The United States House of Representatives Select Committee on the CCP, chaired by John Moolenaar, has issued a warning that legislating restrictions on investments in China is a top priority for the committee. This indicates that the U.S. Congress may once again push legislation related to restrictions on investments in China.
On Wednesday, during a seminar held at the American Enterprise Institute in Washington, Moolenaar stated, “We must establish a system for foreign investment, essentially meaning that investments in companies on the blacklist should not be allowed.”
“We should not aid the Chinese military, nor should we support genocide,” he said. “This might be our primary task at the moment.”
He pointed out that after more than two years of joint efforts by bipartisan lawmakers, many U.S. government officials have finally realized that some Chinese companies may pose a “huge risk” to national security.
When discussing these “bad Chinese companies,” Moolenaar mentioned that the first question many ask is, “Where is the smoking gun?”
Moolenaar stated, “Allies, decision-makers, and the public wish to see evidence of malicious behavior before taking action, which is understandable.” However, demanding to see concrete evidence before taking action when considering risks associated with China could put decision-makers in a passive position when the ‘smoking gun’ appears.
He emphasized that waiting for “conclusive evidence” could lead to high economic costs for the U.S., even if catastrophic consequences do not occur, as many emergency legislative solutions would require billions of taxpayers’ dollars.
He advocates for finding “loaded guns” when confronting China, which are these Chinese companies that pose unacceptable risks to national security.
“The technology they provide or their influence on supply chains poses unacceptable risks to our national security,” Moolenaar believes. He stated that even Chinese companies claiming to be private enterprises could, at any time and for any reason under the National Security Law, be required by the Chinese Communist Party to cooperate with authorities’ actions and sacrifice the interests of the American public.
“If the CCP demands them to provide U.S. data, would they rather spend the rest of their lives in jail to protect our data? I don’t think so,” Moolenaar said.
During his speech, Moolenaar warned that companies with ties to the CCP could disrupt supply chains, steal intellectual property and technology, and even manipulate U.S. public opinion.
He cited a statistical data point to illustrate the increasing threat posed by such actions.
“TikTok controls the news Americans watch and stores users’ personal data,” Moolenaar explained. He mentioned that the committee recently found that among American adults under 30, 39% frequently access news from TikTok, compared to only 9% in 2020.
He also noted that Chinese biotechnology company BGI may be stealing Americans’ genetic data, and the surveillance risks brought by drone company DJI.
Moolenaar also pointed out the safety risks posed by the cranes produced by ZPMC, a subsidiary of China Communications Construction Group.
Moolenaar said that cranes made by ZPMC represent 80% of the gantry cranes operating in U.S. ports. These cranes, without the knowledge of port authorities, have had cellular modems installed, creating “significant backdoor security vulnerabilities.”
He mentioned that ZPMC could, at the behest of the CCP, sabotage U.S. maritime equipment during critical moments, such as during a conflict in the Taiwan Strait.
Moolenaar suggested three crucial steps should be taken to ensure national security.
First, appropriate barriers need to be implemented in the market, especially in strategic areas, to prevent detrimental Chinese companies from undermining U.S. technology and weakening U.S. businesses. Ensuring that Chinese technological products, such as laser radars and gene sequencers, cannot access sensitive U.S. data or critical infrastructure.
Secondly, it is necessary to cut off channels for leading Chinese companies in key industries to access U.S. technology and funding.
“By enacting restrictions on foreign investments and stronger export controls, we can stop contributing to our own demise. If we continue to assist China behind the scenes, we cannot defeat the CCP,” Moolenaar stated.
Lastly, he emphasized the need for coordination with allies to encourage them to emulate these measures so that the supply chains, technology, and domestic markets of all countries can be safeguarded.