China Hawks Prod White House on Outbound Investment Executive Order

Rep. Mike Gallagher (R-WI) and Rep. Raja Krishnamoorthi (D-IL), Chairman and Ranking Member of the House Select Committee on the Strategic Competition Between the United States and Chinese Communist Party, sent a letter to Janet Yellen, Secretary of the Treasury, with recommendations for the implementation of the Biden Administration's August Executive Order on outbound American investment in China.

The recommendations are:

• Treasury should implement the E.O. urgently
• Treasury should adopt a broad definition of covered technology sectors that reflects the CCP’s expansive concept of national security
• Treasury should bolster coordination with our allies and partners as it moves forward with the implementation of this E.O.
• Congress should consider passive flows of capital as well, like mutual funds, exchange-traded funds, and index funds – and the administration should support such efforts

In part, the lawmakers write, “We also should not allow American capital to enable the CCP’s techno-totalitarian surveillance state and genocide and forced labor in the Xinjiang Uyghur Autonomous Region (XUAR).”

Click HERE to view a copy of the letter, excerpts below:

[With] “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern” Executive Order (E.O. 14105) issued on August 9, 2023. President Biden has taken a critical and unprecedented first step on the vital issue of outbound investment into the People’s Republic of China (PRC).

First, we recommend that the E.O. be implemented urgently.        

Second, we recommend that Treasury adopts a broad definition of covered technology sectors that reflects the CCP’s expansive concept of national security.  

American investment in advanced technology has been consistently co-opted by the PLA, and we should expect that the CCP will seek to evade restrictions that are narrowly defined. While avoiding unnecessary restrictions on investment is important in principle, we should be under no illusion that a narrowly scoped E.O. will adequately protect our national security interests.  

We therefore encourage a broad definition of the three sectors of national security technologies and products identified in the E.O.—semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.

As well as “ encourage Treasury to pursue notification requirements for all subcategories of the three technology sectors that are not subject to prohibitions.”