UCSD - University of California - San Diego

09/16/2026 | Press release | Distributed by Public on 09/16/2026 16:59

UC San Diego Report Proposes ‘Selective Openness’ to Chinese Investment in U.S.

Published Date

September 16, 2026

Article Content

The United States should move beyond its current security-first approach to Chinese investment and become both more selective and more open, according to a new report from the 21st Century China Center at the University of California San Diego School of Global Policy and Strategy.

The proposed strategiy would welcome investments that could strengthen U.S. industrial capacity and competitiveness, while blocking or placing safeguards on those that pose national security risks.

The report, "Selective Openness: A Framework for Chinese Direct Investment in the United States," was produced by a working group organized by the 21st Century China Center under the auspices of the Task Force on U.S.-China Policy. The working group brought together 18 experts from academia, industry and the policy community and was chaired by Peter Cowhey, dean emeritus of the UC San Diego School of Global Policy and Strategy.

"China has become a leading source of industrial and technological capability in areas ranging from batteries and clean energy to robotics and parts of the life sciences," said Cowhey. "Simply keeping Chinese investment out can carry real costs for American competitiveness. Selective openness asks a different question: Where can carefully structured investment strengthen U.S. production, jobs, supply chains and technological capabilities while still protecting national security?"

A Different Approach to Chinese Investment

The report recommends modernizing the U.S. investment review system to weigh the potential economic and strategic benefits of individual investments alongside security risks. It proposes strengthening the Committee on Foreign Investment in the United States (CFIUS), improving transparency and predictability, and using enforceable conditions to distinguish among investments that should be prohibited, permitted with safeguards, or encouraged because they advance U.S. interests.

"National security risks from some Chinese investments are real and must be taken seriously," said Susan Shirk, co-chair of the Task Force on U.S.-China Policy and founding director of the 21st Century China Center. "But security should not mean closing the door to every investment. The United States needs the capacity to distinguish between investments that create unacceptable risks and those that can bring capital and technology, enhance manufacturing capacity, and promote jobs to the United States."

"This report addresses one of the most difficult questions in U.S.-China economic relations: how to remain open enough to benefit from economic exchange while protecting legitimate national security interests," said Molly Roberts, director of the 21st Century China Center at UC San Diego. "It is exactly the kind of problem where rigorous research and dialogue across economics, technology, national security and China expertise can contribute to better policy."

Putting 'Selective Openness' to the Test

The main report is accompanied by five stress tests examining how the framework could work in practice across:

  • corporate governance,
  • cybersecurity and data protection,
  • clean energy,
  • life sciences, and
  • humanoid robotics.

Together, they demonstrate how selective openness could be applied to different industries and risks through case-by-case assessment and enforceable safeguards.

The working group met seven times from October 2025 through June 2026 to develop and refine its recommendations, with smaller teams conducting detailed work on the sectoral and cross-cutting studies.

The report comes amid a broader shift in the global economy, as China has become a world leader in a growing number of advanced industries. Cowhey and Meg Rithmire of Harvard University, both members of the working group, recently made the case in Foreign Affairs that carefully structured Chinese investment could bring technology and production know-how to the United States while building domestic capacity. That shift, the authors argue, means that simply keeping Chinese investment out can carry strategic and economic costs of its own.

About the 21st Century China Center

The mission of the 21st Century China Center is to produce and disseminate impactful evidence-based research about China, and to enhance U.S.-China mutual understanding by advancing scholarly collaboration, convening policy discussions, and actively communicating with policymakers and the general public in both countries.

Learn more on the center's website.

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