LawFlash

US House of Representatives Holds ‘China Week’ – What Happened and What’s Next?

September 19, 2024

With federal elections and the conclusion of the 118th Congress drawing near, “China Week,” as dubbed by House leadership, presented one of the final opportunities for the US House of Representatives to act on a variety of China-related bills, several of which had been previously introduced in one form or another and been lingering in committee. The House voted on a total of 25 bills related to US-China relations and competition, many of which enjoyed broad bipartisan support.

The bills were introduced in a single package vote by suspension of the rules, a procedure generally used to quickly pass noncontroversial bills in the House, which requires a vote of two-thirds of the members present and voting. While all 25 of the bills were passed, their ultimate fate remains uncertain as the Senate—which has companion bills for some but not all of the House bills—would need to consider them in the limited number of legislative days remaining, with several “must-pass” bills still on the calendar that will likely take precedence.

Speaking at a think tank event in July, House Speaker Mike Johnson (R-LA) had said that one of his main goals was to have “a significant package of China related legislation signed into law by the end of this year.”

SUMMARY OF CHINA WEEK BILLS

Because it was overwhelming for many companies to track the flurry of China-related legislation that moved through the House during China Week, we provide in this LawFlash a high-level summary of the bills that were considered and passed.

Technology-Related Risks, Including Information and Communications Technology and Services and Biotechnology

H.R. 7589 – Removing Our Unsecure Technologies to Ensure Reliability and Security (ROUTERS) Act – Introduced by Rep. Bob Latta (R-OH) and passed in the House by voice vote, this bill directs the US Department of Commerce to study the national security risks posed by consumer routers, modems, and devices that combine a modem and router that are designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the influence of a covered country. A covered country would currently include China, Russia, Iran, and North Korea. The Senate has introduced a companion bill, S. 4572.

H.R. 2864 – Countering CCP Drones Act – Introduced by Rep. Elise Stefanik (R-NY) and passed in the House by voice vote, this bill amends Section 2(c) of the Secure and Trusted Communications Networks Act by adding telecommunications or video surveillance equipment or services (including software) from a Chinese drone manufacturer to the Federal Communications Commission’s (FCC’s) Covered List. This bill would extend existing bans on use of certain federal funding by telecommunications carriers to the purchase and maintenance of equipment made by the drone manufacturer.

H.R. 820 – Foreign Adversary Communications Transparency Act – Introduced by Rep. Elise Stefanik (R-NY) and passed in the House by voice vote, this bill seeks to enhance visibility of foreign equity and voting (or controlling) interests in FCC licensees by foreign countries of concern by requiring the FCC to create a list of licensees with reportable ownership by Chinese, Russian, Iranian, or North Korean governments or entities. The Senate has introduced a companion bill, S. 2114.

H.R. 4741 – Securing Global Telecommunications Act – Introduced by Rep. Kathy Manning (D-NC) and passed in the House by voice vote, this bill requires the Secretary of State to prepare a strategy for promoting the use of secure telecommunications infrastructure outside of the United States and to report on Russian and Chinese efforts and strategies to influence policies before the International Telecommunication Union. This bill is an extension of ongoing US efforts to coordinate with and encourage its global allies and partners to rip and replace Chinese-produced equipment and services within telecom networks and shift toward alternatives from “trusted” companies, and mitigate perceived influence of Russian and Chinese entities over international standards-setting bodies and policies.

H.R. 8152 – Remote Access Security Act – Introduced by Rep. Mike Lawler (R-NY) and passed in the House by voice vote, this bill seeks to regulate foreign access (via the cloud network or the internet, regardless of physical location) to items that are subject to export controls by the Department of Commerce. The bill is intended to close a loophole in Commerce’s regulations for controlling the export, reexport, and in-country transfer of items (in particular AI models and quantum computing items) that are subject to US export control laws but to which foreign companies (in particular Chinese entities) have obtained access through cloud-based services.

