House Financial Services Committee (HFSC) chair and Republican North Carolina Rep. Patrick McHenry announced in a letter Wednesday that he will not support a measure that would curtail overseas investments in China.
The Outbound Investment Transparency Act would require U.S. companies to notify the government when they make investments in certain foreign nations, particularly in China, according to the text of the bill authored by Republican Texas Sen. John Cornyn and Democratic Pennsylvania Sen. Bob Casey. Though it passed in the Senate with a 91-6 majority, it may not be included in the final National Defense Authorization Act (NDAA) after McHenry voiced opposition to the proposal, according to Punchbowl News.
McHenry attributes his opposition to his belief that more U.S. private investments in China will prevent Beijing from taking state control of them.
“If you oppose Beijing’s state-owned enterprises, you want more Western investment in China—not less,” McHenry said on Sept. 13. “If you are concerned about Chinese technology companies, you want more Americans in control of them—not fewer.”
“While we appreciate the intentions and objectives of Section 1085, the result of this provision would be to strengthen rather than weaken the objectives of Xi Jinping and the Chinese Communist Party (CCP),” McHenry, along with the six subcommittee chairs of the House Financial Services Subcommittee, said the letter. “Unfortunately, in our view, Section 1085 misses the mark.”
The Outbound Investment Transparency Act would provide insight as to whether American investments in certain Chinese tech sectors – specifically in artificial intelligence, quantum computing, and microelectronics – directly benefit the Chinese Communist Party (CCP), according to the bill summary. The Biden administration enacted a similar regulation via executive order in August. (RELATED: ‘Clearly Diluted’: Critics See Massive Holes In Biden’s New China Restrictions)
Too often the GOP talks a big game on China, but isn’t willing to walk the walk. We have an opportunity to get tough on China by including my Outbound Investment Transparency Act in NDAA to protect our nat’l security.
Let’s hope Republicans in House leadership don’t squander it.
— Senator Bob Casey (@SenBobCasey) November 29, 2023
A congressional aide told the Daily Caller News Foundation that there are concerns that preventing the bill will only prove advantageous to China and undermine U.S. national security.
“If the reports are true, it will be a deeply disappointing outcome,” Chairman of the House Select Committee on the CCP Mike Gallagher said in a statement on Thursday. “While Congress dithers, we continue to fuel our own potential destruction as American capital and know-how pour into firms that directly support the People’s Liberation Army and the CCP’s totalitarian surveillance state. I look forward to working with my colleagues on both sides of the aisle to rectify this national security goal.”
House Speaker Mike Johnson has the technical authority to overrule McHenery but is unlikely to do so, according to people familiar with the matter who spoke to Punchbowl News. House Foreign Affairs Committee Chair Michael McCaul said that if McHenry blocks the measure, lawmakers will try and pass it through regular order.
McHenry’s office directed the DCNF to his letter sent the the chairs of the House and Senate Armed Services committees. Johnson did not immediately respond to a request for comment.
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