Letter to Steven Mnuchin, Secretary of the Treasury - Protect U.S. Jobs as Treasury Reviews Chinese Investments

Letter

Dear Secretary Mnuchin,

We are writing with great interest in the Section 301 investigation for Intellectual Property abuses regarding China. According to reports, the U.S. government will enact restrictions on Chinese investments as a result of the Section 301 investigation. As part of your efforts, we urge you to take action to review all Chinese investment in the U.S. for its long-term economic impact.

Foreign direct investment (FDI) has created many jobs in the United States during the last several decades; however, the rise of new investment from the governments of foreign countries through state-owned enterprises (SOEs) raises new questions about the role of FDI in the U.S. economy. The Chinese government has shown through its acquisitions of companies such as Smithfield Foods, Terex Corp, and General Electric Appliance Business that it is purchasing U.S. businesses with the intent of gaining U.S. market share and access to technology that they can replicate in their country. Publicly traded companies cannot compete on a level playing field with their government-sponsored counterparts because SOEs enjoy a lower cost of capital and the full financial backing of a government, which allows them to sometimes pursue political goals at the expense of market signals.

Due to the increase in Chinese investment in the U.S. and the growing potential threat these investments pose to our overall economy, we urge you to ensure any action taken to restrict Chinese investments is not limited to those that fall under the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS). There is bipartisan support in Congress to review the strategic long-term investments China is making in the American economy. Specifically, our bill, the Foreign Investment Review Act, would give the Administration new powers to review foreign investments that may not be in the long-term interest of the United States. We urge you to make this legislation a priority of your Administration's efforts and to pursue investment restrictions in line with its objectives.

We look forward to working with you on this critically important issue for the country.

Sincerely,

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