Recent China Bills 'Just the Start,' Select Committee Chair Says

The top lawmaker on the House Select Committee on China called on the U.S. to continue imposing strict export controls and investment restrictions against China, adding that those tools must be coupled with bolder investments in innovative American companies if the U.S. wants to “win” its technology competition with China.

Rep. John Moolenaar of Michigan, the committee’s top Republican, said the U.S. may need stronger guardrails to stop U.S. outbound investments in Chinese companies. He said Wall Street firms last year channeled $5.7 billion in American investments to 61 Chinese businesses that have ties to the country’s military or the government's alleged human rights abuses. The Chinese companies receiving those funds used the money to develop advanced fighter jets and nuclear weapons for the Chinese army, Moolenaar said, and have created the “technology used to perpetrate the ongoing genocide against the Uyghur people” in Xinjiang.

“We cannot continue to fund our own destruction,” he said during an event this week hosted by the Information Technology and Innovation Foundation. “We cannot provide our greatest adversary with the tools needed to kill our men and women in uniform. We cannot continue supplying the technology that will be used to drive our companies out of business and leave our citizens out on the street.”

Moolenaar said his office and the select committee have spearheaded multiple bills that could help highlight and prevent “troubling” U.S. investments in China. One bill, introduced in July, could require certain American public companies and investment firms to report how much business they do in China (see 2407260056). He also pointed to the Biosecure Act, passed by the House earlier this month, which could prevent certain U.S. transactions with biotechnology companies “of concern,” including certain Chinese firms.

“These pieces of legislation are, I hope, just the start,” Moolenaar said.

He pointed to the host of bipartisan recommendations the committee included in a December report on proposed policy actions against China, which suggested the U.S. adopt country-wide controls for a broader range of exported technologies, extend license requirements to subsidiaries of companies on the Entity List, expand the jurisdiction of the Committee on Foreign Investment in the U.S., and more (see 2312120050).

“If you know anything about Washington, you will know how rare that sort of bipartisanship is,” Moolenaar said.

He also said the U.S. needs to pair those measures with more federal support for the U.S. technology industry, saying “outbound capital and export controls are critical to our defensive strategy and are buying the time needed to rebuild our industrial base at home.”

Protecting U.S. companies and universities from intellectual property and research theft will protect a system that “encourages creativity and innovation,” he said.

“Export and outbound capital restrictions are a necessary condition for our victory over the [Chinese Communist Party]. And by combining these types of tools with investments in our own innovation, we can achieve victory.”

Other speakers at the ITIF event discussed a new report from the think tank assessing where and how China is becoming a global leader in advanced technology industries. Although the report said export controls can be a useful policy tool, “it appears that the hope of export controls being the magic ingredient for restraining China is vastly overstated.”

It pointed to a case study in which past U.S. export controls failed to stymie China’s satellite technology industry, which now matches or exceeds U.S. capabilities (see 2301270063). It warned about a similar outcome for the U.S. semiconductor industry.

Emily Jin, a China analyst with economic intelligence firm Datenna, said Beijing is “determined to overcome its technological shortcomings,” particularly within the chip industry, where it depends on foreign expertise and parts. Although export controls by the U.S., Japan and the Netherlands “have exposed China's vulnerability in this critical sector,” she said the country is increasingly pouring resources into making its semiconductor sector self-reliant.

“Despite these obstacles,” Jin said, “China continues to push for innovation to overcome these barriers.”

The ITIF report noted that export controls only work when one side has a technology the other side doesn’t, warning that Chinese technological progress could one day render the controls “ineffective.”

“Who knows? Within a few decades, we could be in a world where it is China that is imposing export controls on the United States,” the report said.