Select Committee on CCP Explores How to Protect American Investors and Markets from CCP Risks at New York City Field Hearing

WASHINGTON, D.C. – Yesterday, the House Select Committee on the Strategic Competition Between the U.S. and the CCP held a field hearing in New York City to highlight the risks posed by the Chinese Communist Party to American investors and markets, and steps Congress can take to mitigate those risks and protect the American people.

Members of the Select Committee, led by Ranking Member Raja Krishnamoorthi (D-IL) and Chairman Mike Gallagher (R-WI), listened to testimony provided by Jay Clayton, former chair of the U.S. Securities & Exchange Commission, and Anne Stevenson-Yang, founder of J Capital Research.

Click here for a full video of the hearing.

A full transcript of Ranking Member Krishnamoorthi’s remarks can be found below. Video of his opening statement, first questioning, second questioning, and closing statement can be found at the corresponding links.

Mr. Chairman, just a couple of weeks ago we were in Stoughton, Wisconsin. Just a few weeks before that, we were in Dysart, Iowa. Today, we’re here in New York City.  

Over the past six weeks that we’ve traveled the country, we’ve seen a dominant theme emerge: the CCP has taken aggressive steps to advance its economic interests at the expense of American ones. Doing nothing in response to the risks posed by the CCP’s economic aggression is not an option. 

These risks harm people in the smallest towns and biggest cities, they threaten industries from the corn and soy fields of Iowa to the factories of Wisconsin to the trading floor of Wall Street. They are risks realized through IP theft and forced technology transfer, by unfair trade and industrial policy, and by a military-civil fusion system that takes American dollars and uses them to fuel military aggression and human rights abuses.  

When we were in Iowa, we asked what we could do to better protect our farmers and the IP that helps to feed the world. When we were in Wisconsin, we asked what we could do to better protect our job creators who help to create paths into the middle class. And now here in New York, the world’s financial capital, it’s important that we ask what we can do to better protect Americans’ money and the global financial system.  

Let’s use the federal government’s Thrift Savings Plan as an example. As reported by Newsweek earlier this summer, more than 115 mutual funds in the TSP contain more than 20 sanctioned or watch-listed PRC companies or their subsidiaries.¹  

These companies make, among other things, fighter aircraft and ship engines for the People’s Liberation Army and pose a direct national security risk. They also use Uyghur forced labor to produce textiles, clothing, household electronic goods and medicines. By investing in these companies, we risk supporting the CCP’s military aggression and human rights abuses.  

But that’s not the only risk facing American investors from the CCP.  As of January 2023, there were more than 250 Chinese companies listed on U.S. stock exchanges with a total market cap of over $1 trillion. These are stocks that Americans are investing in everyday; but they don't come with what most Americans consider to be standard investor protections. Their complicated corporate structures carry massive risk, all while the CCP is cracking down on the very act of disclosing risks. 

The CCP is doing this by cracking down on due diligence to the point where the U.S. Chamber of Commerce has said that, “risk can’t be properly assessed.”³ The CCP is so afraid of bad news getting out that they’ve stopped publishing their skyrocketing youth unemployment numbers and instructed investment banks to avoid publishing politically sensitive data that could make the Chinese economy look bad. 

It’s no wonder that just a couple of weeks ago, U.S. Secretary of Commerce Gina Raimondo said that according to some business leaders, “China is uninvestable because it’s become too risky.”

It’s our job, on this select committee, to make sure that our constituents face less risk and see more certainty. It’s our job to make sure that in the same way your food supply and your jobs are protected from harmful CCP policies, that your money is protected too.  

It’s why we’ve acted as a committee to launch a bipartisan investigation into American venture capital firms supporting Chinese AI, semiconductor, and quantum computing companies, as well as asset managers and index providers helping to direct capital to red-flagged companies that violate human rights and strengthen the Chinese military.

It’s also why I believe the Biden Administration has taken critical and positive steps to address these problematic outbound investments; steps that deserve our support and legislative action to strengthen them.  

The stakes for our families – from Iowa to Wisconsin to New York – are simply too high. They are too high to ignore. And they are too high for us to settle on a path of inaction.  

I look forward today to hearing from our witnesses about what we can do to address these risks and protect the interests of the American people.  

Thank you, and I yield back the balance of my time. 

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