China Exposure Disclosure Mandate

House China hawks introduced legislation aimed at "ensuring transparency into the material and systemic risk posed by US investment in and reliance on China," requiring public companies to disclose extensive details of their exposure to the PRC.

Sponsored by House Select Committee on China Chairman John Moolenaar (R-Mich) and Rep. Blaine Luetkemeyer (R-Mo),  The PRC Risk Transparency Act will require public companies with "meaningful exposure' to China to disclose what percentage of their revenue, profit, capital investment and supply chain is tied to the PRC.

It also will require these companies to disclose their relationships with the Chinese Communist Party and with companies identified by the US government as national security threats or human rights violators.

The bill would require those companies to assess what a geopolitical conflict with China would mean for their business by mandating a market access loss scenario describing a situation where US-China trade falls by 80 percent due to Chinese military aggression, leading to mutual sanctions and asset seizures. It directs investment firms to disclose their holdings of and exposure to certain Chinese securities.

"Our Select Committee's investigations have shown that Wall Street and American companies are deeply entangled with China, so a military confrontation with the PRC would be devastating to those firms – and to American investors", said Mr. Moolenaar.

"All Americans have a right to understand that material risk. I am proud to support the PRC Risk Transparency Act to give investors and lawmakers the information they need to understand the systemic risks posed by investing capital in our foremost adversary.”