U.s. House Committee Proposes Reset to U.s.-china Economic Relationship

• Publication year: 2024
• Citation: Vol. 1 No. 3

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Timothy J. Keeler, Andrew Olmem, Howard W. Waltzman, Sydney H. Mintzer, Tamer A. Soliman, Jing Zhang, Shelby L. Colson, and Warren S. Payne ^*

In this article, the authors summarize the findings and recommendations contained in a report released recently by the U.S. House Select Committee on the Chinese Communist Party, titled, "Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party."

The U.S. House Select Committee on the Chinese Communist Party (CCP) (Select Committee) has released a report, titled "Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party" (Report), that contains nearly 150 policy recommendations as part of a strategy to fundamentally reset the U.S.' economic and technological competition with the People's Republic of China (PRC). The Report is noteworthy because it was issued on a bipartisan basis by the Select Committee and encapsulates the growing support in Congress across the political spectrum for a stronger U.S. stance against what the committee views as unfair and adversarial Chinese economic competition.

This article summarizes the Select Committee's findings and recommendations.

Financial Regulatory Policy Recommendations

While the Report's recommendations will be of interest to a wide range of industries, they may be particularly useful to the financial sector, potentially foreshadowing the next phase in the ongoing shift in U.S. financial regulatory policy with respect to the PRC. The Select Committee has been especially focused on stemming U.S. investment in the PRC, which the Report states "creates systemic risks for U.S. financial stability" and "puts U.S. investors and

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markets at risk." The Report does not call for a complete ban on outward-bound investment to the PRC but instead recommends a series of more practical and likely more attainable policy changes, including:

■ The codification and expansion of the Biden administration's executive order ¹ on outward-bound investment to "restrict investment on a sectoral basis" and cover areas related to emerging technologies, military capabilities, and human rights abuses.
■ The adoption of legislation to require large public companies to disclose key risks related to the PRC, including "expected effects of a sudden change in market access"—specifically, "details regarding material ties to the CCP, supply chain, profit from the PRC, and the company's preparation for and ability to withstand the sudden loss of market access."
■ The adoption of legislation to require private equity firms and retirement plans subject to the Employee Retirement Income Security Act to

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