Congress must pass the NDAA each year to fund the Department of Defense, and the House and Senate are currently working to reconcile differences between their own versions of the bill.
"The result of this provision would be to strengthen rather than weaken the objectives of Xi Jinping and the Chinese Communist Party," House Financial Services Committee Chair Patrick McHenry, R-N.C., and all six Republican subcommittee chairs wrote in a Nov. 29 letter to the chairs and ranking members of the House and Senate Armed Services Committees.
As acknowledged in the letter, the provision is similar in nature to an executive order that President Joe Biden issued in early August.
House Republicans wrote that the provision "would have the unintended consequence of limiting Americans' control, influence and intelligence gathering in Chinese technology companies."
"We want Americans on the boards of Chinese companies spreading Western standards and complying with U.S. laws," the letter states. "Under (the provision), those board seats would go to Chinese citizens."
The lawmakers suggested taking a different approach to China and touted their own legislation, which the committee passed in September, known as the Chinese Military and Surveillance Companies Sanctions Act. That bill would impose comprehensive sanctions on any entity involved in China's defense and surveillance technology sectors.
"Since China is in no way dependent on capital from U.S. investors, the only way to undermine its military companies is by cutting off revenues and technology, which is the advantage of a sanctions regime," the lawmakers wrote in their letter.
Not all House lawmakers are on the same page, though. In late October, Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., — who serve as chairman and ranking member of the House Select Committee on China, respectively — wrote a letter to U.S. Treasury Secretary Janet Yellen asking her to "urgently" implement Biden's executive order.
Gallagher told Bloomberg in an interview that "it would be a bad look for House Republicans to do nothing, or have a construct that's weaker than the Biden executive order," adding that Congress ultimately needs to "legislate a solution."
Given McHenry's influence and his spot on the conference committee that will form the final version of the NDAA, it's likely that the provision will be dropped, according to Bloomberg.
