House Foreign Affairs Committee Chairman Michael McCaul says Congress needs to tighten restrictions on US firms’ investment in China beyond those proposed by President Joe Biden earlier this summer, as recent breakthroughs in Chinese technology have spurred debate over the effectiveness of Washington’s controls.
The Texas Republican sees a path forward that builds on two legislative efforts: imposing sanctions against individual Chinese firms and curbing spending on a sector-wide basis.
The first is a House bill that would require the president to slap sanctions on companies involved in China’s defense or surveillance efforts. McCaul also wants to strengthen a Senate-passed measure that now only requires firms to notify the government about investments in China’s high-tech sectors, including semiconductors, artificial intelligence and quantum computing.
“I think we can go down that list, sector by sector, and prohibit the sale rather than just notification,” McCaul told Bloomberg News in an interview at the Texas Tribune festival. “Put the sanctions piece in, and then we got a really strong countering-China bill.”
Biden in July issued an executive order that restricts new investments in cutting-edge technology in China. That order, which was more narrowly targeted than some in Washington anticipated, was effective in halting investments into chip, AI and quantum industries, McCaul said, but he wants to see US controls strengthened.
Read more: US Plans Narrow China Tech Investment Limits, Likely by 2024
“I’m tired of seeing our technology ripped off and being used in their weapons,” he said.
His comments come after Shenzhen-based Huawei Technologies Co. showed it has been able to partially overcome US sanctions and make tech breakthroughs. Huawei last month released a premium smartphone powered by an advanced chip that it designed, and which was made by Shanghai-based Semiconductor Manufacturing International Corp.
Huawei’s progress have led some to question whether a US-led global technology blockade targeted at China’s chip sector has failed, with McCaul and other Republican lawmakers calling for the Biden administration to completely cut off Huawei and SMIC from American suppliers.