H.R. 5245 – Science and Technology Agreement Enhanced Congressional Notification Act – Introduced by Rep. Andy Barr (R-KY) and passed in the House by voice vote, this bill requires the Secretary of State to notify Congress before entering, renewing, or extending any science and technology agreement with China. The notification must include the full text of the agreement, justification for its national security benefits, an assessment of risks related to technology transfer, and how human rights concerns will be addressed. A 30-day waiting period is required before proceeding. The bill applies to new agreements and mandates a review of existing ones, requiring them to be revoked unless notification is provided to Congress within 60 days. The Senate has introduced a companion bill, S. 2894.

H.R. 7686 – To amend the Research and Development, Competition, and Innovation Act to clarify the definition of foreign country for purposes of malign foreign talent recruitment restriction, and for other purposes – Introduced by Rep. Mike Garcia (R-CA) and passed in the House by voice vote, this bill amends the Research and Development, Competition, and Innovation Act to clarify the definition of “foreign country” for purposes of malign foreign talent recruitment restriction.

H.R. 8333 – BIOSECURE Act – Introduced by Rep. Bruce Wenstrup (R-Ohio), the BIOSECURE Act was not passed by voice vote but rather passed in the House (206-81) after a roll call vote, and would prohibit US executive agencies from contracting with biotechnology companies identified as national security risks. It would prevent the procurement of biotechnology equipment or services from these “companies of concern” as well as entities that use such equipment or services in contracts with the government. Loan and grant funds would also be barred from being used to procure biotechnology services from companies of concern. The act includes provisions for case-specific waivers for contracts deemed necessary for national security or overseas healthcare services. It mandates an assessment of the risks posed by foreign adversaries obtaining multiomic data (genomic, proteomic, etc.), from US citizens and includes annual reporting on related intelligence activities. The Senate has introduced a companion bill, S. 3558.

International Trade, Including Export Controls, Sanctions, and Currency

H.R. 6614 – Maintaining American Superiority by Improving Export Control Transparency Act –Introduced by Rep. Ronny Jackson (R-TX) and passed in the House by voice vote, this bill amends Section 1756 of the Export Control Reform Act (ECRA) to require ongoing (every 90 days) reports to Congress on license applications, enforcement actions, and other requests for authorization for the export, reexport, release, and in-country transfer of items to entities on Commerce’s Entity and Military End-User lists. It seeks to provide Congress with increased visibility into Commerce’s issuance and denial of export license applications, arriving following growing concern about the number of licenses (and items authorized) to enable exports to sanctioned foreign entities.

H.R. 6606 – To amend the Export Control Reform Act of 2018 relating to the statement of policy – Introduced by Del. Aumua Amata Coleman Radewagen (R-AS) and passed in the House by voice vote, this bill amends the ECRA to add the protection of trade secrets as a policy goal of the US export control regime.

H.R. 7151 – Export Control Enforcement and Enhancement Act – Introduced by Rep. Ann Wagner (R-MO) and passed in the House by voice vote, this bill seeks to amend the ECRA to streamline and expedite the process for adding, removing, or modifying entities on the Entity List. It authorizes various federal agencies to propose changes to the Entity List, with the End-User Review Committee required to vote on such proposals within 30 days. It mandates that exports of items on the Commerce Control List to embargoed countries or entities on the Entity List require a license and are subject to a presumption of denial unless clear evidence proves the items will be used for their intended purpose. The Secretary of Commerce must notify Congress if exceptions to this presumption are made.

H.R. 5613 – Sanctions Lists Harmonization Act – Introduced by Rep. Michael Waltz (R-FL) and passed in the House by voice vote, this bill seeks to improve interagency coordination regarding inclusion of entities on sanctions lists maintained by the Departments of the Treasury, Commerce, and Defense by requiring them to notify each other within 30 days of placing a foreign individual or entity on specified “blacklists.” The notices trigger a requirement for a department receiving a notification to review and determine whether to place such individual or entity on the separate list(s) under the department’s responsibility. The bill could result in further harmonization between the Specially Designated National (SDN) List, Entity List, Section 1260H List (also known as the Chinese Military Companies List), Non-SDN Chinese Military-Industrial Complex Companies List, Sectoral Sanctions List, and Military End-User List.

