Congress Bulls in China Shop


The last month saw the 118th Congress find their new offices, stand up their new committees, and raise a chorus from both sides of the aisle for more participation in trade policy.  

The first hearing held by the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party capped a day of activity by House lawmakers focused on China, including approval of a raft of China-focused bills by the Financial Services and Foreign Affairs Committees.

Gallagher Committee Launches 

Members of the newly-created Select Committee on China spent their inagural session calling for bipartisan support to counter the economic and national security threats posed by China.

Rep. Mike Gallagher (R-Wisc), chair of the Select Committee, urged his members to act “with a sense of urgency” and on a bipartisan basis in arriving at proposals to counter Beijing.

“We may call this a strategic competition, but it's not a polite tennis match,” he said. “This is an existential struggle over what life will look like in the 21st century – and the most fundamental freedoms are at stake.”

Over the course of the three-hour hearing, lawmakers from both sides of the political aisle raised numerous concerns over China’s behavior and policies – and its potential aggression toward Beijing.

Many of the issues they raised are already the subject of legislation, like limiting or prohibiting Chinese investment in US agricultural land and companies. Similarly, questions were raised about whether there should be restrictions on US investment in China, particularly in the technology sector.

China’s unfair trade practices were raised, with several members from both sides of the political aisle suggesting the time has come to revoke China’s permanent normal trade relations status.

Bill Proposes Rejecting LDC Status for China

The House Foreign Affairs Committee approved legislation (HR 1107) yesterday directing the Administration to fight for revoking China’s status as a developing country in all international organizations in which both countries are members.

The bill would make it US policy that China should not be considered a developing country in international organizations, agreements and treaties.

The measure does not name specific international organizations, but the United States has long complained about China’s developing country status at the World Trade Organization.

“Make no mistake – China is not a developing country, despite the People’s Republic of China’s claims,” the bill’s chief sponsor, Rep. Young Kim (R-Calif) said during the committee’s mark up. The bill is co-sponsored by Rep. Gerry Connolly (D-Va).

The committee approved an amendment to the bill that would place restrictions on the President’s ability to waive the measure in specific circumstances.

McCaul Continues BIS Drumbeat

Committee Chairman Michael McCaul (R-Texas) commended the Administration for recently- imposed export controls on semiconductors and semiconductor. But he sharply criticized the Commerce Department’s Bureau of Industry and Security, saying that BIS “continues to grant licenses that allow critical US technology to be sold to our adversaries – even those it’s designated as threats to national security.”

He charged that in one recent six-month time period, BIS approved licenses worth $60 billion to. Huawei and $40 billion to SMIC, which are both on the Entities List. “If BIS continues to mindlessly green light sensitive technology sales, the CCP has proven they will use our own inventions against us,” he said.

Mr. McCaul said he is ready to work with the Administration to beef up US export controls.

Raft of China-Focused Bill Approved

The House Financial Services Committee approved a long list of  bills, mostly aimed at sanctioning China if it takes any military action against Taiwan.    The measures were passed with bipartisan support, paving the way for action on the House floor.

Addressing the economic and national security risks posed by China is high on the House’s priority list for the 118th Congress. The first hearing held by Financial Services this year was on China.

“We know China is not an ally or a strategic partner. They are a competitor,” committee chairman Patrick McHenry (R-NC) said before the mark up.

Ranking Democrat Maxine Waters (Calif) also endorsed the China bills. But she called the measures “modest efforts to hold China accountable,” arguing that the biggest threats to the US economy are a possible default on US debt and inflation.

Bills approved by the committee include:

  • The “Taiwan Conflict Deterrence Act of 2023 (HR 554) to disincentivize Chinese aggression towards Taiwan by publishing the assets of top Chinese leaders, as well as cutting them and their family members off from financial services, if Beijing acts against Taiwan.
  • The “Taiwan Non-Discrimination Act of 2023” (HR 540) to require the United States to advocate for Taiwan's membership at the International Monetary Fund.
  • The “Chinese Currency Accountability Act of 2023,” (HR 510) to prevent the Chinese Communist Party from coopting critical international institutions like the International Monetary Fund by requiring the Treasury Secretary to oppose an increase in the weight of China's renminbi in the basket of currencies determining the value of Special Drawing Rights.
  • The “China Exchange Rate Transparency Act of 2023,” (HR 839) to protect global market participants from the CCP’s exploitative practices by requiring the US Director at the International Monetary Fund to advocate for greater transparency in China’s disclosure of its exchange rate policies.
  • The “PROTECT Taiwan Act,” (HR 803) to help isolate the CCP from the international financial system by directing the Federal Reserve, the Secretary of Treasury and the Securities and Exchange Commission to exclude representatives from the People’s Republic of China from proceedings of various international financial groups and organizations in the event of an invasion of Taiwan.
  • The “Securing America’s Vaccines for Emergencies (SAVE) Act of 2023,” (HR 555) to end US over-reliance on adversarial governments for medical supplies during an emergency by bolstering and diversifying existing supply chains through the Defense Production Act.
  • The “China Financial Threat Mitigation Act of 2023,” (HR 1156) to promote American financial resiliency by requiring the Treasury Secretary to report on global economic risks emanating from the Chinese financial sector



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