Senators aim to protect U.S. from financial threat of Chinese Communist Party

U.S. Sen. Mark R. Warner of Virginia joined by U.S. Sens. Mike Rounds of South Dakota and Cynthia Lummis of Wyoming in introducing the China Financial Threat Mitigation Act of 2024.

The legislation is aimed at shoring up America’s response to financial threats stemming from the Chinese Communist Party (CCP). Companion legislation, introduced by U.S. Reps. Abigail Spanberger of Virginia and Roger Williams of Texas, passed the House of Representatives in 2023.

The China Financial Threat Mitigation Act would require deeper analysis of potential financial threats from the CCP that may have substantial impacts on the U.S. economy.

“As the Chinese Communist Party continues to ramp up aggression towards the United States, it is crucial that we take proactive steps to protect U.S. institutions and interests, and our financial sector is no exception,” Warner said. “This bipartisan legislation takes the first step towards ensuring that the U.S. is prepared to counter the threat posed by the CCP by shoring up our financial systems.”

The legislation would also require the Department of the Treasury, in consultation with the Federal Reserve, U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and State Department, to issue a report on the exposure of the United States to the threats posed by China‘s financial sector.

The required report must include:
·Effects the reforms to China‘s financial sector have on U.S. and global financial systems;
·Description of the policies the United States is adopting to protect U.S. interests;
·Description and analysis of any risks presented by China to the financial stability of the United States and the global economy; and
·Recommendations for additional actions to strengthen international cooperation to mitigate risks and protect U.S. interests.

“Despite four decades of promised liberalization, the Chinese Communist Party retains the ability to intervene decisively in China’s banking system to achieve desired outcomes – a reality that poses potential risks to American businesses. To counter this, we need a clear understanding of how China‘s financial sector impacts the U.S. economy and global financial systems. Our legislation tasks the Treasury Department, working with other federal agencies, to assess and report on U.S. exposure to China’s financial activities, providing a clearer picture of the threat,” Rounds said.

Lumis added that the CCP poses “a significant threat to our national and financial security, and we have a responsibility to hold the CCP accountable. I am partnering with my colleagues to protect U.S. interests for the sake of not only our financial system but the global economy, and I look forward to getting this bipartisan legislation across the finish line.”

Spanberger is a former CIA case officer and currently a member of the House Intelligence Committee.

“Congress must do more to strengthen America’s response to emerging financial threats from the Chinese Communist Party. Our bipartisan, bicameral legislation would help protect America’s economic interests and improve coordination with our international partners. I’m encouraged by our legislation’s momentum in the U.S. Senate, and I look forward to seeing it sent to the president’s desk to be signed into law,” Spanberger said.