[Congressional Record Volume 164, Number 92 (Tuesday, June 5, 2018)]
[Senate]
[Pages S2998-S2999]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES

  Mr. BROWN. Mr. President, last month in the Banking Committee, we 
passed bipartisan legislation to give our country more tools to respond 
to foreign investments from countries like China that pose a threat to 
our national security. I appreciate the Presiding Officer's interest in 
this issue also.
  The Senate Banking bill was attached to the Defense bill in the Armed 
Services Committee later that week, and the House also passed a similar 
bill through a key committee at the same time. This is good news as we 
try to address threats to our national security, and I hope we can get 
this to the President's desk quickly.
  The Committee on Foreign Investment in the United States--so-called 
CFIUS--screens foreign investments for national security threats and 
blocks those that undermine our national security. But as countries 
like China have adopted new tactics and new techniques to acquire our 
critical knowledge and know-how, the laws that give CFIUS its authority 
haven't been able to keep up with technology; hence, the reason that 
Senator Cornyn and Senator Feinstein and Senator Van Hollen and Senator 
Crapo and I have worked on this. I want to thank them for introducing 
legislation last fall to expand CFIUS's authority to keep up with these 
new tactics.
  The Banking Committee bill builds on their efforts to modernize CFIUS 
to make sure that it has the tools it needs to tackle today's threats. 
No country--not even close--no country has been more aggressive than 
the People's Republic of China in going after American technology in 
aviation, robotics, new energy vehicles, and others where the United 
States has established itself as a global leader for a long time.
  In just 3 years, from 2013 to 2015--from the beginning of 2013 to the 
end of 2015--the number of Chinese acquisitions coming under CFIUS 
review jumped 38 percent. And China is getting more clever, more 
sneaky--you can choose the word you like--at finding ways to get around 
the rules to avoid review at all.
  We have seen Chinese companies start to structure deals so that they 
can gain access to sensitive technology and information without 
triggering the CFIUS review. For example, if a Chinese investor wants 
to buy a controlling stake in an American company, CFIUS would review 
that deal and have the chance to block it. But if Chinese investors 
instead got seats on that company's board, they could still have access 
to the same sensitive technology without going through the CFIUS 
review. Or some foreign investors also might, for instance, decide to 
enter into a joint venture with an American company instead, giving 
them access to all of the technology and data and know-how but 
bypassing the CFIUS review process.
  The American business may not even particularly like joining up with 
this Chinese company, but the Chinese company will coerce them into a 
joint venture as a condition. This is what China is really good at, and 
U.S. corporations have been too weak-kneed in succumbing to this as a 
condition for continued access to the Chinese market. They play for 
keeps. Our corporations play far too often for narrow profits, even if 
at the end it is bad for American national security and even if at the 
end it is bad for American economic security.
  Our bipartisan bill will give CFIUS and our export control agencies 
the tools they need to ensure that these types of investments don't 
slip through the cracks. The bill strengthens the CFIUS review process, 
the export control laws, and enforcement of both, particularly when it 
comes to critical technology and investments from

[[Page S2999]]

State-owned companies. But, so often, and as important as these updates 
are, CFIUS was created only to deal with national security threats but 
can't do any more than that. Right now, we have no way to evaluate 
deals that may pose a threat to our economy.
  In 2016, foreign direct investments in the United States totaled $370 
billion. None of that--not a dollar of that--was reviewed to ensure it 
was in our long-term strategic economic interests. So while some of 
those investments were reviewed to protect our national security from 
Chinese threats, not one dollar was examined, was screened, was looked 
at, was reviewed to ensure that it was in our long-term strategic 
economic interests.
  That is why I joined with Senator Grassley to introduce the 
bipartisan U.S. Foreign Investments Review Act. It would empower the 
Department of Commerce to begin screening all types of large foreign 
investments for their long-term economic impact and consequences for 
American workers and American businesses.
  I thank Senator Grassley for working on this important legislation. 
Updating CFIUS is important for our national security. That is 
paramount, but we also need to expand it because it is important that 
our economic interests be protected.
  We understand that the Chinese subsidize their energy, water, land, 
and capital. They often are state-owned enterprises. They are so often 
able to come into our markets and simply break international trade 
rules and put our companies out of business and throw our workers out 
of work.
  (Mr. Kennedy assumed the chair.)
  We have seen foreign investments here that have raised serious 
concerns, including worries that those companies are pursuing 
investments for the sole reason or the principal reason of undermining 
American industries and giving their own companies an unfair advantage. 
Again, some of these companies are owned or controlled by foreign 
governments. When it is Chinese, especially, their water, land, 
capital, and energy are subsidized, and it takes away our ability to 
compete because we don't do that.
  We took a first step with an amendment in the CFIUS reform bill. For 
the first time, the Department of Commerce--in this bill that the 
Presiding Officer and I worked on in the Banking Committee--for the 
first time, the Department of Commerce will be required to study what 
American companies China is buying and in what sectors so we can begin 
to assess how big the threat is. Now we need to move forward with our 
comprehensive bill.
  We surely know there are Chinese investments in the Presiding 
Officer's State of Louisiana and my State of Ohio. There are Chinese 
investments coming in that could, in fact, undermine our economic 
security, could cost our companies business, and could cause some 
companies to go out of business because of Chinese subsidies for their 
investments and ultimately put workers in Louisiana, Ohio, and 
elsewhere out of business.
  It is simple. Before we do business with a foreign entity--whether 
the Government of China or companies subsidized by governments in that 
part of the world--let's make sure it will create jobs, let's make sure 
it will grow the U.S. economy, and let's make sure it will not 
undermine our national security or American industries. We are already 
behind when it comes to protecting our economy from Chinese investment.
  I welcome investment from around the world, but I don't welcome it if 
it is going to undermine our national security, and I don't welcome it 
if it is going to put American companies out of business and American 
workers out of jobs. Senator Grassley and I will continue working to 
change that. It is time to move forward.
  I yield the floor.

                          ____________________