H.R. 510 – Chinese Currency Accountability Act – Introduced by Rep. Warren Davidson (R-OH) and passed in the House by voice vote, this bill requires the United States to oppose, absent specified conditions, any increase in the weight of Chinese currency in the basket of currencies (currently a set of five currencies, each with different weightings) used to determine the value of Special Drawing Rights. Special Drawing Rights are a currency support tool available to members of the International Monetary Fund (IMF). Specifically, Treasury must instruct certain US officials at the IMF to oppose any such increase unless Treasury has certified that China is in compliance with certain standards and international agreements, including that China is in compliance with all general obligations of members of the IMF and has not been found to have manipulated its currency in the preceding 12 months. The Senate has introduced a companion bill, S. 1919.

Electric Vehicles and Batteries

H.R. 8631 – Decoupling from Foreign Adversarial Battery Dependence Act – Introduced by Rep. Carlos Gimenez (R-FL) and passed in the House by voice vote, this bill prohibits use of US Department of Homeland Security (DHS) funds to procure batteries produced by certain Chinese entities and entities identified on the Section 1260H List, Entity List, and other lists maintained under the Uyghur Forced Labor Prevention Act (UFLPA). The bill’s prohibition extends to assembly or manufacture of the final product that uses the battery as well as a majority of battery components. Waivers (which must be notified to Congress) may be available where they do not pose risk to national security, data, or infrastructure and if there are no available alternatives.

H.R. 7980 - End Chinese Dominance of Electric Vehicles in America Act of 2024 – Introduced by Carol Miller (R-WV) and passed in the House (217-192) by a roll call vote, the bill would amend and tighten eligibility requirements for the Inflation Reduction Act’s 30D tax credit by barring vehicles powered by a battery containing components or materials that have been extracted, processed, recycled, manufactured, or assembled by a prohibited foreign entity or designed, manufactured, or produced under contract with such an entity. It would define a prohibited foreign entity as a foreign entity of concern if the governments of China, Russia, Iran, or North Korea have the right or power (directly or indirectly) to appoint or approve the appointment of a covered officer or 25% or more of the capital or profits interests of which are owned (directly or indirectly) in the aggregate by a covered nation; a citizen, national, or resident of a covered nation; or an entity organized under the laws of a covered nation.

Strengthening US Countermeasures

H.R. 8361 – Economic Espionage Prevention Act – Introduced by Rep. Rich McCormick (R-GA) and passed in the House by voice vote, this bill aims to impose sanctions on foreign entities, particularly from foreign adversaries, involved in economic or industrial espionage or supporting foreign adversaries’ military and intelligence sectors. The bill mandates the US president to impose sanctions on entities that engage in stealing US trade secrets, violate export control laws, or provide critical components for foreign military use, especially related to Russian special operations. Sanctions include property blocking, visa revocation, and penalties under the International Emergency Economic Powers Act. The bill requires reporting on foreign espionage activities and allows the president to waive sanctions if deemed necessary for national security.

H.R. 1398 – Protect America’s Innovation and Economic Security from CCP Act of 2024 – Introduced by Rep. Lance Gooden (R-TX) and passed in the House (237-180) by a roll call vote, this legislation reestablishes a CCP Initiative within the US Department of Justice’s (DOJ’s) National Security Division to counter threats to the United States from the PRC; address state-sponsored espionage against US IP and academic institutions; identify and prosecute individuals engaged in trade secret theft, hacking, and economic espionage; identify cases under the Foreign Corrupt Practices Act involving Chinese companies that compete with US businesses; and protect US critical infrastructure against external threats through foreign direct investment and supply chain compromises. The legislation would require the Attorney General to submit an annual report to Congress on the CCP Initiative’s activities. The CCP Initiative within DOJ was previously shut down by the Biden administration following criticism for the potential of the initiative to be used to target Chinese Americans. If passed into law, the CCP Initiative would sunset after six years of operation, unless reauthorized. The Senate has introduced a companion bill, S. 511.

