China Select Committee Chair Pushes More Constraints on Outbound Investment, Chip Exports

He insisted such policies are "common sense," not isolationist. “Those aren’t closing ourselves off,” he said at a Heritage Foundation event. “They’re about ensuring America isn’t subsidizing or facilitating our own decline.”

Moolenaar said he’s “optimistic” Congress will pass the Foreign Investment Guardrails to Help Thwart China Act, or Fight China Act, which would codify and expand upon a Biden administration rule that created new prohibitions and notification requirements for certain U.S. investments in China (see 2410280043 and 2503240014). There is “legislation that’s been introduced both in the House and the Senate side, and I’m optimistic we’ll move that forward,” he said.

Although he has criticized U.S. banks for participating in an initial public offering of Chinese electric vehicle battery producer Contemporary Amperex Technology Co. Ltd. (CATL), which has ties to China’s military and slave labor (see 2504180007), he said the U.S. government currently has no mechanism to block the banks’ participation in the IPO.

“We can say, ‘Hey, that’s really the wrong thing to do, it’s not good for our country,’” he said. “You can question what people are doing, but they would say, ‘We’re simply following the law,’ so we need outbound investment legislation that clarifies it.”

Offered by Rep. Andy Barr, R-Ky., and Sen. John Cornyn, R-Texas, the Fight China Act would expand upon the Biden-era rule by covering more AI models and by adding hypersonic and related aerospace technologies. It would also authorize the president to impose sanctions on Chinese entities connected to China’s military and intelligence apparatus.

Moolenaar said Congress also needs to pass the Chip Security Act, which is intended to prevent the diversion of AI technology to China (see 2507080001). The bill would require export-controlled advanced computing chips to contain location verification mechanisms.

While some technology policy experts have argued that a chip location mandate would be difficult to implement (see 2507170040), Moolenaar believes otherwise. “The technology exists where you’d be able to, through geolocation, … track where that ends up to prevent this kind of transnational shipment,” he said.

He reiterated his opposition to the Trump administration’s decision to allow U.S. semiconductor firm Nvidia to sell its previously restricted advanced H20 chips to China (see 2507180033). He’s concerned the H20 could help China catch up to the U.S. on AI. “They aren’t the highest-end chips, but they’re vastly better than what China was able to do,” he said. The Trump administration has taken a different view, saying Chinese manufacturers already produce an equivalent chip (see 2507150013).

In other comments, Moolenaar called for continuing the Australia-U.K.-U.S. (AUKUS) security partnership, which began under the Biden administration, saying it will allow “like-minded countries” to “find ways to share resources, share burdens and work together.” The Defense Department recently launched a review of AUKUS, sparking concern among Democratic lawmakers that the Trump administration may be preparing to end the partnership (see 2506130048). Moolenaar said he does not know what the outcome of the review will be.

While American allies in Europe may be tempted to increase their economic ties with China amid trade tensions with the U.S., Moolenaar urged them to be wary, saying China has given Russia the means to continue its war against Ukraine, such as by buying Russian energy and providing drone parts. "If it wasn't for China, Russia would not have the resources to fight this war," he said.

At the same time, he believes some European countries, such as the Netherlands, deserve praise for working with the U.S. to restrict exports of advanced technology to China. "Other countries are partnering with us more on this area, and I think we need to do more," he said.