Congressman Patrick McHenry (R-NC), chairman of the House Financial Services Committee, recently said in a hearing that the Committee is committed to addressing the economic threats posed by China by doubling down on American values to outcompete China.
"The actions of the Chinese Communist Party last week serve as a clarifying moment. China is not an ally or a strategic partner. They are our competitor and pose the single greatest threat to America’s global standing," McHenry said. "This Committee is holding our first hearing of the Congress on combatting the economic threat from China. This is a priority for the Congress and our Committee’s jurisdiction is central to this discussion. The economic strength and vibrancy produced by our system of free market capitalism directly fuels America’s military strength and cultural power. Whether it’s through sanctions, export financing, international financial institutions or our capital markets—all of which fall under this Committee’s purview—we will lead this Congress’ economic agenda in response to China. This agenda must maintain trust and confidence that our system will continue to grow capital resources, industrial capabilities and new technologies."
McHenry said during his opening remarks in the Committee's first China-focused hearing, which was titled "Combatting the Economic Threat from China," that there are clear differences between the U.S. and China, and the U.S. needs to lean into its values, including decentralization, openness and embracing freedom of speech, according to a press release.
“These are the American values that produce the economic strength that has led to the highest living standards and greatest military power in human history," McHenry said.
He called on lawmakers to ensure the U.S. is not becoming "more like the Chinese Communist Party" and emphasized the need to "carefully evaluate" all policy proposals to ensure they don't "jeopardize America’s ability to innovate, grow and allocate capital" or "cause allies to question our commitment to free people and free markets."
McHenry said the U.S. and its allies need to "prevent China from rewriting the international rules of the road" by barring China from exerting "a malign influence in the international financial institutions," failing to be transparent about debt and disregarding multilateral standards. “Finally, the United States must lead by example. Our national security requires the U.S. financial sector to remain open, vibrant and resilient—even as we prevent Chinese companies from advancing Beijing’s strategic ambitions. If we stick to these principles—and reinforce American values rather than undermine them—we can outcompete China on the global stage," McHenry said in closing.
At the hearing, lawmakers considered sanctions, investment policies and other actions that the U.S. can take to counter China's "state-led, mercantilist economic policies" and "assertive and aggressive foreign policy." The Committee considered several legislative proposals aimed at countering China's malign influence, including H.R. 760, the Chinese Military and Surveillance Company Sanctions Act, proposed by Rep. Andy Barr (R-KY), which would impose sanctions on companies the Treasury Department has listed as Chinese Military-Industrial Complex Companies. H.R. 804 would ban U.S. money service businesses from engaging in transactions that involve China’s central bank digital currency. Another bill discussed was the draft of the China Financial Threat Mitigation Act, which stipulates that the Treasury Secretary would report to Congress regarding global economic risks coming from China. The Committee also discussed the draft of the Preventing the Financing of Illegal Synthetic Drugs Act, which would involve an investigation by the comptroller general of the United States into illicit financing connected to the trafficking of drugs such as fentanyl.
Witnesses who testified at the hearing included Mr. Clete Willems, a partner with Akin Gump Strass Hauer & Feld; Mr. Tom Feddo, founder of The Rubicon Advisors LLC; Mr. Eric Lorber, a former senior advisor to the under secretary for terrorism and financial intelligence in the Department of the Treasury; Mr. Rich Ashooh, the corporate vice president of global trade and government affairs at the Lam Research Corporation; and Mr. Peter Harrell, the former senior director for international economics and competitiveness at the National Security Council and National Economic Council.
