The House Select Committee on the CCP’s recent hearing about China’s economic espionage and corporate influence in the U.S. suggests the Committee is taking China corporate investment here as a potential problem. Everyone has heard of the China IP theft. That tale is now as old as time. This week, news broke that Alibaba targeted Anthropic with a distillation attack to steal Anthropic’s intellectual property. But what seems to be taking shape now is building a set of questions regarding whether or not Chinese corporate investment in some sectors of the economy are warranted.
“We don’t steal China’s technology. They shouldn’t be stealing ours,” said Ro Khanna (D-CA-17), Ranking Member of the Committee. “We don’t have economic espionage with China. They shouldn’t be having economic espionage with us.”
Chairman John Moolenaar (R-MI-2) called China IP theft an active threat, but he was more apt to include China corporate interests here as problematic. This seems to be a new framing on the China problem, domestically. Moolenaar said the Committee will examine how Chinese spycraft and business activities have accelerated in scale, intensity, and sophistication over the past decade.
“The CCP’s professed desire for constructive relations, its pursuit of so-called win-win outcomes, and its supposed respect for the sovereignty of other nations are all promises the CCP breaks,” he said.
China’s messaging continues to be one of cooperation. During the Summer Davos meeting in Dalian, China last week, Premier Li Qiang reframed the much feared “China Shock 2.0” as “China Opportunity 2.0.” Only his framing is that it is an opportunity for all. For Qiang, he wants the U.S. to think of China as a partner and not as a rival.
The problem is, the U.S. already thought that way.
China’s economic transformation took off once it joined the World Trade Organization (WTO) in December 2001. Many on Capitol Hill thought China would become one big Japan, only with cheaper labor for multinational labor arbitrage like no one has ever seen. Since then, China has orchestrated a highly strategic, highly accelerated, and multifaceted effort to steal commercial and technological secrets from the United States and other Western nations. The campaign, which blends cyber espionage, human intelligence, academic collaboration, and commercial investments, has been instrumental in propelling China’s rapid economic and military rise.
As is often the case in Committee hearings, the real stars of the show are the witnesses.
David Shedd was one of three witnesses. He is the former acting director of the Defense Intelligence Agency during the Obama administration and is the author of the book, “The Great Heist: China’s Epic Campaign to Steal American Secrets.”
Shedd talked about China’s ties to Silicon Valley and New York private equity.
“The CCP has weaponized venture capital, private equity, and academic partnerships to acquire sensitive technology, research and development, and intellectual property that it could not obtain legally,” he said. “This decentralized but highly strategic collection method, combined with theft, graft, hacking operations, has allowed China to leapfrog the West in key areas of innovation.”
China is now ahead of the U.S. in a number of space related industries, for example, according to a new report by the Information Technology and Innovation Foundation (ITIF).
One of the biggest China linkages in Silicon Valley was Sequoia Capital. They splintered off their China team and lead investors in 2024, and rebranded in China as HongShan, which means Redwood, a tree any Silicon Valley dwelling tech worker knows well. Sequoia understood the moment early.
As a result of these relationships, China start-ups have been able to bypass investment that many large A.I. companies here have done. “They don’t have to invest in that area. They can simply copy it, and leapfrog into it,” Shedd said.
The new AI platform in China, DeepSeek, was said to have trained on OpenAI coding. The hedge fund that built it acquired Nvidia chips that were later to become restricted for mainland China’s buyers. But that did not mean they could not buy them from Singapore, of course, which many of them did, legally.
Michael Lucci, Founding CEO of StateArmor, a business intelligence firm working with state governments to eliminate China’s corporate influence, gave the Committee a rundown of China’s peculiar investments here.
CCP Committee Questions Reasons Behind Some China Investment in U.S.
The House Select Committee on the CCP’s recent hearing about China’s economic espionage and corporate influence in the U.S. suggests the Committee is taking China corporate investment here as a potential problem. Everyone has heard of the China IP theft. That tale is now as old as time. This week, news broke that Alibaba targeted Anthropic with a distillation attack to steal Anthropic’s intellectual property. But what seems to be taking shape now is building a set of questions regarding whether or not Chinese corporate investment in some sectors of the economy are warranted.
“We don’t steal China’s technology. They shouldn’t be stealing ours,” said Ro Khanna (D-CA-17), Ranking Member of the Committee. “We don’t have economic espionage with China. They shouldn’t be having economic espionage with us.”
Chairman John Moolenaar (R-MI-2) called China IP theft an active threat, but he was more apt to include China corporate interests here as problematic. This seems to be a new framing on the China problem, domestically. Moolenaar said the Committee will examine how Chinese spycraft and business activities have accelerated in scale, intensity, and sophistication over the past decade.
“The CCP’s professed desire for constructive relations, its pursuit of so-called win-win outcomes, and its supposed respect for the sovereignty of other nations are all promises the CCP breaks,” he said.
