Today, Patrick McHenry, Chairman of the House Financial Services Committee, commented on the U.S. Department of the Treasury's final rule limiting outbound U.S. investment to China. This decision follows a notice of proposed rulemaking related to an Executive Order from the White House.
Chairman McHenry remarked, "The most well-known proponent of restricting American investment in China is, of course, Xi Jinping." He further noted that unlike various legislative proposals in Washington, this rule aims specifically at cutting off funding for China's military-surveillance complex. McHenry expressed appreciation for Treasury's focus on military technologies and emphasized the importance of ensuring these technologies impact national security without expanding regulations unnecessarily. He also approved the decision not to impose new regulations on publicly traded securities, stating such restrictions could misinterpret capital markets and divert attention from genuine national security threats.
Despite his support for certain aspects of the rule, McHenry voiced skepticism about a sectoral approach to regulating outbound investment. He highlighted bipartisan support for U.S. investments aimed at acquiring Chinese companies, citing congressional efforts to control TikTok as evidence. For a substantial global impact on China's military capabilities, he advocated for Congress and the Administration to rely on established sanctions regimes. McHenry concluded by expressing his intent to scrutinize this rulemaking further while opposing measures that might inadvertently aid Xi Jinping's efforts against Western influence in China.