Legislation to curb US investment in China is a priority, the lawmaker said By Reuters

By Alexandra Alper

WASHINGTON (Reuters) – The Republican chairman of the House Select Committee on China said on Wednesday the panel’s top priority was legislation restricting U.S. investment in China to prevent investors from “funding our own demise.”

“We need to have an overseas investment regime that basically says, ‘No investment in these businesses that are on some kind of list,’ that says, ‘We shouldn’t be helping the Chinese military, we shouldn’t be supporting genocide.’ ,” said Rep. John Moolenaar, speaking at a panel at the American Enterprise Institute.

“That’s probably our number one priority right now,” he added. “We’re actually financing our own demise.”

A spokesman for the committee confirmed that the “genocide” referred to China’s alleged treatment of its Uighur minority in Xinjiang.

China’s embassy in Washington said Beijing firmly opposes “the US’s overstretching of the concept of national security and abuse of state power to target Chinese products and companies.” It added that China will “continue to firmly protect the legitimate and lawful rights and interests of Chinese companies.”

Moolenaar’s comments signal that Congress could revive long-sought restrictions on US investment in China, which have faced a rocky road in Washington.

A measure restricting foreign investment was excluded from the CHIPS Act before it was signed into law in 2022. In August 2023, Democratic President Joe Biden issued an executive order giving the Treasury Department the authority to ban or restrict American investment in Chinese entities in three. sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

But the rules to implement that order, proposed in July, have not yet been finalized. Treasury did not respond to a request for comment on the status of the proposed rules.

Moolenaar said House Speaker Mike Johnson “would like to have something before the end of the year.” Johnson’s office did not respond to a request for comment.

The United States and other Western countries have imposed sanctions on Chinese officials for human rights abuses in Xinjiang that the United States has said amounted to genocide.

China denies allegations of abuses, including the use of forced labor in Xinjiang, and describes the camps it has set up there as vocational training centers for Uighur Muslims who help fight religious extremism.

Moolenaar also singled out certain Chinese companies he said posed national security threats, including Chinese crane maker Shanghai Zhenhua Heavy Industry Co (ZPMC), which was featured in a recent committee report.

US-bound cranes manufactured by ZPMC, which account for 80 percent of ship-to-shore cranes in operation in US ports, contain unauthorized cellular modems, creating a “significant backend security vulnerability,” he said.

“The ZPMC could disrupt US maritime equipment and technology at the request of the Chinese government, including during a conflict over Taiwan,” he said, referring to the democratically-ruled island that China claims. The company, he said, is a “loaded gun.”

Neither ZPMC nor the Chinese embassy in Washington immediately responded to requests for comment on the matter, but ZPMC has said in the past that it does not pose a cybersecurity threat.

(This story has been updated to correct Uyghur spelling to conform to Reuters style in paragraphs 4 and 11)