- THE CHINA BILL
Legislation to Address China's Exploitation of U.S. Capital Markets, Economic Incentives, and Trade Policy
House Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) each have expressed their desire to move forward this Congress with a bill to prohibit U.S. capital, economic incentives, and trade preferences from benefitting China and other adversarial nations. Importantly, this legislative package would also seek to build American productive capacity to eliminate dependence on those nations, especially in industries that are critical to U.S. economic and national security. The Coalition for a Prosperous America (CPA) endorses the following legislation for inclusion in any such package.
Prohibitions on Investments
No U.S. Index or Mutual Fund Investment in Chinese Companies
Prohibits any U.S. index fund or mutual fund from including any company based in China or subject to the direction of the Chinese government or is controlled by such a company.
LEGISLATION: No China in Index Funds Act (H.R. 7758, Sherman-Spartz); (S. 4589, R. Scott)
No U.S. Investment in Securities of Companies on Chinese Domestic Stock Exchanges (“A Shares”)
Prohibits any U.S. person from performing any act in furtherance of the purchase or sale of any security listed on the Shanghai, Shenzhen, or any other mainland Chinese stock exchange, and requires the divestment of any such security within 180 days of enactment.
LEGISLATION: Stop Funding the CCP through A-Shares Act (H.R. 7476 Sec. 107 and 108; S. 4586, R. Scott)
No U.S. Investment in Securities of Sanctioned Chinese Companies
Directs the President to compile and maintain a single public list of all U.S.-sanctioned Chinese companies and their subsidiaries and affiliates and prohibits U.S. persons from purchasing, selling or holding the publicly traded securities of such companies or any “shadow entity” mirroring such a company.
LEGISLATION: PRC Military and Human Rights Capital Markets Sanctions Act (H.R. 7759, Sherman-Spartz)
No U.S. Direct Investment in High-Tech Sectors of Adversary Nations
Prohibits U.S. direct investment (e.g., private equity and venture capital) in companies in the adversary nations of China, Russia, Iran and North Korea in technology sectors threatening U.S. national security.
LEGISLATION: Prohibitions on Direct Investment (H.R. 7476 Sec. 101, introduced as H.R. 6349, Preventing Adversaries from Developing Critical Capabilities Act, McCaul, reported favorably by voice vote).
- March 5, 2024: CPA Applauds RSC China Bill Provision To Ban U.S. Investment In China A-Shares
- January 18, 2024: House Foreign Affairs Committee Considers More China Restrictions, This Time On Entire Sectors
- May 23, 2023: CPA, National Security And Foreign Policy Experts Urge Biden To Establish Mechanism To Review U.S. Outbound Investment To China
No ERISA Investment in Companies of Adversary Nations
Prohibits any U.S. index fund or mutual fund from including any company based in or subject to the direction of the government of China, Russia, Iran, or North Korea, or is controlled by such a company.
LEGISLATION: The Protecting Americans’ Retirement Savings Act (H.R. 7476 Sec. 105., introduced as H.R.4008 – Protecting Americans’ Retirement Savings Act, Banks)
Imposition of Sanctions
Imposition of Sanctions on Chinese Military and Surveillance Companies
Directs the President to impose sanctions on any foreign person determined by the Secretary of the Treasury to knowingly engage in significant operations in the defense and related materiel sector or the surveillance technology sector of the economy of the People’s Republic of China, with special emphasis on certain high-tech sectors listed in the bill.
LEGISLATION: Sanctions Re Communist Chinese Military and Surveillance Companies (H.R. 7476 Sec. 102.)
Matters Related to U.S. Securities and Exchanges
No U.S. IPO and Listing of Sanctioned Chinese Companies
Prohibits companies on U.S. Government ‘blacklists’ from being allowed to IPO and list their securities on U.S. exchanges.
LEGISLATION: TRADE SAFE Act (S. 4590, R. Scott)
Public Companies to Report “China Risk”
Requires public companies on U.S. exchanges that are filing an annual report to include in such report a description of “China Risk”, and a narrative description of actions the company has taken or will take to minimize China risk (e.g. a PRC blockade or invasion of Taiwan).
LEGISLATION: China Risk Reporting Act (H.R. 7757, Sherman-Spartz)
Investment Advisors to Report Total Fund Assets Located in Adversary Nations
Requires private advisors to private equity funds to annually report to the SEC the total private fund assets attributable to the private funds advised by the advisor that are located in China, Russia, North Korea or Iran).
LEGISLATION: Disclosing Investments in Foreign Adversaries Act of 2024 (H.R. 7476 Sec. 106; S. 3286, Casey)
No Clean Energy Tax Credits for Companies of Foreign Adversary Countries
Blocks all Inflation Reduction Act clean energy tax credits for any company related to China, Russia, Iran, or North Korea.
