Senator John Cornyn on Restricting US Investment in China's Military Technology

National Defense Authorization Act (NDAA)

• 🇺🇸 The National Defense Authorization Act (NDAA) is nearing completion, with efforts to reconcile House and Senate versions for presidential signature.
• ⚠️ Decisions within the NDAA have life-or-death consequences, emphasizing the importance of carefully considering its contents.

China as a Near-Peer Competitor

• 🇨🇳 China is identified as a near-peer competitor with intentions to dominate the U.S. economically and militarily.
• 🇹🇼 China has repeatedly threatened to forcibly take Taiwan, highlighting geopolitical tensions.
• 💡 The race for artificial intelligence (AI), heavily reliant on advanced semiconductors, is seen as crucial for the world's future.

Military-Civil Fusion and Technology Transfer

• 🤝 China's policy of military and civilian fusion means commercial technological advancements, including AI, are shared with their military.
• 🔬 Expert testimony emphasizes the need for export controls to prevent U.S. technology from aiding China's military development.
• ⚙️ Beyond chips, controls are needed for machinery used in semiconductor production, often made by allies like the Dutch ASML.

Outbound Investment Transparency

• 💰 Outbound investment transparency is a critical provision being pushed for inclusion in the final NDAA.
• 💸 U.S. companies investing in China, such as Apple and Tesla, have contributed to China's manufacturing capabilities and learned processes.
• 📈 An estimated $2.3 trillion in U.S. investments in Chinese companies includes significant amounts in semiconductors ($21B), military companies ($54B), and AI ($221B).
• ⚠️ Every American dollar invested in these critical sectors in China is seen as directly fueling the arsenal of a strategic adversary, potentially used against U.S. service members.

Bipartisan Concern and Urgency

• ⚖️ The issue of restricting outbound investment has bipartisan support, with a past vote of 92-6.
• 📉 This provision has historically been dropped from conference bills, often due to financial beneficiaries of the status quo.
• 🚀 Prioritizing this provision in the current NDAA is crucial to avoid losing the AI race and risking American lives in potential conflicts.