Congress once again fails to confront the China threat

OPINION:

If you blinked, you missed it. The U.S. House of Representatives just concluded a “China Week” intended to address China’s aggressive rise. But despite all the buildup, the House leadership failed to advance any legislation that could actually tackle China’s growing threat to America’s economic and national security. As a result, it’s still “business as usual” on Wall Street; financial houses continue to do robust business with companies tied to the Chinese Communist Party (CCP).

The disconnect is stunning. While China continues to use slave labor, maintain close ties with both Russia and Iran and build its military arsenal, Wall Street keeps investing in Chinese firms tied to Beijing’s global ambitions.

Last week, the Coalition for a Prosperous America (CPA) released a report on U.S. financial giants—including BlackRock and Goldman Sachs—that have formed joint ventures with Chinese state banks. These partnerships are giving Beijing unprecedented influence over major U.S. financial firms. This Wall Street entanglement with Beijing isn’t just reckless—it’s a betrayal of American interests.

Congress failed to take any meaningful action during “China Week.” In particular, lawmakers ignored bipartisan legislation intended to block Chinese companies from exploiting Inflation Reduction Act (IRA) tax credits. And instead of addressing China’s stranglehold on solar markets, Congress allowed Beijing to keep profiting from taxpayer-funded energy incentives. This hurts U.S. manufacturers who have invested billions in new, domestic solar production facilities.

Even more shocking is that House Speaker Mike Johnson and the Republican leadership failed to advance legislation restricting U.S. capital flowing into China. They disregarded the chance to finally close a “de minimis” loophole that allows Chinese firms to ship goods—including fentanyl—directly to American homes with no tariffs or scrutiny whatsoever.

So why did Congress fail to act?

Wall Street is still calling the shots. How else to explain the omission of legislation that would prevent China from exploiting U.S. capital markets?

Consider BlackRock and JPMorgan. BlackRock, the world’s largest asset manager, has already poured billions of dollars into China. And JPMorgan holds roughly $20 billion in Chinese investments. These financial behemoths continually funnel U.S. capital into companies directly tied to Beijing’s military ambitions. Some of this money has even helped to fund the construction of China’s Fujian aircraft carrier, a vessel that rivals the most advanced U.S. naval ships.

The situation is even more disconcerting concerning human rights abuses. U.S. financial firms have invested in Chinese companies that profit from forced labor, including the exploitation of more than 80,000 Uyghurs between 2017 and 2019 alone. These atrocities are well-documented, yet Wall Street remains undeterred—putting short-term profits ahead of morality and economic security.

There’s also the disturbing lack of regulatory oversight in China. Both the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) have warned that U.S. regulators face significant challenges in overseeing companies with operations in China. The CCP continues to block access to essential financial documents, frustrating the repeated efforts of U.S. regulators. However, 265 Chinese companies are still listed on U.S. stock exchanges despite such red flags. These entities have a combined market capitalization of $848 billion, and many remain complicit in Beijing’s military modernization, industrial expansion, and human rights violations.

Lawmakers should have acted. Sen. Rick Scott (R-FL) has already introduced legislation to curb Wall Street’s investments in China. And Reps. Victoria Spartz (R-IN) and Brad Sherman (D-CA) have proposed similar bipartisan measures. Yet none of these proposals were brought to the floor. Additionally, the House failed to address the de minimis loophole despite multiple bipartisan efforts, including recent Senate legislation.

It’s time for Congress and the American people to recognize this charade for what it is: Wall Street is putting profit over national security—and aiding the CCP’s military expansion. Voters should feel very frustrated with their elected officials. The American people need a Congress that will truly act to protect the United States from China’s very real, growing threat.

• Michael Stumo is the CEO of the Coalition for a Prosperous America. Follow him @michael_stumo.