LEGISLATION: No Official Giveaways of Taxpayers’ Income to Oppressive Nations (GOTION) Act (H.R. 6175, Moolenaar-LaHood)
- June 10, 2024: China EV Battery Giants’ Supply Chains Full Of ‘Forced Labor’, Says House CCP Committee
- April 18, 2023: Chinese Manufacturers Could Earn Up To $125 Billion In U.S. Renewable Energy Tax Credits
No IRA “45X” Clean Energy Production Credits for Chinese Companies
Blocks Inflation Reduction Act “45X” clean energy production tax credits for any company related to China, Russia, Iran, or North Korea.
LEGISLATION: Protecting American Advanced Manufacturing Act (H.R. 6762, Miller; S. 3486, Rubio)
No Federal Funds for Purchasing Chinese Solar Panels
Prohibits use of federal funds for procurement of solar panels manufactured or assembled in China.
LEGISLATION: Keep China Out of Solar Energy Act of 2023 (S. 968, R. Scott)
No Federal Purchases of Biotechnology from China or other Adversaries
Prohibits federal agencies from purchasing or using biotechnology equipment or services from a biotechnology company connected to China or another adversary country, specifically including BGI, MGI, Complete Genomics, WuXi AppTec, and any subsidiary, parent affiliate, or successor of such entities.
LEGISLATION: BIOSECURE Act (H.R. 8333, Wenstrup; S. 3558, Peters)
Public Companies to Report China Ties and Risk
Require public companies to disclose what percentage of their revenue, profit, capital investment, and supply chain is tied to the PRC, their relationships with the CCP and with companies identified by the U.S. government as national security threats or human rights violators, and an assessment of what a geopolitical conflict with China would mean for their business. Also directs investment firms to disclose their holdings of and exposure to certain Chinese securities.
LEGISLATION: PRC Risk Transparency Act (H.R. 9162, Luetkemeyer, Moolenaar, and Newhouse)
Revocation of Most Favored Nation (MFN) Status for China
Withdraws “most favored nation” tariff treatment from China and imposes “Column 2” rates or such higher rates as the President may establish.
LEGISLATION: Ending Normal Trade Relations with China Act of 2023 (S. 906, Hawley); China Trade Relations Act of 2023 (S. 125, Cotton; H.R. 638, C. Smith)
- December 18, 2023: Economic View: Revoke China MFN Status Now
- September 27, 2023: Repealing China’s Most Favored Nation Status Would Create 2 Million Jobs, Grow U.S. Economy By 1.75%
- January 11, 2023: Repealing China’s Most Favored Nation Status: A Guide
Closing the “De Minimis” Customs Loophole
Excludes from “de minimis” treatment articles imported from China and any other country that is a nonmarket economy and is on the “priority watch list” for intellectual property theft. De minimis treatment allows imported articles valued under $800 to enter the United States without paying duties or taxes.
LEGISLATION: Import Security and Fairness Act (H.R. 4148, Blumenauer-Dunn; S. 2004, Brown-Rubio)
Prosecuting International Trade Crimes
Combating international trade crimes by enhancing U.S. capabilities for detecting, investigating, and prosecuting trade fraud, duty evasion, transshipment, and other trade-related crimes.
LEGISLATION: Protecting American Industry and Labor from International Trade Crimes Act of 2024 (H.R. 9151, Hinson-Moolenaar-Krishnamoorthi)
Requiring Federal Agencies to Purchase U.S.-Made Generic Drugs
Reduces dependency on China by requiring federal health programs to purchase American-made generic drugs.
LEGISLATION: AMERICAN DRUGS Act (S. 2683, R. Scott)
- March 21, 2024: Surge In Pharmaceutical Imports Threatens U.S. National Security As India/China Dominance Grows
- February 5, 2024: New CPA Report: Aurobindo, Largest Generic Drug Provider To U.S. Market, Has Substantial Ties To Sanctioned CCP Companies
- January 25, 2024: Study Finds Over 90% Of All Generic Drugs Dependent On Imports
Providing Incentives for Rebuilding the American Generic Drug Industry
Provides tax incentives for U.S. manufacturers of generic drugs to address China’s dominance in the production of active pharmaceutical ingredients for essential generic medicines.
LEGISLATION: PILLS Act (H.R. 6109, Tenney)
Providing Incentives for Consumers to Buy Products Made in the USA
Supports U.S. manufacturing jobs by providing a refundable tax credit for purchases of products meeting the FTC “Made in USA” standard.
LEGISLATION: Made in the USA Act (H.R. 7458, Khanna-Dingell)
- March 13, 2024: CPA Applauds Dingell, Khanna Made In The USA Legislation
Empowering Consumers to Choose Products Not Made in China
Requires sellers of imported products online to conspicuously disclose the country of origin of the products and the country where the seller’s principal place of business is located.
LEGISLATION: COOL Online Act (S. 1421, Baldwin)
