U.S.-China Economic and Security Review Commission Issues Report to Congress
Last week the U.S.-China Economic and Security Review Commission (USCC), the bipartisan Commission, established by Congress to analyze the economic and national security relationship between the U.S. and China, released its Sixth Annual Report to Congress.
The lengthy report (which one commissioner called "a cure for insomnia"), contains 45 specific recommendations to Congress for further action. The following is a summary of some of the more important trade and national security recommendations:
- In order to prevent the proliferation of weapons technology, the USCC recommends that Congress urge the administration to enhance its cooperation with China in strengthening export control and border control programs and in improving the capacity of Chinese officials to implement those programs.
- Congress should assess the adequacy of and, if needed, provide additional funding for military, intelligence, and homeland security programs that monitor and protect critical American computer networks and sensitive in formation, specifically those tasked with protecting networks from damage caused by cyber attacks from China.
- Congress should assess the security and integrity of the supply chain for computer equipment employed in those government and contractor networks—particularly those used by the Department of Defense—and, if necessary, provide additional funding to ensure the acquisition of equipment from trustworthy sources.
- Congress should urge the administration to employ more aggressively all trade remedies authorized by WTO rules to counteract the Chinese government’s practices and recommends that Congress urge the administration to ensure that U.S. trade remedy laws are preserved and effectively implemented to respond to China’s unfair or predatory trade activities so as to advance the interests of U.S. businesses.
- Congress should enact legislation that will ensure an effective response to China’s currency manipulation.
- Congress should create enforceable disclosure requirements regarding the investments in the United States of all foreign sovereign wealth funds and other foreign state-controlled companies and investment vehicles. Such disclosure requirements, embodied in law or regulation, should include but not be limited to holdings in any public or private company, hedge fund, private equity fund, investment partnership, and/or investment vehicle.
- Congress should monitor the implementation and application of the Foreign Investment and National Security Act of 2007 and other appropriate laws and regulations with respect to the possibility of China’s sovereign wealth funds acting in concert with other Chinese government-controlled companies and/or investment vehicles in a manner that technically fails to activate the established CFIUS review process.