In a recent conversation on competition with China, Chairman Mike Gallagher emphasized the need for Congressional action on restricting US investments in China. Gallagher and Ranking Member Raja Krishnamoorthi (D-IL) spoke in conversation at the Council on Foreign Relations on Tuesday, Sept. 11.
“I think Congress needs to step up and legislate the issue,” Rep. Gallagher said, according to a Sept. 11 social media post on X, formerly Twitter, by The Select Committee on the CCP. “Even those in the financial community that are less hawkish on China than I am— what they want above all other things is certainty, predictability, clarity.”
According to a press release, Rep. Gallagher called on U.S. President Joe Biden, urging swift and comprehensive action in response to the Administration's executive order aimed at limiting U.S. outbound investments to China. Emphasizing the necessity of addressing national security concerns, Gallagher called for transparency, encompassing both private and public market investments, to restrict U.S. capital from flowing to entities linked to the Chinese Communist Party's (CCP) military, technological advancements, and human rights violations. Gallagher asked President Biden to consider these issues and "meet the moment with urgency, clarity, and breadth required to address the serious national security issues we face."
In his letter to the president, Gallagher advocated for ensuring investor certainty, comparable due diligence standards for Chinese companies, and international collaboration with allies to establish parallel investment restrictions. Gallagher emphasized the national security threats of US capital flowing into China, including making them "complicit – often unwittingly – in human rights abuses." He pointed out that over $200 billion of U.S. capital is invested in PRC companies through private markets, while over $1.1 trillion is invested through public markets in PRC stocks and bonds, including technology firms linked to the Chinese military.
Gallagher stressed in his letter that an effective strategy must commence with transparency to determine the complete extent of U.S. exposure to risks and the beneficiaries of U.S. investments in China. He suggested limiting certain investment sectors that are pertinent to national security, any sort of technological advancement by the CCP, and anything related to human rights abuses.
