Stock futures, which had been lower because of fears that Trump might institute Chinese investment bans and escalate a trade war, ticked up after news that his plan is less restrictive.
U.S. officials have highlighted Beijing's "Made in China 2025" industrial development plan as a source of concern, since they say it is a map for dominating significant high-tech industries from space to telecommunications, robotics, and electric cars. The United States previous year posted a $552 billion trade deficit with the rest of the world - $336 billion with China alone. In response, China is prepared the same day to slap tariffs on billions in USA exports, including soybeans - a direct threat to Trump supporters in America's heartland.
"We don't see any problem ... we always follow worldwide rules and the laws of the investment destination countries", Xiao told reporters on the sidelines of a conference on Belt and Road Initiative in Hong Kong in reply to a question over possible stricter screening of Chinese investments in the US.
In March, Trump directed Mnuchin to consider restrictions that would address concerns about Chinese investment "in industries or technologies deemed important to the United States".
White House officials say that in addition to the decision to protect USA technology through CFIUS, the president has instructed the Commerce Department to "assess the current export regime" to determine if rules about sharing important technologies with other countries. should be tightened. That announcement said that controls would be announced by June 30 and would "be implemented shortly thereafter".
"#China is strategically buying up USA companies specialising in cutting-edge technology".
Those reports triggered a sell-off in tech stocks.
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The president, he said, has led on the issue of foreign competitors, principally from China, which is aggressively acquiring sensitive United States technologies.
Trump, during a meeting with lawmakers, pushed back on recent reports that the US was preparing the investment restrictions and suggested the administration could do it through the foreign investment reviews under the Committee on Foreign Investment in the United States.
"At the end of the day, all the president's advisers were 100 per cent unanimous when we sat down with the president", Mnuchin said. The measures passed with strong bipartisan support in both chambers.On Tuesday, the House bill was approved 400 to 2.
It appears that this plan has been abandoned in favour of an expanded role for CFIUS.
"China will closely monitor the legislation process and evaluate its potential impact on Chinese companies", Chinese commerce ministry spokesman Gao Feng told reporters in a regular briefing in Beijing.
CFIUS has already been more aggressive under Trump, especially on China.
With a value of roughly $14 trillion, the Chinese economy is the second largest in the world to the USA economy, but is growing at a much faster pace, according to the International Monetary Fund.
Chinese investment in the United States has declined dramatically amid heightened regulatory scrutiny. Rhodium Group estimates Chinese entities invested $29.7 billion in USA companies in 2017.