The House Select Committee on the CCP issued a stern warning during the July 13 hearing in Washington, telling U.S. companies that engaging in business in China carries a steep price and an unstated partnership with the Chinese Communist Party (CCP).

"It’s time for American corporate executives to take off the golden blindfolds and stare with clear eyes at the growing peril of doing business in China," Committee Chairman Rep. Mike Gallagher (R-WI) said at the hearing.

The committee called Desmond Shum, a Shanghai native and author of "Red Roulette: An Insider's Story of Wealth, Power, Corruption and Vengeance in Today’s China," who recounted the struggles of doing business with the Chinese while working for his father at Tyson Foods, saying that the nature of business relations depends on the nature of political relations.

The CCP "sees American businesses as hostages to be used for its own purpose," he said. "That was my first lesson in China business: rules of the game are whatever the Party says what they are at that moment."

According to the Council on Foreign Relations, China has "mastered the technique of perfecting Western technology," and then using it for its own ends. Gallagher cited data that states that China is responsible for more than $600 billion in intellectual property theft (IP) every year.

Shum added China is losing talent in a "brain drain" to other nations as more and more people see the downfall of the Communist system. Another example of this is Microsoft's "Vancouver Plan," in which the tech giant has begun the relocation of its leading artificial intelligence researchers from China to Vancouver.

“China’s economic model has run its course," Shum told the committee, adding that “The attractiveness of China’s market today is not what it was 10 years ago."

Still, Shehzad Qazi, Chief Operating Officer of China Beige Book International, told the committee that the perilous situation is the result of a lack of oversight by the federal government, as well as simple greed by American executives. According to a Washington Examiner report by James Rogan, China serves as a significant operational hub for over 1,000 American companies, which Qazi blamed on greed.

“CEOs only care about their next earning statement,” Qazi replied. “They don’t care about the long run."

Piper Lounsbury, Chief Research and Development Officer at Strategy Risks, added that many companies that invest in China don't really know where their money goes, since many Chinese companies are at least partially controlled by the CCP. Shum added that any Chinese company should be considered a "sleeper cell" of the CCP to be activated later.

The committee noted that the rules aren't even when doing business with China, and the concept of "reciprocity," or equal treatment between trade and political allies, doesn't apply in China.

Asked if it were possible to continue to do business in China, Qazi said yes, but under certain conditions.

“If you’re aligned with (the CCP's) vision, you succeed," he said. "If you’re not, you don’t."