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McHenry at CFIUS Hearing: We Must Use Time-Tested Tools to Get Tough on China—Not Novel Concepts

Washington, September 13, 2023 -

Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing to conduct oversight of the Committee on Foreign Investment in the United States (CFIUS) and examine other efforts to strengthen America’s national security.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“Today, we will conduct oversight of the Committee on Foreign Investment in the United States—or CFIUS—and examine efforts to strengthen our national security.
“Thank you, Assistant Secretary Rosen, for being here and I look forward to your testimony.
“CFIUS operates under a dual mandate: to address national security risks in foreign investments and maintain the United States’ commitment to an open investment climate.
“Five years ago, Congress enacted the most far-reaching changes to CFIUS in a generation. This legislation—the Foreign Investment Risk Review Modernization Act, or FIRRMA—extended CFIUS’s jurisdiction to certain non-controlling investments, as well as real estate transactions near sensitive government sites.
“FIRRMA also made operational updates so that CFIUS officials could complete investment reviews more effectively. This included creating the position that you now occupy, Mr. Rosen.
“These reforms were carefully tailored to legitimate national security risks. Yet, at the same time, FIRRMA underscored the United States’ longstanding embrace of foreign investment.
“In addition to reforming how we look at inbound transactions, Congress also strengthened national security through a major outbound policy, the Export Control Reform Act.
“This was the first long-term reauthorization of export controls in nearly four decades. This legislation, which passed with FIRRMA, now serves as the legal basis for our export controls against adversaries like China and Russia.
“Like all previous CFIUS laws, FIRRMA recognized that an outside investor may pose a risk to the country receiving investment. That’s common sense.
“But now the Biden Administration is proposing to use CFIUS to regulate Americans’ investments into China. That’s nonsense. Congress has repeatedly dismissed this idea, and for good reason.
“If you oppose Beijing’s state-owned enterprises, you want more Western investment in China—not less.
“If you are concerned about Chinese technology companies, you want more Americans in control of them—not fewer.
“And if you want to expand the reach of U.S. sanctions and export control laws, you want Americans in Chinese boardrooms who are required to comply with these laws—not CCP cronies and Saudi princes.
“This is precisely why Xi Jinping has been attacking Western influence in Chinese companies. The Biden Administration’s outbound investment proposal will only help him achieve that goal more quickly.
“Since it was first floated a few years ago, the premise of an ‘outbound CFIUS’ has lacked the basic facts necessary to warrant such a move. You hear of ‘loopholes’ and ‘gaps,’ but not a single real-world example.
“In May, I sent a letter to Secretary Yellen asking for the data to justify outbound restrictions. Not one of my questions was answered. That’s because there is no data to begin with.
“Mr. Rosen, you have an unenviable job. Now that outbound regulations have been announced by Executive Order, Treasury must seek to avoid a disaster in its implementation.
“You know as well as I do that we must use time-tested tools to get tough on China—not novel concepts.
“We need clear rules of the road and action based in data and facts—not political gamesmanship.
“As I have said all along, to outcompete China we cannot become more like the Chinese Communist Party. We must double down on our commitment to free people and free markets.
“Taking concrete actions is the toughest approach to countering the generational threat posed by the CCP.
“I look forward to hearing from you today about how we can work together to achieve that shared goal.”

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