The chair of the Republican-led House select committee on China emphasized on Wednesday that the panel’s foremost objective is to legislate restrictions on U.S. investments in China, aimed at preventing American funds from inadvertently supporting adversarial activities.
Outbound Investment Regime Needed
Representative John Moolenaar stated, “We have to have an outbound investment regime that basically says ‘No investment in these businesses that are on some kind of a list,’ that says ‘We shouldn’t be helping the Chinese military, we shouldn’t be supporting genocide.’” He further remarked, “That’s probably our number one priority right now. We are actually funding our demise.”
A spokesperson for the committee clarified that the term “genocide” refers to China’s alleged treatment of its Uyghur minority in Xinjiang.
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China Responds to U.S. Criticism
In response, the Chinese Embassy in Washington criticized the U.S. for “overstretching the concept of national security and abusing state power to go after Chinese products and companies.” The embassy reaffirmed China’s commitment to safeguarding the legitimate rights of Chinese businesses.
Moolenaar’s statements indicate a potential revival of efforts to implement restrictions on U.S. investments in China, which have faced numerous challenges in Congress.
Legislative Background
Previously, a provision to limit outbound investment was removed from the Chips Act before its 2022 enactment. However, in August 2023, President Joe Biden signed an executive order empowering the Treasury Department to prohibit or restrict U.S. investments in specific Chinese sectors, including semiconductors and artificial intelligence.
While rules to implement this order were proposed in July, they have not yet been finalized, and the Treasury Department did not comment on their status.
Human Rights Sanctions Against China
The U.S. and its allies have imposed sanctions on Chinese officials over human rights abuses in Xinjiang, which the U.S. has characterized as genocide. China has denied these allegations, asserting that the facilities in question are vocational training centers aimed at curbing religious extremism.
Identifying National Security Threats
Moolenaar also highlighted certain Chinese companies that he views as threats to national security. He specifically mentioned Shanghai Zhenhua Heavy Industry Co (ZPMC), a crane manufacturer that was noted in a recent committee report.
He warned that U.S.-bound cranes from ZPMC, which supply 80 percent of the ship-to-shore cranes at U.S. ports, contain unauthorized cellular modems, posing a “significant backdoor security vulnerability.” Moolenaar stressed, “ZPMC could disrupt U.S. maritime equipment and technology at the request of the Chinese government, including during a conflict over Taiwan.” He described the company as a “loaded gun.”
(INCLUDES INNPUTS FROM ONLINE SOURCES)
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