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Floor Speech
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Mr. CORNYN. Madam President, last week, I came to the Senate floor to discuss provisions that would address outbound investment transparency that Congress neglected to put in the National Defense Authorization Act conference report, which we are presently considering.
Well, I am back again, and I wish I had better news to share. As I mentioned last week, no one can claim to be serious about the China threat while turning a blind eye toward outbound investment transparency. Simply put, American investment in Chinese companies is the lifeblood of the Chinese economy. If the People's Republic of China, the Chinese Communist Party, were part of the rules-based international order, it would be one thing, but they are not.
The People's Republic of China and the Chinese Communist Party welcome that foreign investment to build their economy while they modernize their military and rearm their country, threatening peace in the region and beyond.
Quite frankly, I am disappointed the House and the Senate have so far failed to take action on this matter that is of critical importance to our strategic competition with the Chinese Communist Party. The House and the Senate will have one last chance this year to address the outbound investment transparency provision I am discussing in the continuing resolution before we leave for the holiday recess.
But consider for a moment, we are awaiting an announcement that this continuing resolution has somehow been agreed to by the leaders here when we are talking about financing the government that we should have done before the end of the fiscal year last September. And now here we are, at the last minute, trying to figure out how to kick the can down the road to March.
But notwithstanding this terrible way to do business and to handle our country's finances--threatening, once again, another government shutdown, a completely unnecessary drama--I would urge my colleagues not to miss this opportunity to include this outbound investment transparency provision in the continuing resolution. We simply cannot wait another year to address this issue.
While Members of the House and Senate hem and haw, China is aggressively building up their defensive and offensive capabilities. The Chinese military continues to conduct joint exercises with Russia, and they continue to engage in provocative and aggressive behavior toward our treaty ally, the Philippines, in the South China Sea.
It is no secret that President Xi has ordered the Chinese military to be ready and capable of taking Taiwan by force by the year 2027, barely 2 years from now. The last thing the United States of America should be doing is financing the very economy and the weapons systems that will be used to try to destroy our allies and, potentially, us.
As we all know, China, Russia, Iran, and North Korea have joined together as the axis of autocracies in opposition to the democracies across the planet. This is a very dangerous alliance which foreshadows the sort of things that led to the runup to World War II.
It is simply foolish for the United States to help China to modernize its military and create this very dangerous scenario by investing in technologies that could be used ultimately to kill American soldiers.
I could care less if American investors want to build another Starbucks or another Burger King in the People's Republic of China. I do care about dual-use technology and advanced technology that they could use to defeat us in the Indo-Pacific. By some estimates, U.S. investments in Chinese companies total $2.3 trillion in market value by the end of 2020. This includes, incredibly enough, $21 billion in semiconductors, $54 billion in military companies, and a whopping $221 billion in artificial intelligence. Those are American companies investing in China to build those things.
A recent report from the United States-China Economic and Security Review Commission found that more than 90 percent of the total U.S. investment in these sectors is concentrated in the semiconductor industry. When it comes to China's AI industry, the report cites an analysis that found U.S. investors account for 37 percent of the $110 billion in global financing raised by firms from 2015 to 2021. This is in AI.
To capture this picture from another angle, the report points out that U.S. investors consistently contribute more than double the capital to these sectors compared to all non-U.S. investors combined.
Consider the fact that we passed the Chips and Science Act in 2021 to create programs that would bolster our ability to compete with China and to eliminate vulnerable supply chains when it comes to advanced semiconductors. We made this critical investment in reshoring the manufacturing of advanced semiconductors, but also we made critical investments in quantum computing and AI to ensure that we win the competition with China. And we established guardrails to make sure that these funds could not be used by our adversaries or to fund them.
But how foolish would it be for us to have made this investment and still continue to fund the growth of China's capabilities and these sectors at the exact same time? By turning a blind eye to this reality, we are feeding the hand that is preparing to bite us. And the truth is, addressing outbound investment transparency will only become more painful if we wait.
This is a can that the United States of American cannot afford to kick down the road anymore. As I said, China's President Xi Jinping has made his plans for the People's Liberation Army to be ready to invade Taiwan by 2027. He could not be more clear.
What are we waiting for? And while I know I have painted a rather grim picture--which I unfortunately believe to be completely accurate-- I remain optimistic that progress will be made on this critical matter before the end of the year. It has to. We simply cannot put it off. It has to be in the continuing resolution.
And while our political environment is divided, there is one thing that Democrats and Republicans--hawks and doves--alike can agree on, and that is the threat posed by China and the Chinese Communist Party.
I have been working on this matter for a long time now, and I have been amazed at the amount of bipartisan and bicameral agreement that exists on addressing outbound investment transparency.
So what is the delay? Why haven't we done it yet? Minority leader Hakeem Jeffries originally blocked outbound investment transparency provisions from being included in the NDAA last week, but I remain hopeful that he will continue to work in a bipartisan manner with Republicans on including this critical tool in this end-of-year funding package, which must be acted on by the end of this week.
I would like to thank the Speaker of the House Mike Johnson for his strong commitment to making sure this gets done in a timely fashion. Last year, my amendment to address outbound investment passed the Senate by 91 to 6--91 to 6. But it was not included in the final version of the National Defense Authorization Act. However, Speaker Johnson assured me he would make sure those provisions were included in the end-of-year funding package. Likewise, Senator Schumer made the same commitment. And I know they will keep their word.
So I look forward to continuing work with all my colleagues to make sure this critical matter is addressed in this year's funding measure. We simply cannot put it off any longer. We cannot continue to fly blind when it comes to American companies investing in China in industries and areas that can be used not only to build their economy but threatens peace and stability in the region and beyond.
As I said last week, no one can seriously claim to care about the threat posed by China if they support continued U.S. investment in Chinese defense technologies.
China is certainly not waiting around, and neither should we.
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