H.R. 9456 – Protecting American Agriculture from Foreign Adversaries Act of 2024 – Introduced by Rep. Dan Newhouse (R-WA) and passed in the House (269-149) by a roll call vote, this legislation would amend the Defense Production Act to include the Secretary of Agriculture in CFIUS reviews for covered transactions involving agricultural land, agricultural biotechnology, or agricultural transportation, storage, or processing. The bill directs CFIUS to, after receiving notification from the USDA, determine whether a reportable agricultural land transaction is a covered transaction and whether CFIUS should initiate a national security review or take another action with respect to the transaction. The bill defines a reportable agricultural land transaction, in part, as one that the Secretary of Agriculture has reason to believe is a covered transaction and involves a foreign person of China, Russia, Iran, or North Korea.

H.R. 1157 – Countering the PRC Malign Influence Fund Authorization Act – Introduced by Rep. Andy Barr (R-KY) and passed in the House not by voice vote but rather a roll call vote (351-36), this bill authorizes $325 million annually from 2023 (when the bill was first introduced) to 2027 to counter the influence of the Chinese Communist Party (CCP) and the Government of the PRC globally. For the purposes of this bill, malign influence includes acts to advance an alternative and repressive international order that bolsters the CCP and China’s hegemonic ambitions or undermine the national security, economic security, or sovereignty of the United States or other countries.

H.R. 1516 – DHS Restrictions on Confucius Institutes and Chinese Entities of Concern Act – Introduced by Rep. August Pfluger (R-TX) and passed in the House (249-161) by a roll call vote, this bill prohibits the Secretary of Homeland Security from providing any funds to an institution of higher education that has a relationship with a Confucius Institute (i.e., a cultural institute funded by the Government of the PRC or a Chinese entity of concern). For the purposes of this bill, a Chinese entity of concern is defined as any university or college in the PRC that is involved in civil-military fusion activities; participates in the Chinese defense-industrial base; is affiliated with the Chinese State Administration for Science, Technology and Industry for the National Defense; receives funding from any organization subordinate to the Central Military Commission of the Chinese Communist Party; or provides support to any security, defense, police, or intelligence organization of the Government of the PRC or the CCP. The Senate has introduced a companion bill, S. 1121.

H.R. 554 – Taiwan Conflict Deterrence Act – Introduced by Rep. French Hill (R-AK) and passed in the House by voice vote, this bill aims to deter Chinese aggression toward Taiwan by mandating the Secretary of the Treasury to report on financial institutions and accounts connected to senior Chinese government officials.

H.R. 1103 – Hong Kong Economic and Trade Office (HKETO) Certification Act – Introduced by Rep. Chris Smith (R-NJ) and passed in the House (413-3) by a roll call vote, this bill requires the president to annually determine whether HKETOs should continue to operate in the United States under the privileges provided by the International Organizations Immunities Act. If the president certifies to Congress that the HKETOs no longer merit these privileges, they must cease operations within 180 days. If the certification supports their continued operation, they may remain for another year unless Congress disapproves. The president may also revoke these privileges at any time, and federal entities may only partner with HKETOs if they are authorized to operate under this bill. The Senate has introduced a companion bill, S. 490.

Miscellaneous

H.R. 1425 – No WHO Pandemic Preparedness Treaty Without Senate Approval Act – Introduced by Rep. Thomas Tiffany (R-WI) and passed in the House (219-199) by a roll call vote, this bill mandates that any international agreement on pandemic prevention, preparedness, and response developed by the World Health Assembly must be treated as a treaty and require Senate ratification by a two-thirds majority. The bill cites concerns over WHO’s management of the COVID-19 pandemic and asserts that any new agreement should not be implemented by the United States without Senate approval. It aims to protect US sovereignty by ensuring legislative oversight of any binding international commitments.

