House panel demands US ‘stop digging our own grave,’ detach from China

WASHINGTON – The House Select Committee on the Chinese Communist Party (CCP) called on American companies and lawmakers Tuesday to ditch the decades-old strategy of playing nice with China economically, issuing 150 recommendations aimed at making America less reliant on its top adversary.

“Never before has the United States faced a geopolitical adversary with which it is so economically interconnected,” the committee said in its latest report. “Addressing this novel contest will require a fundamental reevaluation of US policy towards economic engagement with [China.]”

For more than 20 years, the US has employed a strategy of “robust economic engagement” in the hopes that the CCP would “open its economy and financial markets and in turn to liberalize its political system and abide by the rule of law,” the report said.

However, “those reforms did not occur,” and the Chinese government instead launched a “multidecade campaign of economic aggression against the United States and its allies.”

“For the past two decades, [China] has strategically decoupled from the United States, reducing its own dependence on the world while increasing the America’s dependence on [China,]” the report said. “In response, the United States must now chart a new path that puts its national security, economic security, and values at the core of the U.S.-[China] relationship.”

Members of the committee hope the recommendations – which span from banning TikTok to pushing federal health systems like Medicare to “buy American” – will end up in bipartisan legislation as soon as next year, said Ranking Member Raja Krishnamoorthi (D-Ill.).

The select committee, formed in January and chaired by Rep. Mike Gallagher (R-Wis.), has been heralded for its rare level of bipartisanship. The report represents the culmination of the group’s work during its first year of existence.

“It’s rare to get agreement in Washington, DC right now on anything, let alone 150 recommendations,” Gallagher said. “That’s not to say everyone got what they wanted, but I think the report shows you can have principled compromise without compromising your principles.”

Key recommendations

The recommendations are centered around three themes: “reset, prevent and build.” That means making adjustments to current US-China engagement, as well as protecting and investing in American innovation, Gallagher said.

“We need to reset our economic relationship with China, we need to prevent American capitalist technology from enabling [Chinese military] advances and CCP human rights abuses … and build collective resilience in our supply chains along with allies and partners,” he said.

Much of the report calls for “immediately” shutting down the flow of American technology and dollars to assists China’s military modernization and human rights abuses, such as slave labor.

“The United States must change course,” the report said. “To quote Dr. Eric Schmidt’s remarks at [a] Select Committee hearing … ‘it’s never too late to stop digging our own grave.’”

The committee has made numerous inquiries into China’s use of American technology against the US – particularly after discovering that Beijing had relied in part on accessing or exploiting US intellectual property to spy on Americans from its surveillance base in Cuba.

“[China President] Xi [Jinping] has made plain his intent to ‘resolutely win the battle of key and core technologies’ and build the [Chinese military] into a ‘great wall of steel,’” the report said. “At present, US capital, technology, and expertise aid that effort.”

The report recommends legislation to allow the president to ban any national security-related technology “owned, controlled, or developed by a foreign adversary” from being sold in America.

“These technologies should include but not be limited to quantum computing, biotechnology, artificial intelligence, autonomous systems, and surveillance technology,” the committee recommended.

The presidential authority would not extend to controversial Chinese-linked consumer products and services such as TikTok – which Congress has been debating since former President Donald Trump attempted to ban the Chinese-linked platform in 2020

However, the committee called for addressing the issue in separate legislation that would “force divestment of … or ban foreign adversary-controlled social media platforms like TikTok” from the US.

Additionally, the report also focuses its recommendations on supporting American innovation in technology and science – with the goal to keep the US competitive with a rapidly advancing China.

For example, it calls for funding key US research institutions – including National Science Foundation, National Institute of Standards of Technology and the Department of Energy’s Office of Science – to study technologies that affect US national security and supply chain security.

“As we as we try to defend ourselves from China, it’s important that we increase our collaboration, economic and technological within the free world,” he said.

What’s at stake

Rather than over-optimistic goals, Gallagher said the report represents “a blueprint for not just how we de-risk from China, but how we can turbocharged the American economy for decades to come.”

“Having watched [China] break the rules for two decades and [having] really done nothing about it, seeing the consequences in terms of deindustrialization domestically and intellectual property,” he said. “We’re just sort of recognizing that reality and putting forward a series of recommendations on how we can better defend ourselves.”

The committee’s main prerogative with the report is to support investment inside the US to allow the nation to break free from its widespread economic reliance on China.

It comes after the lawmakers participated in a tabletop exercise this summer, which found such dependence would come at great cost to Americans should conflict with Beijing break out – and that the US must “reduce its dependence on [China] in critical sectors, address [its] penetration of US capital markets and build greater collective resilience with allies and partners.”

Held in New York with military experts and commercial and financial executives, the exercise simulated ways the US could respond economically and financially should China invade Taiwan.

“During the exercise, the participants sought to deter [Chinese] action through sanctions and financial punishment but soon discovered that, given our significant dependence on and financial entanglement with the [People’s Republic of China], actions during the heat of a crisis could carry tremendous costs to the United States,” the report said.

Illustrating the connections between US corporations and the Chinese government, Gallagher pointed to an event with Xi last month hosted by the US-China Business Council and the National Committee on US-China Relations that sold $40,000 tickets for American corporate executives to sit at the dictator’s table during his trip to San Francisco.

“For me, the prospect of the $40,000-a-head Xi Jinping dinner hammered home the point that I think Congress needs to act,” he said, “and we should step up to the plate and have a real strategy.”