The House GOP’s largest caucus is advancing a bill that includes new, stringent restrictions on outbound investment in sensitive tech sectors linked to China’s military, National Review has learned.
The Republican Study Committee, a group of more than 150 conservative lawmakers, included this proposal in a broader China-focused legislative package that it is unveiling today.
The bill also bans former U.S. officials from lobbying for China and other U.S. adversaries, implements new restrictions on the purchase of farmland by individuals linked to the Chinese Communist Party, and allocates new funds to the Treasury’s sanctions-enforcement office.
But the investment restrictions are the buzziest parts of the new legislation, which is set to be introduced this afternoon.
“Helping China develop military technology to use against the United States is a self-defeating national-security liability that must be stopped,” Bryan Burack, a senior policy adviser at the Heritage Foundation told National Review.
A recent report issued by the House Select Committee on the Chinese Communist Party found that U.S. venture-capital firms have funneled billions of dollars to companies involved in China’s military buildup and human-rights abuses.
The White House has taken some tentative steps toward addressing these investments, with President Biden signing an executive order last year that requires venture-capital and private-equity investors to inform the U.S. government about their investments in sensitive industries, including semiconductors, quantum electronics, and AI.
But China hawks on both sides of the aisle worry that this executive order’s list of sectors is too narrow and the notification system not far-reaching enough.
The RSC bill would build on a bipartisan proposal introduced last year by House Foreign Affairs Committee chairman Michael McCaul and the panel’s top Democrat, Gregory Meeks, to codify and expand the Biden order.
The RSC proposal goes further by adding biotechnology and satellites to the list of sectors covered by outbound-investment restrictions. It also includes a version of a bill by Representative Andy Barr, which would push the Treasury Department to impose full-blocking sanctions on Chinese-military-linked firms that have already been blacklisted by the government. The RSC version of the bill would make it tougher for the president to waive the sanctions and, in the event that a waiver is invoked, still prohibit Americans from investing in the blacklisted companies.
Yet House GOP leaders have been divided over the possibility of implementing tough China-investment curbs, as House Financial Services Committee chairman Patrick McHenry has stymied such efforts.
McHenry, who is retiring at the end of his term, has quickly made himself one of the lone voices arguing against these broad restrictions against U.S. investment in Chinese-military-linked firms. Groups such as the Heritage Foundation, the America First Police Institute, and American Compass knocked McHenry’s stance in a letter last year urging congressional leaders to insert the Senate provision in the annual defense-policy bill.
They criticized McHenry for arguing that more Americans should invest in and sit on the boards of Chinese firms linked to Beijing’s military-civil fusion system: “It is both unwise and unconscionable to finance the capabilities of an adversary hostile to American interests and values.”
The RSC legislation, called the Countering Communist China Act, shows that House conservatives are taking the side of the China hawks, Burack said.
“The RSC is Congress’s largest caucus, and its strong stand is the clearest sign yet that conservatives want to stop Wall Street from funding our own destruction.”
