In addition to TikTok, Congress is also concerned about the flow of U.S. funds into China | Wilnesh News

BEIJING – The U.S. Congress is increasingly concerned about alleged funding of U.S. capital China’s military developmentsuggesting that tighter scrutiny of U.S. investments in China may continue beyond the end of the president’s term and become part of the law.

There have been a few false starts in 2023 that have never stopped U.S. investment in certain industries in China, but some in the House are moving on.

“I do think Congress needs to step up and legislate to create a lasting solution to this problem because otherwise, we’re going to be ping-ponging back and forth between different administrations and different executive orders, or different regulators saying different things,” Mike Gallagher, chairman of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, said in a statement to CNBC this week.

“I think, at least in the advanced technology space, we need to cut off the flow of funding. We can’t continue to fund our own destruction,” said Gallagher, who also chairs the House Armed Services Subcommittee on Cybersecurity. Member of the Special Committee.

The House Select Committee on China, established last January, has led a legislative bill that would ban TikTok’s Chinese parent company ByteDance in the United States if it did not sell the popular social media app. The bill passed the House last week and now must pass the Senate to become law.

The House Select Committee also issued a report in February Accused US venture capital firm of investing billions of dollars “Enter the Chinese companies fueling China’s military, surveillance state, and Uyghur genocide.”

It’s unclear how much, if any, U.S. companies knew of such links. Beijing denies accusations of genocide.

Similar research detailing the connections between U.S. capital, Chinese venture capital firms, and Chinese tech startups has begun in Major media Open from the end of 2023.

this The study was produced by the Future Alliance, The group describes itself as “a bipartisan advocacy organization that blends private sector capitalism and forward-thinking leadership to address a new wave of emerging technology and security challenges facing the United States and its allies.”

“To ensure that those that are competitive and leading technologies have a chance to come to the fore, capital is a key factor,” the report said. “We therefore need to restore a level of accountability and fidelity to the rule of law that underpins our capital markets and The private sector became the envy of the global system.”

The Future Alliance also released a list of top venture investors in the technology and defense sectors that it believes “advance U.S. interests through clear actions.”

Little has been made public about the advocacy group’s background, except for executive director Andrew King, who told CNBC in an interview that he single-handedly funded the organization.

“We’re not taking money from any outside group. This is a bipartisan group. I’m the one who can go public, but I don’t have any vested interest,” he said. “No one is trying to make money from this.”

“It’s just that people … see the development of the economy and the abuse and exploitation of the private market, which cost us a generation of technology,” said King, who is also a managing partner. Works at Bastille Ventures, a San Francisco-based venture capital firm.

The U.S. government has so far struggled to pass sweeping restrictions on investment in China, although a tougher stance on Beijing is seen as an area of ​​rare bipartisan agreement.

The Senate overwhelmingly passed a bill in July requiring U.S. investors in advanced Chinese technology to notify the Treasury Department.Although that is a The bill did not pass the House, although it was a watered-down version of an earlier proposal to limit such investments.

but, On the basis of the executive order, House Foreign Affairs Committee Chairman Michael McCaul and Ranking Member Gregory W. Meeks introduced “Preventing Adversaries from Developing Critical Capabilities Act“It also limits investment in hypersonics and high-performance computing.

It’s unclear if or when the proposals will become law.

When Biden’s executive order was issued, China’s Ministry of Commerce called on the United States to “respect the principles of market economy and fair competition” and “not to artificially hinder global trade and create obstacles to global economic recovery.”

China’s State Financial Supervision Bureau did not immediately respond to a request for comment.

“I don’t think there’s any appetite on either side to get enough members of Congress to tighten restrictions in a meaningful way because there are so many entrenched interests,” he said, without elaborating. He pointed out that the legislation pays more attention to companies with the following characteristics: Military Industrial Connectionsor connection with sanctions, entity list or Export controls.

In addition to blacklisting specific Chinese companies, the U.S. Commerce Department has announced sweeping restrictions over the past two years aimed at blocking China’s access to advanced semiconductor technology.

Although U.S. institutional investment in China has largely been paused due to regulatory and growth uncertainty, King said that once China gets through its own economic cycle, “I fully expect this to be a very profitable market.”

“Many of the large asset managers and investment managers that are global in nature or want to have a larger footprint in China, (they) don’t want to lose the option of being able to plan for (both sides of) this divide, regardless of the outcome, “He said.