U.S. and China flags at the 23rd Session of the U.S. China Joint Commission on Commerce and Trade (JCCT) press conference, at the Andrew W. Mellon Auditorium, Wednesday, December 19, 2012, in Washington, D.C.
The JCCT holds high-level plenary meetings on an annual basis to review progress made by working groups that focus on a wide variety of trade issues. These working groups meet throughout the year to address topics such as intellectual property rights, agriculture, pharmaceuticals and medical devices, information technology, tourism, commercial law, environment, and statistics.
Established in 1983, the JCCT is the main forum for addressing bilateral trade issues and promoting commercial opportunities between the United States and China. The2011 JCCT meeting was held in Chengdu, China, where China agreed, among other issues, to improve intellectual property enforcement, delink innovation policies to government procurement preferences, and provide a fair and level playing field in China’s Strategic Emerging Industries. USDA photo by Lance Cheung.
In recent years, lawmakers have become aware of a variety of ways in which China infiltrates their states.
This has led to a variety of sensible and urgently needed responses, ensuring universities are not manipulated by a foreign enemy power, and measures that aim to stop Chinese ownership and control of important land.
There is a clear goal that has wide support, particularly amongst Republicans: protecting Americans and our key assets from Chinese control. Measures that achieve this goal should be supported.
There are, however, bills that have fallen on the wrong side of the line and negatively impacted American companies – risking economic growth, jobs, and efficiency in state government.
It is vitally important that needed efforts to protect against China do not hurt Americans.
Florida was a leader on this important issue. Their law and regulatory implementation highlight how a good policy still can include some unintentional pitfalls, and how Republicans worked to fix those pitfalls.
Florida’s bill clearly states that foreign principals of foreign countries of concern, like China, cannot get government contracts, economic development incentives, or own land or critical property.
There was one area in which the bill language had strayed too far afield, and could have prohibited even U.S. firms who have a small minority of passive investors in a fund from China from owning and developing land. This would have crippled development of real estate projects in Florida.
Florida leaders addressed the issue, with agencies fixing the issue through regulatory rulemaking.
This illustrates how careful lawmakers need to be as they engage in efforts to curb undue Chinese influence and control – and sets a policy example for Republican lawmakers across the country on how to avoid going too far.
With penalties for violations including massive fines and even criminal punishment, it is extremely important that Americans are not treated the same as Chinese entities.
Measures that accurately target foreign adversary control and avoid hitting U.S.-controlled companies operating in good faith are one area of importance. There are plenty of other risks in these wide-ranging bills.
It is also vital to avoid treating American companies that operate internationally as if they are foreign adversaries because they have formal subsidiaries abroad. At the same time, lawmakers are rightfully trying to avoid letting Chinese companies sneak into their states by working with a U.S. based firm that does nothing but serve as a front for the Chinese company and their goods.
Fine tuning bill language to differentiate these scenarios is necessary to protect American jobs and our domestic economy, while also not reducing bids for state contracts – which can mean less competitive pricing for taxpayers.
Defending against insidious Chinese tactics to infiltrate the U.S. is no easy task and state legislators and governors tackling this problem deserve credit for their hard work. As they work to protect against foreign adversaries, they must be diligent to ensure no friendly fire harms American companies.
