Federal & State News—February 2023

FEDERAL NEWS

It Was The Spy Balloon, Wasn’t It? 

No, not really.  But the geopolitical dynamic between China and the U.S. is morphing before our very eyes, with impacts on the countries’ economic ties.

Work has been underway by the Biden Administration to restrict US firms from investing in Chinese-based advanced manufacturing operations.  And the U.S. Treasury now is poised to issue new regulations that limit the “how” and “what” of American capital used to finance businesses in China.

This move by the Administration, intended to short circuit a similar movement in the Congress, will restrict hedge funds, private equity firms, and investment banks from making investments in certain “adversarial” countries, now including China, in areas that could have military or surveillance applications, like quantum computing, advanced semiconductors, and A.I. capabilities.  And such firms in the U.S. would be required to report more information to the government about their planned investments in those countries.

Although the federal government already restricts companies from purchasing certain goods from Chinese firms (check out the fine print in federally funded grant agreements that prohibit buying from China-based Huawei), this would be the first move to limit the flow of money from the United States to China (i.e., outbound investment screening).

By way of relative scale, U.S. companies expended approximately $11 billion during 2022 in buying or investing in Chinese companies.

STATE NEWS

JobsOhio Finalizes $237 million In Support To Honda And LG Energy Solutions
This week, grant agreements were executed for $4.2B in development projects to occur in Fayette County and across Honda’s existing footprint in Ohio, all focused on electric vehicle production.

Wet ink has been signed to 30-year contracts for:

• $140MM, along with $10MM in workforce grants, for the Honda / LG joint electric vehicle battery production facility in Fayette County (2,200 new jobs); and,
• $87MM to retool Honda’s three existing plants in Anna, East Liberty and Marysville to manufacture electric vehicles (327 new jobs).