Former U.S. officials urge Congress to enhance Biden’s China investment order

WASHINGTON (Reuters) – A bipartisan group of former senior U.S. national security officials urged Congress on Wednesday to dedicate resources to President Joe Biden’s recent order restricting some outbound U.S. investment to China, calling it a top priority.  

Twenty-one veteran officials – including former deputy national security advisor during the Trump administration Matt Pottinger, and Colin Kahl, who stepped down in July as undersecretary of defense for policy – sent a letter to congressional leaders, calling the order “a positive step in the overdue process of limiting adversaries’ access to American capital.”

“The United States must ensure that [China] and other foreign adversaries aren’t able to use our financial dynamism and openness against us in ways that continue to threaten our national security and prosperity,” they wrote in the letter seen by Reuters, sent to Democratic Senate Majority Leader Chuck Schumer and Republican House Speaker Kevin McCarthy.

The further development of outbound investment transparency and review should be “among your top foreign policy priorities”, they wrote, calling it essential that Congress commit resources to implementation.

Biden’s order, issued last week but expected to be implemented next year, is aimed at preventing American capital and expertise from helping China develop technologies that could support its military modernization and undermine U.S. national security.

It authorizes the U.S. Treasury secretary to prohibit or restrict U.S. investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

Peter Harrell, a former Biden National Security Council official, and former commanders of the U.S. Indo-Pacific Command Harry Harris and Philip Davidson, were among the other officials who endorsed the letter.

China has said it is “gravely concerned” by the order, though some U.S. lawmakers have criticized it as having too many loopholes.

(Reporting by Michael Martina; Editing by Sharon Singleton)