House Select Committee Leader Says Investment, Technology Restrictions Will Be Iterative
The top Democrat on the House Select Committee on China, Rep. Raja Krishnamoorthi of Illinois, said Wall Street and other investors want the government to provide a negative list they can hand off to their compliance teams.
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Krishnamoorthi said during a Q&A at the Center for Strategic and International Studies that he's told: "please provide us with guidance as to what’s legal, what’s not legal, what’s ethical, what’s not ethical."
He said he understands why those who wish to invest in China are confused because a multitude of different entity lists exist. However, he said, the administration won't just give a no-go list.
"What we find with regard to the [People's Republic of China] and the [Chinese Communist Party], it’s like whack-a-mole. You put one name on the list, all of the sudden another name pops up with the same owners -- so they evade those lists," he said. "I’m glad the administration took a sectoral approach and countrywide approach." Krishnamoorthi's comments came as the Treasury Department drafts regulations to place new prohibitions and notification requirements on U.S. outbound investments in China's artificial intelligence, quantum and semiconductor industries (see 2310050035)
CSIS Freeman Chair in China Studies Jude Blanchette told Krishnamoorthi that some complain the small-yard, high-fence descriptor -- the Biden administration's stated goal of placing strict controls on a small number of critical technologies -- isn't really so. He said the size of the yard keeps expanding and the fence keeps getting higher.
Krishnamoorthi acknowledged the pace of changes is difficult for business certainty and said he hopes at some point "we can get to more of an equilibrium." But, he said, taking national security into account when controlling technology is "going to be slightly iterative. We’re still learning about how certain technologies could metamorphosize into being weaponized."