China’s messaging continues to be one of cooperation. During the Summer Davos meeting in Dalian, China last week, Premier Li Qiang reframed the much feared “China Shock 2.0” as “China Opportunity 2.0.” Only his framing is that it is an opportunity for all. For Qiang, he wants the U.S. to think of China as a partner and not as a rival.
The problem is, the U.S. already thought that way.
China’s economic transformation took off once it joined the World Trade Organization (WTO) in December 2001. Many on Capitol Hill thought China would become one big Japan, only with cheaper labor for multinational labor arbitrage like no one has ever seen. Since then, China has orchestrated a highly strategic, highly accelerated, and multifaceted effort to steal commercial and technological secrets from the United States and other Western nations. The campaign, which blends cyber espionage, human intelligence, academic collaboration, and commercial investments, has been instrumental in propelling China’s rapid economic and military rise.
As is often the case in Committee hearings, the real stars of the show are the witnesses.
David Shedd was one of three witnesses. He is the former acting director of the Defense Intelligence Agency during the Obama administration and is the author of the book, “The Great Heist: China’s Epic Campaign to Steal American Secrets.”
Shedd talked about China’s ties to Silicon Valley and New York private equity.
“The CCP has weaponized venture capital, private equity, and academic partnerships to acquire sensitive technology, research and development, and intellectual property that it could not obtain legally,” he said. “This decentralized but highly strategic collection method, combined with theft, graft, hacking operations, has allowed China to leapfrog the West in key areas of innovation.”
China is now ahead of the U.S. in a number of space related industries, for example, according to a new report by the Information Technology and Innovation Foundation (ITIF).
One of the biggest China linkages in Silicon Valley was Sequoia Capital. They splintered off their China team and lead investors in 2024, and rebranded in China as HongShan, which means Redwood, a tree any Silicon Valley dwelling tech worker knows well. Sequoia understood the moment early.
As a result of these relationships, China start-ups have been able to bypass investment that many large A.I. companies here have done. “They don’t have to invest in that area. They can simply copy it, and leapfrog into it,” Shedd said.
The new AI platform in China, DeepSeek, was said to have trained on OpenAI coding. The hedge fund that built it acquired Nvidia chips that were later to become restricted for mainland China’s buyers. But that did not mean they could not buy them from Singapore, of course, which many of them did, legally.
Michael Lucci, Founding CEO of StateArmor, a business intelligence firm working with state governments to eliminate China’s corporate influence, gave the Committee a rundown of China’s peculiar investments here.
The state of Utah removed a subsidiary of Chinese owned Geely from its industrial location near a weapons testing facility in Utah.
“Our openness is a strength,” said Lucci. “But our open system cannot endure endless attacks and exploitation from state actors who do not agree with our democratic values.”
Committee members asked what economic sectors needed to be closely monitored from China investment.
Shedd said that whatever is prioritized in the Made in China 2025, which has now morphed into Made in China 2030, is a target for relationship building and investment.
“We know that within that plan, they have two very high priorities of focus: one is aerospace and the second one is biotechnology. That’s where I would monitor,” Shedd said.
Rep. Andre Carson (D-IN-7) asked Shedd and Lucci what can be done if a Chinese-owned company that presents as an American employer, lobbies state legislators, accepts economic development initiatives and is allowed to invest.
For example, last year, a Chinese billionaire named Zhong Shanshan overpaid for a 23-acre empty warehouse and industrial site in Nashua, NH. It was purchased in the name of a U.S. subsidiary of Chinese bottled water company Nongfu Spring. They own it now. The New Boston Space Force is 20 miles away. The Committee on Foreign Investment in the United States review status of Chinese-owned Nongfu Spring’s purchase of a commercial property in Nashua, New Hampshire, remains unverified. While Nongfu Spring’s attorneys claimed they secured CFIUS clearance, state and federal officials were unable to confirm any details about that review.
Nongful Springs is far from a household name. Smithfield Foods brand is not. They own the Nathan’s Famous hotdog brand. And Hong Kong-based WH Group, the world’s largest pork company, has been Smithfield’s owner for years.
“Smithfield is owned by China. Smithfield would be impacted by foreign agent registration laws at the state level,” Lucci said in response to Carson. That doesn’t mean they won’t act in their own interests. They will have no problem registering their local government relations team as representatives of a foreign entity.
Lucci used Smithfield as an example of how Chinese companies will protect their local interests, and that includes using their American staffers to go after government leaders on matters of policy.
“Smithfield issued a veiled threat to Nebraska State Senator Elliott Bostar for advancing a foreign agent bill in Nebraska last summer,” he said. “They went to his office and they talked about economic disruptions to the state if that bill were to advance.” Bostar got his way. That bill survived and became law in June 2025.
“The CCP employs a wide spectrum of incentives,” said Moolenaar. “These include commercial benefits, political access, or opportunities for personal advancement. Yet these promises often come with expectations that local officials will support China-backed initiatives, that academic partners will share research, or that community leaders will echo narratives favorable to Beijing.”
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