H.Res. 1056 – Recognizing the importance of trilateral cooperation among the United States, Japan and South Korea – Introduced by Rep. Gerald Connolly and agreed to in the House by voice vote, this resolution commends the efforts of South Korean President Yoon Suk Yeol and Japanese Prime Minister Kishida Fumio for restoring relations between their countries in 2023 after years of strained ties. This bill encourages continued collaboration among the three nations across various sectors and recognizes the shared democratic values and alliances that underpin their partnership.

H.R. 7159 – Pacific Partnership Act – Introduced by Rep. Ed Case and passed in the House by a voice vote, this bill aims to strengthen US engagement with the Pacific Islands through a comprehensive strategy promoting peace, security, prosperity, and respect for sovereignty in the region. It emphasizes coordinating efforts with regional partners and institutions, supporting sustainable development, and enhancing US diplomatic, defense, and economic engagement. It also calls for reports on strategy implementation and greater coordination with international allies to support regional development goals.

TAKEAWAYS AND NEXT STEPS

Two notable omissions from China Week were bills related to outbound investment and the de minimis exception to forced labor laws. With respect to outbound investment, the president issued an executive order in August 2023 to establish new regulations to limit US outbound investment in China, and Treasury is currently engaged in a proceeding to promulgate implementing regulations. While there is some desire within Congress to institute separate outbound investment rules via legislation, the issue may have been too complicated and divisive to take up during China Week. The next Congress could once again take up outbound investment, but it seems likely that at least for now the only outbound investment regulations will be such currently under development pursuant to the executive order.

With respect to de minimis, there had been earlier reports that China Week would include legislation to close the de minimis loophole, which among other things has the effect of enabling low-value imports from China to avoid enforcement under the UFLPA. Although the de minimis issue would end up not being addressed by the House during China Week, the White House on September 13 announced its intention to issue proposed rules that would exclude from the de minimis exemption all shipments containing products covered by the tariffs in Sections 201 (steel, solar, and other imports) and 301 (textiles and apparel imports) of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. The White House also proposes to enhance the information provided for imports including the 10-digit tariff classification number and the person claiming the de minimis exemption. Finally, the White House threw its support behind legislative efforts to further address loopholes in the de minimis tariff exemption, however it did not endorse a specific legislative vehicle. Given the Biden administration’s support for additional legislation, it remains possible that the de minimis issue could be addressed before the end of this Congress.

With respect to further action on the bills passed by the House during China Week, the reality is that due to the abbreviated election year congressional calendar, the Senate may have limited floor time to consider individual bills that have passed the House. As such, it is possible that, of the bills passed during China Week, not all will receive consideration by the Senate, with consideration possibly limited to those bills deemed high-priority and/or noncontroversial. It is also possible that some of the legislation—as well as other pending China-related legislation that was not included in China Week such as the No Limits Act (H.R. 8043)—could be incorporated in a Senate China package, which Majority Leader Schumer has been considering.

Otherwise, the bills would likely have to be incorporated into the remaining “must-pass legislation” that Congress will consider before the end of the 118th Congress, namely a government funding package, the Farm Bill Reauthorization, or the FY 2025 National Defense Authorization Act. If the China Week bills are eventually attached, in whole or in part, to one of the remaining legislative vehicles, we would not expect final passage until the end of 2024.

Even if not all of the bills passed by the House during China Week are enacted into law, the volume and broad scope of the bills indicates companies should continue to monitor the bills’ progress and begin to consider the effect the various bills could have on business operations. Companies should also bear in mind that even for bills that do not end up getting enacted before the end of the year, the new Congress that commences in January will certainly continue to remain focused on US-China competition, and that focus will likely be reflected in further congressional investigations, government oversight, and legislation.

Manager, Government Affairs, David Mendelsohn contributed to this LawFlash.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:

Authors
David Plotinsky (Washington, DC)
Patricia Cave (Washington, DC)
JiaZhen Guo (Washington, DC)