In August, the Biden administration issued an executive order prohibiting new private equity, venture capital and joint venture investments in Chinese companies involved in the semiconductors and microelectronics, quantum information technologies and artificial intelligence sectors. And while most lawmakers are supportive of the order, many said that it could benefit from additional congressional action.
Subcommittee Chair Blaine Luetkemeyer, R-Mo., said he and House Financial Services Chair Patrick McHenry, R-N.C., agree that the order "took a step in the right direction but could be improved through legislative action, which is more permanent."
Luetkemeyer contended that "the best approach" is a bill sponsored by Rep. Andy Barr, R-Ky., which requires that the president impose sanctions on companies involved in China's defense or surveillance technology sectors. That bill, the Chinese Military and Surveillance Company Sanctions Act of 2023, passed out of the House Financial Services Committee in September.
Barr touted his bill, which he introduced in February 2023, as the most effective and forceful approach, while also thanking his colleagues "for their well-intentioned and patriotic efforts here to get at this problem of financing entities of concern."
In November, the House Foreign Affairs Committee advanced a bill from committee leaders Michael McCaul, R-Texas, and Gregory Meeks, D-N.Y., known as the Preventing Adversaries from Developing Critical Capabilities Act. That bill builds upon Biden's executive order, expanding the restricted technology sectors to include hypersonics and high-performance computing, while also expanding the scope of countries covered to include Russia, Iran and North Korea.
Barr said while his bill is an "entity-based approach," the bill from Meeks and McCaul is a "sector-based approach."
Ahead of the hearing, the American Securities Association, a trade association representing regional financial firms, sent a letter to Luetkemeyer and Beatty, urging that Congress "must use every tool at its disposal to combat the danger posed by (China)."
ASA President and CEO Christopher A. Iacovella specifically voiced his support for Senate legislation, introduced by Sens. Bob Casey, D-Pa., and Rick Scott, R-Fla., that would require private funds to annually disclose their investments in China, Iran, Russia and North Korea. Iacovella wrote he "is hopeful that the House will consider similar legislation."