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Floor Speech
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Mr. CORNYN. Mr. President, one of the things we have to do before we open our Christmas presents in a couple of weeks is to pass the National Defense Authorization Act. This is one of the rare instances-- and you can count them on maybe one hand--where we actually have good bipartisan cooperation, and it is for a good cause. It is in the defense of our Nation and in support of the men and women who wear the uniform and who keep us safe.
The Senate and the House have now released a final text that has been reconciled between the House and the Senate versions. All that remains now is for the House and then the Senate to pass the final version and send it to President Trump for his signature.
The National Defense Authorization Act is one of the most important pieces of legislation we pass each year. I believe we have done it-- without exception, I want to say--for 63, 64 years in a row.
Now, I wasn't here for each of those years, but that is the history that has been handed down.
As I said, this legislation is critically important because it makes sure that our military has the necessary resources to achieve the missions of today and rise to the challenges of tomorrow. As we have seen even in the battlefield in Ukraine, the nature of modern warfare has changed dramatically with the advent of the ubiquity of drones. With even poor countries like Yemen, where the Houthis send drones into countries like Israel or attack merchant ships in the Red Sea, we have had to use million-dollar missiles to shoot down basically cheap drones. Well, you can't continue that, you can't sustain that, so it is important that we update and modernize our military according to the threats and the technology available today.
Given our rather inconsistent record in other must-pass legislation, this is an impressive run of 56 years, my notes remind me, underscoring the importance the U.S. Congress has always placed on ensuring the fact that we have the strongest military in the world. We have the strongest military in the world not in order to fight but in order not to have to fight--in order to maintain deterrence. That is what President Reagan talked about and what President Trump has talked about--peace through strength. That comes with deterrence.
We are demonstrating the fact that we are committed to the defense of our Nation and our friends and allies around the world and that we are not afraid to make that investment. Any country that might decide to change the status quo and start a military conflict knows from the outset they are likely doomed to fail.
This year's NDAA, the Defense authorization bill, includes numerous important policies to strengthen our national defense, but perhaps the biggest success in this year's annual authorization bill is a significant win against the Chinese Communist Party. What I am referring to specifically is a provision that is in the reconciled bill that creates a vehicle for transparency on outbound investment from the United States into China.
We have known for decades now that China has attracted manufacturing from around the world into that country, to the detriment of manufacturing jobs here in America, and that they have used that technology they have learned and the workforce training that has gone along with it in order now to build weapons systems and threaten peace in the Indo-Pacific and threaten the United States--our position of dominance--when it comes to national security.
This provision that I will speak more to in a moment has been many years in the making. It goes back to 2021.
I tell people that the most important lesson I have learned here in the U.S. Senate is perseverance. If at first you don't succeed, try, try again, and that is what we did here. So in 2021, I partnered with then-Senator Casey on the initial outbound legislation. We worked through several different iterations of this legislation and listened to the input from stakeholders around the Nation--all with the goal of having notification, prohibition with regard to the investment of American dollars in China.
In 2023, I introduced the Outbound Investment Transparency Act and pushed for its inclusion in the Defense authorization bill that year. The Senate voted 91 to 6 to include my amendment in the annual Defense bill that year. Obviously, this enjoys broad bipartisan support in recognizing the challenge and indeed the threat that China could pose. It is highly unusual, as we know now, to see that level of agreement in Congress, but given the preeminence of the threat, nearly every one of my colleagues supported that provision.
Unfortunately, after nearly unanimous consensus that this amendment was needed to counter the rise of the Chinese Communist Party, that provision was dropped when the House and the Senate went to conference.
Then, last year--back again--I continued to push for this provision and was adamant that we had no time to lose. Even so, the language on outbound investment was once again dropped from the Defense authorization bill.
I want to credit Speaker Johnson, who has led a valiant effort in the House to include this provision in the end-of-year continuing resolution, but of course, when everybody tried to add their favorite policy rider to the continuing resolution at the end of last year, the bill collapsed under its own weight, and all of those outside provisions were stripped out. Once again, we kicked the can down the road.
Now, if we were simply talking about some relatively routine function, like funding a bridge, this might have been something par for the course, but that is not what we are dealing with here. I am confident in saying we are living in one of the most dangerous times since the Second World War, and China is our most significant adversary.
President Xi has signaled that he intends to reincorporate Taiwan in 2027 into the Chinese nation. As we approach the end of 2025, this is just a little more than a year away.
