King, Colleagues Urge Armed Services Committee Chairmen to Combat China’s Tech Threat Through 2024 Defense Act

WASHINGTON DC – US Senator Angus King (I-Maine) is urging congressional leaders to prevent global adversaries such as the People’s Republic of China (PRC) from acquiring sensitive US technologies. In a letter to the chairs and ranking members of both the Senate and House Armed Services Committees, King and his colleagues strongly urge leaders to include clear, bold language in the 2024 National Defense Authorization Act (NDAA) to address the threat to the national security. in that US sensitive technologies with dual-use applications are acquired by China through the investments of American companies.

“There is strong bipartisan consensus in both the US Senate and the US House of Representatives that Congress must act to address the national security threat posed by these outbound investments,” the senators wrote. “We have known for some time that American companies are sending capital, intellectual property and innovation to China, fueling the country’s advances in critical dual-use technology areas. To protect our national security, the United States needs visibility into our vulnerabilities by at a minimum, to require notification of sensitive investments by American companies in these countries.”

“However, none of the tools currently available to the government fully address the specific risk associated with the transfer of American capital and know-how to our adversaries,” added the senators. “To protect our interests, we need to evaluate the full extent of our vulnerabilities and use data and insights from outbound investment screening to implement tools that ensure sensitive technologies with dual-use applications are not disclosed to adversaries.”

On the Senate side, the letter is signed by Senators Dan Sullivan (R-Alaska), Jacky Rosen (D-Nev.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Joni Ernst (R-Fla. -Iowa), Kevin Cramer (RN.D.), Debbie Stabenow (D-Mich.), John Fetterman (D-Penn.), Tommy Tuberville (R-Ala.), Tammy Baldwin (D-Wisc.), Gary Peters (D-Mich.), Michael Bennet (D-Colo.), Bob Casey (D-Penn.), John Cornyn (R-Texas), Pete Ricketts (R-Neb.), Jeanne Shaheen (DN.H. ), Chris Van Hollen (DM.D.) and Mark Kelly (D-Ariz.).

A member of the Senate Select Committee on Intelligence and the Senate Armed Services Committee, Senator King is recognized as a thoughtful voice on national security and foreign policy issues. In addition, Senator King is seen as a national leader in combating threats from technology, having served as co-chair of the Cyberspace Solarium Commission – which has seen dozens of recommendations become law. Most recently, he introduced bipartisan legislation to better evaluate national security threats from China. Earlier this year, he introduced bipartisan legislation to establish a commission tasked with developing a comprehensive, whole-of-government approach to how the United States should deal with the economic, security and diplomatic challenges posed by China.

The letter can be found here and below.

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Dear Chairman Reed, Ranking Member Wicker, Chairman Rogers and Ranking Member Smith:

We are deeply concerned about the potential national security threats that capital outflows and knowledge transfer pose to America’s adversaries, particularly the People’s Republic of China (PRC). To that end, we are writing and urging you to ensure that language addressing outbound investment in certain sectors in foreign countries that raises concerns is included in the National Defense Authorization Act (NDAA) of 2024, ideally strengthening the language .

On July 25, 2023, the Senate voted overwhelmingly (91-6) to include Amendment No. 931 in the NDAA, which would establish an outbound investment screening program led by the U.S. Treasury Department in coordination with the U.S. Department of Commerce. It requires US entities to notify the US government of investments and activities in specific technology sectors in countries of concern.

There is strong bipartisan consensus in both the US Senate and the US House of Representatives that Congress must act to address the national security threat posed by these outbound investments. The administration is also focusing on the problem. On August 9, 2023, the President issued an executive order (EO 14105) titled Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern, which attempted to address this same set of issues. In fact, the EO goes beyond notification to consider a ban on investment in some sectors.

We have known for some time that American companies are sending capital, intellectual property and innovation to China, fueling the country’s progress in critical dual-use technology areas. To protect our national security, the United States needs visibility into our vulnerabilities by, at a minimum, requiring notification of sensitive investments by American firms in these countries.

Outbound investment screening will fill a gap in our ability to combat this growing national security threat. This is not new or a threat to America’s outward looking economy. The United States has deployed a number of tools to protect against technology theft by our adversaries, including export controls, sanctions, and screening of inward foreign investment, even though it remains one of the most open economies in the world.

However, none of the tools currently available to the government fully address the specific risk posed by the transfer of US capital and know-how to our adversaries. To protect our interests, we need to evaluate the full extent of our vulnerabilities and use the data and insights provided by outbound investment screening to implement tools that ensure that sensitive technologies with dual-use applications are not disclosed to adversaries .

The last thing we should do is facilitate technology that could one day be used against us, either through espionage at home or against our servicemen and women deployed to fight for their nation.

In the interest of America’s national security, we urge you to ensure that robust language addressing the threat of outbound investment in countries like China is included in the 2024 NDAA, which goes to the President for his signature.

With best regards

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