Examining the U.S. Outbound Investment Security Program: main features, strategic rationale and future trajectories

Purpose The Outbound Investment Security Program (OISP) has recently become a new instrument for the US technology containment strategy towards China, potentially intensifying the high-tech rivalry between the two countries with profound implications for the global technological landscape. This study aims to analyse the key contents and attributes of OISP, investigate the underlying motivations driving its implementation and forecast its anticipated evolution. Design/methodology/approach This study examines the key provisions of the OISP based on the U.S. Treasury Department’s Final Rules. Moreover, through a cross-comparative analysis between OISP and other US policy instruments, the study highlights OISP’s distinctive role and positioning within Washington’s strategy to constrain China’s technological development. In addition, by conducting an inductive analysis of sources such as statements from government officials, congressional hearing records, official policy documents and think tank reports, this study identifies key perspectives and points of contention in the policymaking process, enhancing understanding of OISP’s strategic rationale and policy objectives. Findings OISP reflects Washington’s broader efforts in recent years to counter China’s advancement in critical technologies. By restricting outbound investment, this program aims to curtail funding channels for Chinese tech companies and prevent them from gaining indirect benefits or technology innovations through US capital infusion. These features signify that the OISP is a proactive policy instrument rather than merely responding to technology transfers retroactively, distinguishing it significantly from traditional US technology containment measures such as export control and foreign investment review. In the next four years, the Trump administration would likely strengthen OISP, emphasising improving operating mechanisms, reinforcing its legislative foundation and cooperating multilaterally with allies on outbound investment restrictions. Originality/value Existing searches focusing on OISP are relatively scarce in quantity, while most of them lack an in-depth analysis of its distinctions from other policy measures and strategic rationale. This study seeks to fill this search gap and address the current limitations in the field.