U.S. Rep. Mike Gallagher (R-Wisc.), chair of the Select Committee on the CCP, is calling on President Joseph Biden to place additional restrictions on U.S. investment in China. Gallagher sent his letter to Biden ahead of an executive order restricting investments in certain technologies, expected to be released in the coming days.
"Chairman Gallagher urged the President to 'meet the moment with urgency, clarity, and breadth required to address the serious national security issues we face'," the Select Committee stated in a press release.
In the letter Gallagher expresses his support for the draft order and suggests it also include "several core principles" to make sure the executive order is effective.
Gallagher stated in the letter that some U.S. investment to China "poses a significant national security risk, exposes Americans to material and systemic financial risks, and makes them complicit – often unwittingly – in human rights abuses."
He stated that American private markets invest more than $200 billion into Chinese companies, and public markets through “stocks and bonds” invest more than $1.1 trillion. A "sizeable portion" of the investments support Chinese tech companies with ties to the Chinese military and the CCP's "abhorrent human rights abuses," Gallagher wrote in the letter.
One potential solution Gallagher brings up in the letter, and which he urges President Biden to incorporate into the draft, is transparency. This would include, as suggested by Gallagher, a better understanding of who the “final beneficiaries” of these investments are, and the risks associated with investment in China. Otherwise, states Gallagher, the lack of information and data leads to misinformed investment and poses a threat to U.S security.
Additional core principles include restrictions on public and private investment to China, especially to those linked to technology, military, and genocide, standards of “due diligence” for companies in China who are receiving American investment, and more, the press release reports.
"If American capital continues to flow to Chinese military companies, we are at risk of funding our own destruction," Gallagher wrote in the letter. "Wall Street needs to recognize that investing in critical technology sectors in the PRC endangers our service members, imperils the targets of CCP human rights abuses, and enhances systemic risks for the global economy. That's a deadly cocktail the American people didn't order and don't want to be served."
