Lawmakers: Restrict China Investment

Congress needs to legislate tougher controls on US investment in China because Wall Street is turning a blind eye to the threat to national security raised by US financial companies’ investment technologies that can be used against the United States and Taiwan, members of the House Select Committee on the Chinese Communist Party said Sept. 12.

“In short, we are financing our own destruction,” committee chairman Rep. Mike Gallagher (R- Wisc) warned at a hearing on the CCP’s threat to US financial stability.

The Administration’s recent executive order limiting some high-tech investment in China is a first step, “but it must not be the last,” Mr. Gallagher said. “It is up to Congress to ensure American money isn't financing the CCP's top tech ambitions, including AI, quantum computing, and semiconductors, but also biotechnologies, directed energy, hypersonics, advanced manufacturing, space technologies, and anything associated with the PRC's military-industrial complex.”

Ignoring Risks
Wall Street is ignoring the risks of investing in China even though the returns are relatively low, and many of those investments are tied up in US pension plans, he continued.
“The truth is American pensions, endowments, and retirement savings are not being protected, they are being swindled,” he said. “Fraud, fake accounting, and outright lies are endemic to the communist system. Taking on a genocidal, communist regime as a business partner is not a recipe for success. It is a recipe for systemic risk.”

Former Securities and Exchange Commission chair Jay Clayton told the committee that large US companies should be required to disclose their exposure to China so that the government can assess potential risks. He suggested Congress should consider a pilot program in which public US companies with market capitalizations over $50 billion or with China-based revenues or costs over $10 billion would disclosure their exposure to China.

Today, the committee will hold a roundtable discussion with experts on the CCP’s propaganda and censorship. Witnesses will discuss the history, strategy and tactics of the CCP’s propaganda and censorship.