Chairman John Moolenaar (R-MI) and House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chairman Blaine Luetkemeyer (R-MO) introduced the PRC Risk Transparency Act today. The bill aims to ensure transparency regarding the material and systemic risk posed by U.S. investment in and reliance on China.
The PRC Risk Transparency Act mandates that public companies with significant exposure to China disclose the percentage of their revenue, profit, capital investment, and supply chain tied to the People's Republic of China (PRC). It also requires these companies to reveal their relationships with the Chinese Communist Party and entities identified by the U.S. government as national security threats or human rights violators.
Additionally, the bill compels companies to assess the impact of a geopolitical conflict with China by describing a market access loss scenario where U.S.-China trade falls by 80% due to Chinese military aggression, leading to mutual sanctions and asset seizures. Investment firms would also be required to disclose their holdings of and exposure to certain Chinese securities.
"Our Select Committee's investigations have shown that Wall Street and American companies are deeply entangled with China, so a military confrontation with the PRC would be devastating to those firms – and to American investors," said Chairman Moolenaar. "All Americans have a right to understand that material risk. I am proud to support the PRC Risk Transparency Act to give investors and lawmakers the information they need to understand the systemic risks posed by investing capital in our foremost adversary. Thank you to Congressman Luetkemeyer for his important leadership on this issue."
"The geopolitical tensions between the United States and the People's Republic of China (PRC) pose significant risks to American investors and our financial markets. The PRC Risk Transparency Act is critical in arming our investors with the necessary material information to make informed decisions and protect their financial interests," said Congressman Luetkemeyer. "This is a proactive step in fortifying our economy against the risks posed by the PRC and ensures the long-term stability of our financial markets as we navigate increased Chinese aggression towards the United States and our allies."
