Senator Unveils 3 Bills to Curb US Investment in China

Sen. Rick Scott, R-Fla., introduced a package of three bills aimed at reducing U.S. investment in China. The legislation would “ensure that no American dollars will end up in the hands of a country actively working against America in an attempt to undermine our national security,” Scott said.

One bill, the Safeguarding U.S. Financial Leadership Against Communist China Act, would prohibit index and mutual funds from investing in Chinese companies. The funds would have a year to divest any existing holdings in Chinese firms. The legislation cites a recent report by the House Select Committee on China that says U.S. financial institutions facilitated the investment of $6.5 billion last year in 63 Chinese companies that the U.S. government has “blacklisted or otherwise red-flagged” for advancing China’s military capabilities or supporting its human rights abuses (see 2404180049).

A second bill, the Stop Funding the CCP Through A-Shares Act, would bar U.S. investors from owning certain securities on Chinese Communist Party-controlled stock exchanges.

A third bill, the Timely Rejection of Adversarial and Dangerous Enterprises and Securing American Financial Exchanges (TRADE SAFE) Act, would prevent companies on U.S. government “blacklists” from listing their securities on U.S. stock exchanges. The measure is co-sponsored by Sens. Marsha Blackburn, R-Tenn, and Marco Rubio, R-Fla.

All three bills were referred to the Senate Banking Committee.

The bills were introduced as the Treasury Department works on regulations to prohibit certain U.S. outbound investment in three Chinese technology sectors, although those proposed regulations wouldn't restrict investments in publicly traded securities and index funds (see 2406210034).