Bill Overview
Title: Protecting American Capital Act of 2022
Description: This bill requires the Department of the Treasury to annually report to Congress on portfolio investments made by U.S. persons in China. The report must include the U.S. persons making the investments, including state pension funds and those making more than 2% of the total annual investments; and the Chinese entities receiving the investments, including Chinese entities subject to U.S. sanctions and Chinese entities receiving more than $100 million. The initial report must include investment information back to January 1, 2008.
Sponsors: Sen. Scott, Rick [R-FL]
Target Audience
Population: People involved in U.S. investments in China
Estimated Size: 1500000
- The bill focuses on portfolio investments made by U.S. persons in China. This includes individual investors, pension funds, and investment firms based in the U.S.
- The reference to state pension funds suggests that beneficiaries of these funds, such as retired public employees in the U.S., could be affected due to changes in investment strategies.
- The bill impacts U.S. persons involved in substantial (more than 2% of annual investments) financial dealings with China, requiring them to be reported.
- The coverage period of investment data dating back to January 1, 2008, implies long-term investors and financial entities will be analyzed.
Reasoning
- The policy primarily targets investors and financial entities with substantial investments in China. This includes individual investors, pension funds, and investment firms, many of whom have a considerable economic footprint.
- Based on the policy description, a relatively small and specific part of the population is directly affected: those with investments connected to Chinese entities. This means a specialized but potentially influential group in the financial sector is considered.
- Considering the budgetary constraints and the potential size of the population involved, the policy is likely focused on monitoring and reporting rather than broad regulatory changes, meaning immediate impact might be limited.
- The impact of the policy could be higher on larger entities and individuals who are actively managing significant portfolios involving China, potentially affecting their investment strategies and operations due to new reporting requirements.
- We include perspectives from different segments of this population, including those not directly managing investments but indirectly affected by pension funds, to gauge the policy's broader implications.
Simulated Interviews
Investment Banker (New York, NY)
Age: 47 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The new reporting requirements might increase administrative workload, but transparency is crucial for national interests.
- This policy could deter some investment flows, potentially impacting returns.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Retired Teacher (Baton Rouge, LA)
Age: 62 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I trust the pension fund managers to handle these changes without affecting my benefits.
- However, increased scrutiny is not necessarily a bad thing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Tech Entrepreneur (San Francisco, CA)
Age: 35 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy could complicate investing forms but it's important to ensure financial flows are well-documented.
- I'm concerned it might limit future investment opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Financial Analyst (Portland, OR)
Age: 59 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- The policy emphasizes the need for greater risk assessment on China-related investments.
- This will increase demand for analytical services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
State Pension Fund Manager (Austin, TX)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This will affect our reporting processes but there's no immediate financial threat to the fund.
- Long-term issues will depend on geopolitical relations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Graduate Student (Chicago, IL)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I think this policy is reasonable given the political tensions.
- It raises important questions about economic dependencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
CEO of Investment Firm (Miami, FL)
Age: 54 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- Increased reporting might narrow certain investment channels but offers more security.
- Adjusting to new regulatory environments has always been part of the game.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Financial Advisor (Phoenix, AZ)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- My role may require explaining these new reporting norms to clients but shouldn't affect major planning.
- It's an interesting shift towards more transparent investing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Retired Nurse (Salt Lake City, UT)
Age: 66 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I've seen policies change investment strategies; I just hope my benefits remain secure.
- The financial advisors haven't expressed concerns.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Public Sector Employee (Sacramento, CA)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- Our union is keeping an eye on changes but hasn't indicated any major shifts.
- This could mean more scrutiny over pension investments, which might be a good thing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $20000000 (Low: $15000000, High: $30000000)
Year 2: $10000000 (Low: $8000000, High: $15000000)
Year 3: $10000000 (Low: $8000000, High: $15000000)
Year 5: $10000000 (Low: $8000000, High: $15000000)
Year 10: $10000000 (Low: $8000000, High: $15000000)
Year 100: $10000000 (Low: $7000000, High: $15000000)
Key Considerations
- Coordination with financial institutions for accurate data reporting could pose logistical challenges.
- The cost of technology and data systems upgrades may vary depending on existing capabilities.
- The geopolitical implications of scrutinizing investments in Chinese entities could have economic repercussions both domestically and internationally.