US Bankrolling Beijing’s Ambitions: Concerning National Security Implications

US Bankrolling Beijing’s Ambitions: A Critical Examination

The United States can no longer afford to prioritize short-term financial gain over national security. For decades, American capital has helped fuel China’s growth, supporting an economy that has rapidly modernized its industries and strengthened its military. American investments, estimated at over $68 billion in Chinese markets, are inadvertently empowering the Chinese Communist Party. This creates a perilous situation where we finance an adversary that poses an existential threat to our national security.

Strategic Risks of Investments in China

• American investors are exposed to opaque Chinese markets governed by tight state control.
• Variable Interest Entities add further risk as they could be outlawed at any time.
• Crackdowns on due diligence amplify mismanagement and fraud risks.

Urgent Legislative Action Needed

While the Biden administration's executive order on outbound investments is a step forward, it fails to comprehensively address the breadth of China’s ambitions. Immediate, decisive action by Congress is essential to restrict U.S. capital flow across critical sectors vital to China’s strategic goals. A total of $40.2 billion from U.S. investors directed toward AI companies linked to military applications further complicates the situation.

The Path Forward

A robust federal framework is essential to protect Americans from financial loss and reduce exposure to high-risk Chinese investments. By proactively establishing restrictions, we can prevent adversarial nations from leveraging U.S. capital against our interests and begin a new phase of domestic renewal.