Senator Seeks to Limit Possible Chinese Investment in Ukraine

If NATO considers adding Ukraine to the alliance, it should require the country to limit potential investment from China to address security concerns, according to a new report by Sen. Jim Risch, R-Idaho, the ranking member of the Senate Foreign Relations Committee.

“For example, NATO must make clear that Chinese ownership of Ukraine’s ports and communications systems would make integrating Ukraine into NATO exponentially more difficult both politically and technically,” the report says. “In addition, NATO should draw clear lines about Chinese investment in Ukrainian defense companies and capacities.”

During its Washington summit last week, NATO declared that Ukraine is on an “irreversible path” to NATO membership, though it offered no timeline for admission. “Ukraine’s future is in NATO,” the alliance said.

Risch’s 41-page report, “Next Steps to Defend the Transatlantic Alliance from Chinese Aggression,” suggests China will try to invest heavily in Ukraine when the war with Russia ends. Such investments would not only spread corruption and undermine the rule of law in Ukraine but give China an opportunity to spy on Ukrainian and foreign-supplied military capabilities and steal the intellectual property of Ukrainian companies it does not acquire, the senator contends.

The report raises a host of other concerns, including the absence of NATO screening standards for incoming and outgoing investment in defense-critical sectors. This "lack of direction" on Chinese investment has led to inconsistent policies toward Nexperia, a Dutch semiconductor company that is part-owned by Chinese state-owned company Wingtech, the document says. For example, while the U.K. forced Nexperia to sell a recently purchased semiconductor plant in Wales (see 2211170041), the Netherlands allowed Nexperia to buy semiconductor startup Nowi.

The report also asserts that NATO "has not fully exercised its ability to keep its ports out of foreign hands." It says that Chinese ownership stakes in European ports could allow China to spy on nearby naval bases or impede U.S. military access to those ports. The report says the use of the China-developed LOGINK shipping logistics software in European ports is also a concern because it could allow China to spy on the U.S. military (see 2209200051).

The report also urges NATO to consider setting standards for exporting military and dual-use items to China. “While an EU arms embargo on China has largely made the question moot, some NATO members are not EU members and are not bound by that standard,” the report says. “More concerning, media reporting indicates that despite its embargo, the EU continues to issue export licenses for military items going to China.”

Risch posted the report on X on July 15. NATO didn't immediately respond to a request for comment.