China has made no secret also of joining hands with Russia in conducting joint military exercises. We see now, when it comes to Ukraine, where North Korea, Russia, China, and even Iran--sort of the hit list of greatest military threats--are joined together in opposition to the United States and Europe in supporting the people of Ukraine. So they have now locked arms against us.
Meanwhile, in the South China Sea, which is a very important international lane of commerce, China continues to aggressively expand its control by conducting military drills and creating islands out of shoals and other pieces of territory. They have deployed surveillance tools and inflamed tensions with their neighboring countries, like Vietnam and the Philippines, in an attempt to intimidate them.
Let's not forget they are the powerhouse behind the drug crisis we are facing at home as well. I am talking about the fentanyl crisis. It is well established that fentanyl has been the leading cause of death in America of young people between the ages of 18 and 45. It is perhaps less well- understood or -known that these drugs are smuggled across our southern border by Mexican drug cartels, but they are manufactured from chemicals imported from China to Mexico--so-called precursor chemicals.
But one thing is abundantly clear from all of this: China is not a threat we can ignore.
Failure to address this provision on outbound investment is not just to ignore the threat of China but to actively help them build up their own defense arsenal and threaten peace in the Indo-Pacific.
At this very moment, U.S. companies are investing money in China. They are bankrolling China's capabilities in semiconductors, quantum computing, hypersonic systems, and artificial intelligence. We are in a competition with China in each of those areas, so why in the world would we blindly allow American investors to invest in our opponent and help them defeat us in the race in each of these areas of technology? It is estimated that U.S. investments in Chinese companies currently total about $2.3 trillion in market value. That was by the end of 2020. It included $21 billion in semiconductors, $54 billion in military companies, and $221 billion in artificial intelligence.
Part of the problem is that China doesn't recognize a separation between commercial enterprises and their military. They have a law that forces their commercial enterprises to share information with their military. It is called military-civil fusion. So there is no way to just say ``Well, we are just investing, in America, in Chinese businesses; we are not investing in the military.'' It is impossible for that to be true given the Chinese law enforcing military-civil fusion. So when you invest in China to help them build their capacity in any one of these areas, you are helping the Chinese military that one day may be an adversary--an open adversary--of the United States and our friends and allies.
How can we expect the United States to dominate in the artificial intelligence frontier if our companies are investing in the rise of our biggest competitor? We have heard in the Foreign Relations Committee, in a subcommittee that Chairman Ricketts chaired recently, that this is the No. 1 race between China and the United States. It is who is going to perfect the use of artificial intelligence and to use it not only for commercial purposes but to defend the Nation or to use it for aggressive offensive purposes. So wouldn't we want to know if American companies are investing in the very technology China will try to use to defeat us?
Again, China is more than just a commercial competitor. Every dollar that the United States invests in a Chinese company is a dollar that is going toward the potential production of weapons that may one day be used to kill American soldiers.
Let me say that once more. Every dollar invested in China by a U.S. investor into a Chinese company is a dollar that is going toward the potential production of weapons and technology that one day may be used to kill Americans.
It is mind-boggling to me that anyone in the U.S. Government would not see the urgency of this policy of outbound investment transparency. Once we have a good picture of exactly what is going on, we as policymakers can decide what, if any, other policies we need to enact to protect our country, but if we don't know because there is no requirement to notify the government about what those investments look like and what the nature of those investments is, we are completely blind--I would say willfully blind--to that growing threat.
Those who have thrown up roadblocks against this provision over the last 3 years are working directly, whether they know it or not, in the interests of the Chinese Communist Party and directly, whether they know it or not, against the interests of the people they represent--the American people. But now, after nearly 5 years of work from Members in both Chambers, I am proud to say the language that we have proposed to address outbound investment transparency is in the final version of this year's National Defense Authorization Act. The House, as I said earlier, will vote this week, and I look forward to supporting that provision again in the Senate.
This has been a marathon, and I am thankful to the majority leader, Senator Thune. I mentioned the Speaker of the House, Mike Johnson. I would add a number of other names: Senator Tim Scott, Senator Cortez Masto, Senator Dan Sullivan, and Representative Andy Barr in the House of Representatives--all of whom will have contributed to this success when we pass the bill.
The Chinese Communist Party may have successfully evaded our scrutiny for the past few years, but this is the year we will finally put the nail in the coffin and open our eyes to the growing challenge that China represents--again, not just as a commercial, economic competitor but as a potential military competitor on the battlefield. That is something none of us want. The best way for us to prevent that from happening is to deter China, and you don't deter them by having American dollars invested in the very military capability that they could use to fight us and defeat us and our allies in the Indo-Pacific.
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