Lawmaker Declares Legislation to Restrict US Investment in China as Top Priority

By Alexandra Alper

WASHINGTON – The Republican chair of the House of Representatives’ select committee on China stated on Wednesday that the committee’s primary focus is to introduce legislation aimed at restricting U.S. investments in China to prevent American investors from “funding our own demise.”

“We need an outbound investment framework that essentially prohibits investments in specific businesses,” Representative John Moolenaar emphasized during a panel discussion at the American Enterprise Institute. He noted the importance of not assisting the Chinese military and not supporting acts of genocide.

“This is currently our top priority,” he added. “We are indeed financing our own decline.”

A spokesperson for the committee clarified that the term “genocide” pertains to China’s alleged actions against its Uyghur minority in Xinjiang.

In response, the Chinese Embassy in Washington expressed strong opposition to the United States for overreaching the concept of national security and misusing state power against Chinese products and companies. They asserted that China will continue to safeguard the legitimate rights and interests of its companies.

Moolenaar’s comments suggest Congress may reconsider previously sought restrictions on investments in China, which have encountered significant challenges within Washington. An earlier attempt to include such restrictions in the Chips Act was unsuccessful before the law’s enactment in 2022. In August 2023, President Biden issued an executive order empowering the Treasury Department to restrict U.S. investments in specific Chinese sectors, including semiconductors, quantum technologies, and some artificial intelligence systems.

However, the rules for implementing that order, proposed in July, are still awaiting finalization. The Treasury Department has not provided any updates regarding the status of the proposed regulations.

Moolenaar mentioned that House Speaker Mike Johnson is keen on having a legislative proposal ready before the year ends, although Johnson’s office did not provide further comments.

The United States and several other Western nations have imposed sanctions on Chinese officials due to human rights violations in Xinjiang, which the U.S. government has described as genocide.

China has disputed these allegations, asserting that its operations in Xinjiang, which include facilities the government refers to as vocational training centers for Uyghur Muslims, are aimed at addressing religious extremism.

Moolenaar also highlighted specific Chinese companies he believes pose national security risks, including Shanghai Zhenhua Heavy Industry Co. (ZPMC), which was mentioned in a recent committee report. He expressed concern that U.S.-bound cranes made by ZPMC, which dominate the ship-to-shore crane market at U.S. ports, contain unauthorized cellular modems that represent “significant backdoor security vulnerabilities.”

He warned that ZPMC could potentially compromise U.S. maritime equipment and technology at the behest of the Chinese government, especially amid conflicts related to Taiwan, the self-governing island claimed by China. Moolenaar characterized the company as a “loaded gun.”

Both ZPMC and the Chinese embassy did not respond immediately to inquiries regarding these claims, although ZPMC has previously stated that it does not pose any cybersecurity threat.

(This article has been updated to correct the spelling of Uyghur in multiple instances.)