Senate Bill Prohibiting US Investments in Covered Chinese Technologies

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Pacific Square

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Senate Bill Prohibiting US Investments in Covered Chinese Technologies Garners Significant Bipartisan Support

Introduction: A Bipartisan Push to Counter China

On March 13, 2025, Senator John Cornyn (R-TX) introduced the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act, a bipartisan legislative proposal aimed at restricting outbound U.S. investment in critical technologies that could strengthen the capabilities of the People’s Republic of China (PRC). The bill seeks to safeguard U.S. national security by prohibiting investments in sensitive Chinese technology sectors and requiring notification to the U.S. Department of the Treasury for certain non-prohibited transactions. Backed by lawmakers across party lines—including Senate Minority Leader Chuck Schumer—the bill reflects growing consensus in Washington on the risks of engaging economically with China amid escalating geopolitical tensions and an impending trade war.

Legislative Intent: Strengthening National Security Through Investment Controls

Although the full text of the FIGHT China Act has yet to be released, the bill is designed to expand the U.S. government’s oversight of outbound investments in areas that could enhance Chinese military or surveillance capabilities. Targeted sectors include artificial intelligence, advanced semiconductors, quantum computing, and hypersonic technologies.

The legislation enjoys strong bipartisan support from a diverse coalition of senators, including Catherine Cortez Masto (D-NV), Jim Banks (R-IN), Pete Ricketts (R-NE), Michael Bennet (D-CO), Bill Hagerty (R-TN), Andy Kim (D-NJ), Dave McCormick (R-PA), Chuck Schumer (D-NY), and Dan Sullivan (R-AK), along with Senate Banking Committee leaders Tim Scott (R-SC) and Elizabeth Warren (D-MA).

Covered Transactions: Scope and Exemptions

According to sponsor briefings and press releases, the FIGHT China Act would apply to a broad range of investment activities, including:

  • Acquisitions of equity interests, limited partnership interests, property, or other assets

  • Loans and debt financing

  • Joint ventures

  • Debt-to-equity conversions

Exemptions would be provided for:

  • De minimis transactions or those deemed in the national interest

  • Passive investments in publicly traded securities or pooled investment funds

  • Routine financial institution transactions

  • Acquisitions involving assets or entities located outside of the PRC

  • Administrative or ancillary business dealings

Prohibited Investments: Technologies of Concern

The Act would prohibit U.S. investments in Chinese development or production of:

  • Certain advanced integrated circuits

  • High-performance AI models

  • Quantum and supercomputers

  • Hypersonic materials and components

It also includes any technology:

  • Listed on the U.S. Munitions List

  • Intended for use with nuclear equipment or facilities

  • Subject to emerging technology export controls

Notification Requirements: Treasury Department Oversight

Even when not expressly prohibited, certain investments would require notification to the U.S. Department of the Treasury within 14 days of transaction. These include:

  • Non-prohibited semiconductor investments

  • AI systems used for military, surveillance, cybersecurity, robotics, or systems meeting specified computing thresholds

Legislative Context: Building on Past Proposals

The FIGHT China Act echoes legislation previously introduced by Senator Cornyn and Representative Andy Barr (R-KY) in December 2024, which stalled due to a broader federal funding dispute. That House bill was co-sponsored by Representative John Moolenaar (R-MI), Chair of the House Select Committee on the Chinese Communist Party—signaling the possibility of complementary House legislation that could accelerate the bill’s progress through Congress.

Strategic Outlook: Economic Security as National Security

The introduction of the FIGHT China Act represents more than a legislative milestone—it signals a paradigm shift in U.S. economic strategy. The longstanding notion that economic engagement could occur independently of strategic rivalry has eroded. In today’s climate, economic security is national security. Selective decoupling is already underway, with U.S. policymakers taking aggressive steps to prevent China from acquiring or benefiting from American technology.

The bill aligns with President Trump’s recent National Security Presidential Memorandum, which outlines his “America First Investment Policy.” This directive prioritizes blocking U.S. involvement in Chinese sectors advancing China’s Military-Civil Fusion strategy and calls for a reorientation of CFIUS (Committee on Foreign Investment in the United States) to scrutinize foreign adversaries—chief among them, China.

Additionally, new outbound investment rules issued by the U.S. Treasury in January 2025 aim to prevent U.S. capital from indirectly supporting adversarial military or surveillance technologies. These parallel initiatives underscore a unified federal approach to protecting strategic technologies.

Implications for Global Business

For multinational corporations and investment firms, the FIGHT China Act introduces significant compliance and strategic risks. Companies engaged in or considering operations in China—particularly in sensitive sectors—must reevaluate their exposure and prepare for a more restrictive regulatory landscape. As Washington embraces a tougher posture on economic ties with Beijing, the cost of doing business in China will increasingly be weighed against national security imperatives.

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