When China’s Fosun Group bought Wright USA in 2015, almost no one in Washington noticed. The insurer looked niche and low-risk. Only later did officials realise that Wright USA specialised in policies for CIA and FBI personnel—meaning it held personal and legal data on officers whose identities the U.S. government works hard to shield.
Reporting from Insurance Business Magazine and legal summaries later revealed just how sensitive the insurer’s files were: names, employment details and liability histories of federal intelligence and law-enforcement officers.
The situation escalated further when investigations cited by Business Today showed the acquisition had been backed by a US$1.2 billion loan from four Chinese state-owned banks routed through the Cayman Islands. What seemed like an obscure transaction suddenly looked like a data-exposure risk financed through an opaque offshore structure.
U.S. officials eventually forced a reversal of the sale, but the shockwaves from the oversight failure lasted longer than the deal itself.
The Wright USA episode crystallised a problem the U.S. hadn’t fully grasped: national security vulnerabilities don’t just sit in ports, telecom towers or semiconductor fabs—they can sit inside an insurance company’s database. And foreign capital, especially when channelled through layered offshore entities, can quietly gain access to sensitive information before regulators even know what has happened.
The case helped spur the 2018 expansion of CFIUS powers, which for the first time placed data-rich industries such as insurance firmly within national-security review.
This wasn’t happening in isolation. China’s overseas investment footprint had already grown dramatically. As Business Today noted, Chinese outbound investment since 2000 had reached roughly US$2.1 trillion, often moving through complex financing routes involving state-linked lenders. The Wright USA deal became a symbol of the broader challenge: separating commercial intent from the strategic opportunities that such investments can create.
India is now facing a similar debate—one driven less by a single catalytic incident and more by a steady accumulation of strategic caution. After COVID-19 and the sharp downturn in India-China relations, New Delhi issued Press Note 3 of 2020, requiring all Chinese investments to obtain government approval. The move effectively shut down the automatic route for Chinese capital. Today, China’s total FDI stock in India stands at just US$2.5 billion, a minuscule 0.3% of India’s total FDI—remarkably small for a country with nearly US$3 trillion in global outward investment.
But, just as in Washington after 2015, the conversation in India is shifting. The Economic Survey 2023–24 was the first major policy document to suggest rethinking the hard line introduced in 2020. NITI Aayog went further, proposing automatic approval for Chinese investments up to a 24% equity threshold.
Proponents argue that Chinese capital and scale know-how could accelerate India’s ambitions in electric vehicles, battery manufacturing, and chip assembly—sectors where Chinese firms have unmatched operational experience.
Yet India’s dilemma mirrors the American one: some of the sectors where India most needs investment—solar modules, APIs, electronics hardware, advanced batteries—are the very sectors where Chinese dominance already creates strategic dependency. Opening them to Chinese investment risks embedding vulnerabilities deeper into critical supply chains. And because many of these industries are simultaneously offering production-linked incentives, allowing Chinese firms to participate could become politically combustible.
What the U.S. discovered through the Wright USA case has clear relevance for India’s next steps. Ownership, even minority stakes, can create pathways to data access, supply-chain influence or operational leverage. India will need sector-specific filters, not broad assumptions, to distinguish harmless capital from strategically consequential investments.
Both countries are learning the same lesson: in an era where capital can also be a vector of influence, the real challenge isn’t shutting the door or opening it—it’s knowing precisely when, where and how to do either without compromising long-term security.
In a career spanning three decades and counting, Ramananda (Ram to his friends) has been the foreign editor of The Telegraph, Outlook Magazine and the New Indian Express. He helped set up rediff.com’s editorial operations in San Jose and New York, helmed sify.com, and was the founder editor of India.com.
His work has featured in national and international publications like the Al Jazeera Centre for Studies, Global Times and Ashahi Shimbun. But his one constant over all these years, he says, has been the attempt to understand rising India’s place in the world.
He can rustle up a mean salad, his oil-less pepper chicken is to die for, and all it takes is some beer and rhythm and blues to rock his soul.
Talk to him about foreign and strategic affairs, media, South Asia, China, and of course India.
