Luetkemeyer Delivers Opening Remarks in Hearing on Chinese Sanctions
Washington, January 30, 2024
Tags: Financial Services
Today, Chairman Blaine Luetkemeyer (MO-3) delivered opening remarks for the Financial Services Subcommittee on National Security hearing entitled, “Better Investment Barriers: Strengthening CCP Sanctions and Exploring Alternatives to Bureaucratic Regimes.”
Rep. Luetkemeyer: “As chairman of the National Security subcommittee, I have made it my top priority to expose the threat posed by the Chinese Communist Party to the United States. That is why the very first hearing this Committee held in the 118th Congress was a full committee hearing tackling the economic competition with China and our first subcommittee hearing looked at the CCP’s business model that fuels the fentanyl crisis.
I also serve on the Select Committee on the Chinese Communist Party, where these concerns are the focus of our work.
2023 was a pivotal year in US-Chinese economic relations and one US businesses and investors should reflect upon carefully what’s to come if they continue to do business with the CCP.
We saw Chinese security forces raid and imprison local staff at US consultancy firms Capvision, Bain & Company and Mintz, impose sanctions on US companies Lockheed Martin and Raytheon, ban US chipmaker Micron, detain a senior executive of Japan’s Astella Pharma Group, and hit London-headquartered Deloitte with a record fine.
This behavior hasn’t let up this year. Earlier this month, the CCP announced sanctions on five U.S.-based companies, causing them to lose any property they have in China and prohibiting them from working with Chinese organizations and individuals.
These new sanctions came as a result of U.S. arms sales in Tawain. Top intelligence officials predict that China will invade Tawain this decade, in which case more sanctions will come, and you can bet all US direct investment in China would be nationalized.
However, foreign companies continue to make substantial investments into China and US business executives continue to line up to the trough and even pay $2,000 a plate for the privilege of having dinner with Xi Jinping in San Franciso.
And we must make sure that those investments do not harm the security of the United States and our allies.
So, while this should serve as a major warning to U.S. investors who haven’t yet gotten the message about the risks of doing business with Chinese organizations, it should also be a reminder to Congress that we need to outbound investment screening right.
We’ve been debating outbound investment screening for multiple Congresses and multiple White House administrations.
Last August the Biden Administration released an Executive Order that took a targeted approach toward restricting outbound investment. Chairman McHenry and I agreed this took a step in the right direction but could be improved upon through legislative action, which is more permanent.
Others in Congress are working on this issue. Last year, the Senate attempted to attach a provision to the NDAA, and the House Foreign Affairs Committee introduced its own bill. I applaud the efforts of my colleagues for continuing to think about how to address these challenges. We all share the same concerns around American investors contributing toward feeding the beast that is the People’s Republic of China.
However, the best approach that I have seen on this front was a bill sponsored by my good friend Mr. Andy Barr, the Chairman of the Subcommittee on Financial Institutions and Monetary Policy as well as a member of this subcommittee. His “Chinese Military and Surveillance Company Sanctions Act” passed through our committee with full bipartisan support, and I was proud to be an original cosponsor.
His legislation would require the President to impose sanctions on companies involved with China’s defense or surveillance technology sectors. In my opinion, and the opinion of many on this committee, it is the bill that takes the toughest approach towards combatting the economic threat from the CCP.
Staving off the threat from China has been the main focus of my time here, especially during this Congress. At the same time, I was also once a small business owner and understand the importance of a free market economy.
So, when we discuss this topic, I think that it is critical to find the right balance between protecting Americans and our allies from the threats imposed by the Chinese Communist Party and other adversaries, like Russia, while also promoting a global free market that allows our economy to thrive, without creating a sprawling new bureaucracy.
That is why I hope today’s hearing will advance our productive conversations and help shape good policy for the American people.”