Congress Could Hand Beijing A Win As China Investment Crackdown Falters

The long-sought inclusion of restrictions on outbound U.S. investments in China in the year-end defense policy bill is currently hanging in the balance.

Lawmakers are locked in last-minute talks over whether to incorporate the outbound investment curbs into the National Defense Authorization Act (NDAA). The provision earned bipartisan support in the Senate’s version of the bill, but some House members now doubt that it will ultimately be included in the legislation.

Rep. Andy Barr, who introduced the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act that mirrors the language the Senate included in its version of the NDAA, said Tuesday that the measure remains “in flux,” according to Politico.

“The shutdown prevented the Financial Services Committee from doing what we wanted to do, which was a markup where we were going to be able to have regular order,” Barr said.

House Majority Leader Steve Scalise similarly voiced skepticism about the provision’s inclusion, according to the outlet.

Barr declined to comment further when reached for comment by the Daily Caller News Foundation, while Scalise’s office did not respond.

If enacted, the provision would empower the Treasury Secretary to prohibit U.S. investments in sensitive Chinese technologies, require domestic entities to notify the Treasury of certain investments in the PRC, and authorize the Secretary to impose sanctions on PRC entities tied to its military or intelligence apparatus.

The provision has strong backing from China hawks who point to the billions of American capital that have bolstered PRC critical technology companies, including those aiding the Chinese military, surveillance state, or the CCP’s genocide against Uyghur Muslims.

“When U.S. investment flows into these sectors, it strengthens a system that seeks to displace American leadership, undermine our alliances, and reorder global norms to favor the CCP’s authoritarian power,” a group of nearly two dozen policy experts wrote to congressional leaders in late November, urging them to include the provision in the NDAA.

“No nation committed to human rights, and no nation serious about its own national defense and security, can allow its financial sector to continue playing this role,” they wrote.

Similar restrictions were stripped from defense funding bills in 2024 and 2023.

Meanwhile, Rep. John Moolenaar of Michigan, chairman of the House Select Committee on the CCP and a longtime advocate for the curbs, struck a more hopeful note.

“I’m optimistic we’ll get something in,” Moolenaar said, according to Politico. “I feel like we’re making progress. It’s a complicated issue, and I think there’s a recognition for the need for this kind of legislation.”

The FIGHT China Act drew early support from House Speaker Mike Johnson, who praised it as “an important step to protect our nation’s long-term investments” when it was introduced in March.

The NDAA’s final text could be released as soon as Thursday, Politico reported.