WASHINGTON, D.C. – U.S. Senators Elissa Slotkin (D-MI), John Cornyn (R-TX), Catherine Cortez Masto (D-NV), Jim Banks (R-IN), Pete Ricketts (R-NE), Michael Bennet (D-CO), Bill Hagerty (R-TN), Andy Kim (D-NJ), Dave McCormick (R-PA), Chuck Schumer (D-NY), and Dan Sullivan (R-AK), along with Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA), introduced the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act. The legislation would safeguard the United States’ national security against the growing threat posed by the People’s Republic of China (PRC) by prohibiting and requiring notification of U.S. investment in certain technologies in China. The legislation is also cosponsored by Senator Bill Hagerty (R-TN).
“It’s simple — no more helping China produce the tech they could use against us,” said Senator Slotkin. “This legislation cuts off U.S. investments into certain industries and technologies controlled by the Chinese Communist Party and allows us to hit bad actors with tough sanctions. We must protect American innovation and keep our national security strong.”
Background:
The Foreign Investment Guardrails to Help Thwart (FIGHT) China Act would permit the Secretary of the Treasury to prohibit U.S. investments in certain technologies in the People’s Republic of China (PRC), including certain Artificial Intelligence (AI) models, quantum computers, materials used in hypersonic systems, and other military technologies. It would also require U.S. entities to notify the U.S. Department of the Treasury of investments in certain AI models in the PRC. Lastly, the legislation would permit the Secretary of the Treasury to impose sanctions under the International Emergency Economic Powers Act (IEEPA) against PRC entities that engage with the PRC military and intelligence sectors.
Specifically, the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act would cover the following investments:
- Acquisitions, including of limited partners, equity interest, property, or other assets;
- Loans and debt financing;
- Joint ventures;
- And equity interest or debt conversions.
The legislation would establish exemptions for:
- Transactions determined to be de minimis or in the national interest;
- Investments in securities, derivatives of securities, or made as a limited partner in a venture capital fund, private equity fund, fund of funds, or other pooled investment fund;
- Ancillary transactions undertaken by a financial institution;
- Acquisitions of entire assets or entities located outside the PRC;
- Certain transactions secondary to a covered national security transaction;
- And certain ordinary or administrative business transactions.
The legislation would prohibit covered investments in the PRC for development or production of:
- Certain advanced integrated circuits;
- Certain AI models capable of a high number of operations;
- Quantum computers and supercomputers;
- Materials or components for hypersonics; and
- Any of these technologies that are on the Munitions List, intended for use with nuclear equipment or facilities, or emerging technologies subject to export controls.
Lastly, the legislation would require U.S. persons to notify the U.S. Department of the Treasury within 14 days when making a covered investment in the PRC for the development or production of:
- Any non-prohibited integrated circuit;
- And any non-prohibited AI system which is used for military, surveillance, cybersecurity, penetration, forensics, or robotic system use or which meets a certain computing standard.
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