A push to limit U.S. funding for China’s military and strategic sectors is close to becoming law, following the inclusion of extensive foreign investment restrictions in the National Defense Authorization Act (NDAA).
The House recently approved a significant $900 billion defense bill, which is now set to be voted on by the Senate next week before it goes to President Trump. Proponents of these foreign investment restrictions, such as Republican Rep. Andy Barr from Kentucky, refer to it as “the strongest framework in history” aimed at safeguarding American money and enhancing national security.
“This bill elevates President Trump’s America First investment approach and sends a clear warning to the Chinese government,” Barr stated. He highlighted the Foreign Investment Guardrails to Help Stop China (FIGHT) Act, part of the House’s NDAA version. “Congress is making it clear: We don’t need any American funds supporting the Chinese Communist Party in developing weapons for our military or other products that could endanger U.S. citizens.”
If these provisions are enacted, they would prohibit U.S. investments in sensitive Chinese technologies and require domestic firms to inform the Treasury Department about specific transactions in China. Additionally, the Treasury Secretary would gain the authority to sanction Chinese companies connected to the Chinese military or intelligence services.
Lawmakers had attempted to incorporate similar measures into the defense spending bills for 2023 and 2024 but faced obstacles, especially from then Chairman of the House Financial Services Committee, Republican Rep. Patrick McHenry of North Carolina, who argued that U.S. private investment should not undermine China’s state control.
This current initiative is receiving broad bipartisan support, especially from those concerned about China’s growing influence. They point out that billions from American investments have benefited key Chinese tech companies linked to the military and the government’s repressive activities against Uyghur Muslims.
In 2023, leading U.S. financial firms, including BlackRock, reportedly invested $6.5 billion in 63 Chinese firms blacklisted for supporting the Chinese Communist Party’s military actions and human rights violations.
The investment limitations would also apply to countries perceived as hostile to the United States, like Iran and North Korea.
Chairman Mike Johnson remarked, “President Trump has emphasized that years of investment enabling Communist China’s aggression must come to an end,” asserting that implementing these restrictions is essential for protecting national security and economic strength.
Republican Sen. John Cornyn from Texas expressed his satisfaction that the Senate version of the War on China Act is progressing. He noted, “This landmark legislation imposes prohibitions and mandates notifications for U.S. investments in select technologies in concerning nations, ensuring American innovations do not end up in the hands of adversaries.”
Florida Republican Rep. Brian Mast also deemed the bill a “major win” for national security, aiming to prevent American investors from contributing to China’s military capabilities.
Support for the investment restrictions also comes from some Democrats, including Senator Elizabeth Warren of Massachusetts, a co-sponsor of the Senate bill. She described it as a vital step for maintaining the United States’ leadership in advanced technologies.
Additional wins for proponents of a tougher stance on China in the NDAA involve a biosecure law that would limit federal contracts with biotech firms linked to foreign adversaries, particularly China. This provision had previously been sidelined due to strategic considerations relating to jobs within specific districts.
Despite the House’s passage of the bill, it faced criticism from several Republican lawmakers who took issue with its provisions for increasing security assistance to Ukraine and other countries, omitting bans on central bank digital currencies, and introducing DEI-related regulations.
