Com's clients for technology designed to prevent just such attacks, members have expressed alarm at the implications for national security.  How should the U.S. handle telecommunications and Information technology investments from Chinese companies?  Do they pose unique threats to American national security?  What is the threat, and is it mitigated by the details of the particular investment?  Can controls be put in place to eliminate the risks?  The Committee on Foreign Investment in the United States (CFIUS), which is designed specifically to evaluate foreign buyouts, was strengthened this year with an eye to decisively answering these questions.  Is CFIUS up to its task of balancing the need for security with historical American openness to foreign investment?  Please, join us as we discuss the national security risk of Chinese investment.