The chairman of a new congressional committee on China says he plans to focus scrutiny on US investments in the country, amid broader concerns about the threat of economic warfare between the world’s two biggest financial powers.
“If the story of the last five-ish years was enhanced scrutiny of Chinese investment in the US, the next phase of this is going to be enhanced scrutiny of outbound US investment into Communist China,” said Representative Mike Gallagher, the Wisconsin Republican who has been tapped to head the House Select Committee on China.
The Biden administration and Congress are both considering proposals that would create a system for monitoring and potentially blocking US investments in China. Gallagher predicted that “some version” of such a plan is “inevitable.”
Gallagher said there’s been a tendency in the past to dismiss these efforts as overwrought or alarmist. But that’s not the case.
“Whenever I go to New York and I have this conversation, I feel like there’s a tendency to say ‘Ah, well, you’re a defense hawk, to the extent we think about a confrontation with China over Taiwan, it’s a distant tail risk,’” Gallagher said in an interview. “I don’t think that’s the case anymore.”
House Republican Leader Kevin McCarthy, who is running for speaker of the chamber, has announced that he plans to create the committee when his party takes over next year. McCarthy described the panel as one that would coordinate efforts across the government to counter “the greatest geopolitical threat of our lifetime.
Chinese President Xi Jinping is “preparing his country for economic struggle and warfare,” Gallagher said, adding that he wants the Pentagon and other national security bodies to coordinate planning more closely with the US’s financial agencies.
The Chinese embassy didn’t immediately respond to a request for comment on Gallagher’s remarks.
Gallagher has introduced legislation that would ban the TikTok social media platform in the US. He said he plans to have at least one hearing on how the Chinese government uses data and plans to ask TikTok about its algorithm.
He also said he plans to look into whether tax-advantaged pension funds, such as those offered by state and local governments and universities, should be investing in China.
Such a “dollars and data approach will help US policymakers understand where the US system is too dependent on China,” he said. That focus will also fall on rare earth minerals, pharmaceuticals and medical supplies.
“We’re not going to use this as a bomb-throwing exercise,” he said, referring to concerns that the committee will simply exist to counter or criticize the Biden administration’s approach to China. “There’s a ton of bipartisanship on China issues.”