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Financial Services Committee Examines Policy Tools to Outcompete China

Washington, Feb 26 -

The House Financial Services Committee, led by Chairman French Hill (AR-02), held a hearing entitled, "Examining Policies to Counter China." The hearing highlighted the challenges posed by China across a range of policy issues, including China's dominance as an official creditor and its influence in the international financial institutions, energy security, the development of cutting-edge technologies, and illicit fentanyl trafficking. Members of the Committee also examined policy tools to outcompete China through growth, innovation, and cooperation with U.S. allies. 

Watch the hearing online HERE. 

View Chairman Hill’s opening statement HERE or below. 

As part of the hearing, the Committee reviewed several bills that would address the challenges posed by China. A full list of the attached bills can be found HERE.

On understanding the strength of American systems:

• “Our hearing will examine tools to counter China but make no mistake: those tools are embedded in an American system, and it’s the health of our thriving system that ultimately decides who will prevail,” said Chairman Hill. “We use sanctions, for example, but sanctions didn’t build us a $30 trillion economy. We use export controls, but it wasn’t export controls that created eight American exceptional technology companies worth more than a trillion dollars each. We use the Committee on Foreign Investment in the United States, but CFIUS didn’t make the dollar the world’s premier reserve currency. We forget these facts at our peril.”

On China's dominance as an official creditor:

• “According to the World Bank’s figures, the total external government debt of low- and middle-income countries increased from $1.7 trillion in 2011 to $3.5 trillion in 2021. This is a large part…that can be directly attributed to the CCP’s irresponsible and opaque lending programs like the Belt and Road Initiative,” said Rep. Young Kim (CA-40).

On the financing of fentanyl trafficking by China:

• “Fentanyl comes from China. It has destroyed our families. ... Drug overdoses are the leading cause of deaths between 18- and 45-year-olds, with fentanyl being responsible for 70% of those overdoses. ... Part of the solution is we need better border security, and part is that we can do work on this committee to stop the financing of fentanyl,” said Rep. De La Cruz (TX-15).

Witnesses echoed their support for the work of the Committee.

Nicholas McMurray, Managing Director, ClearPath, International and Nuclear Policy, commented, “International Financial Institutions (IFIs) like the World Bank also have a critical role to play in advancing firm, clean, and affordable energy infrastructure worldwide. Yet, they have been slow to align their financing with both energy security and geopolitical realities. These institutions were originally designed to support economic development and stability, but their outdated policies – including self-imposed restrictions on financing nuclear power and other firm energy sources – have left a gap that China has eagerly exploited. Over the past decade, China has dominated energy project financing, investing more than all major Western-backed development banks combined. Without reform, IFIs risk becoming passive enablers of China’s broader geopolitical strategy to make developing countries dependent on Chinese technology and supply chains.”