Legislation to curb US investment in China

26/9/2024 6:12

        The Republican chair of
        the House of Representatives' select committee on China said on
        Wednesday that the panel's top priority is legislation
        restricting U.S. investment in China to stop investors from
        "funding our own demise."
        
        "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,'"
        Representative John Moolenaar said, speaking on a panel at the
        American Enterprise Institute.
        
        "That's probably our number one priority right now," he
        added. "We are actually funding our demise."
        
        A committee spokesperson confirmed that "genocide" referred
        to China's alleged treatment of its Uighur minority in Xinjiang.
        The Chinese Embassy in Washington did not immediately respond to
        a request for comment.
        
        The remarks signal Congress could revive long-sought
        restrictions on U.S. investment in China, which have faced a
        rocky path in Washington.
        
        A measure restricting outbound investment was stripped out
        of the Chips Act before it was signed into law in 2022. In
        August 2023, Democratic President Joe Biden issued an executive
        order giving the Treasury Department the authority to bar or
        restrict U.S. investments in Chinese entities in three sectors:
        semiconductors and microelectronics, quantum information
        technologies and certain artificial intelligence systems.
        
        But rules implementing that order, proposed in July, have
        yet to be finalized. The Treasury did not respond to a request
        for comment on the status of the proposed rules.
        
        Moolenaar said House Speaker Mike Johnson "would like to
        have something before the end of the year." Johnson's office did
        not respond to a request for comment.
        
        The United States and other Western countries have imposed
        sanctions on Chinese officials for human rights abuses in
        Xinjiang, which the United States has said have amounted to
        genocide.
        
        China rejects allegations of abuses, including use of forced
        labor in Xinjiang, and describes the camps it has set up there
        as vocational training centers for Uighur Muslims that help
        combat religious extremism.
        
        Moolenaar also flagged specific Chinese companies that he
        said pose national security threats including Chinese crane
        maker Shanghai Zhenhua Heavy Industry Co (ZPMC), which was
        featured in a recent committee report.
        
        U.S.-bound cranes made by ZPMC, which accounts for 80
        percent of ship-to-shore cranes in operation at U.S. ports,
        contain unauthorized cellular modems, creating a "significant
        backdoor security vulnerability," he said.
        
        "ZPMC could disrupt U.S. maritime equipment and technology
        at the request of the Chinese government, including during a
        conflict over Taiwan," he said, referring to the democratically
        governed island that China claims. The company, he said, is a
        "loaded gun".
        
        Neither ZPMC nor the Chinese embassy in Washington
        immediately responded to requests for comment on that issue, but
        ZPMC has in the past said it does not pose a cyber security
        threat.