Congress Targets U.S Funds Flowing to China Beyond TikTok

The U.S. Congress is increasingly focusing its attention on American capital allegedly contributing to China’s military development, indicating that greater inspection of U.S. investments into China may persist beyond presidential terms and evolve into law.

Despite some setbacks in 2023 that failed to obstruct U.S. investments in specific Chinese industries, certain members of the House of Representatives are still trying to remain committed to their efforts.

Mike Gallagher, Chairman of the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, said, “I believe Congress must take decisive action to enact a lasting solution to this issue otherwise, an inconsistency will arise between different administrations, executive orders, or regulatory directives.”

TikTok Ban and Allegations

The House Select Committee on the Chinese Communist Party (CCP), formed last year, focused on the legislative effort to effectively ban TikTok in the U.S. unless its Chinese parent company, ByteDance, doesn’t sell the popular social media app. The bill successfully passed the House and now awaits approval from the Senate to be implemented as a law. 

Moreover, the House Select Committee also released a report alleging that U.S. venture capital firms had invested billions into Chinese companies supporting the CCP’s military endeavors, surveillance, and the Uyghur genocide.

Since late 2023, similar research highlighting the nexus between U.S. capital venture firms in China and Chinese tech startups has gained traction in major media outlets.

Advocacy for Accountability

One such study, conducted by “Future Union,” a bipartisan advocacy organization for addressing emerging technology and security challenges facing the U.S. and its allies, focused on the pivotal role of capital in fostering leading technologies. The report further added that we must reestablish accountability and follow the rule of law that historically distinguished our capital markets from those of the private sector.

Future Union also identified top venture investors in technology and defense that are crucial for advancing America’s interests through tangible actions.

Political Instability in the U.S 

Enacting broad restrictions on investments in China has proven challenging for the U.S. government despite the bipartisan agreement to take a tough stance against Beijing.

In July, the Senate approved a bill requiring U.S. investors in advanced Chinese operations to inform the Treasury Department. This bill was an initial version of earlier proposals that focused on limiting such investments. However, the legislation failed to pass in the House.

In August, the Biden administration issued an executive order that aimed at vanning U.S. investments in semiconductor, quantum computing, and artificial intelligence companies, giving a reference to national security concerns. Moreover, The Treasury Department was charged with implementing the order after the public comment period. As of now, no further details have been released to address this issue.

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