By Michael Martina and Alexandra Alper
WASHINGTON (Reuters) – Legislation to curb U.S. investment in China will be reintroduced in Congress, the chair of the House of Representatives’ select committee on China said on Tuesday, adding that the bill’s failure to pass into law last year was not due to opposition from billionaire Elon Musk.
Lawmakers from both parties have criticized large American providers of investment mutual funds that track stock indexes for directing billions of dollars from investors into stocks of Chinese companies that the U.S. believes are facilitating the development of China’s military.
Some Democratic lawmakers in December accused certain Republicans of protecting Musk’s business interests in China by scrapping provisions in a U.S. funding bill that would have prohibited Americans from making such investments in strategic sectors, such as certain AI systems and semiconductors.
Musk, a close ally of President Donald Trump and the CEO of electric car maker Tesla, which has extensive business operations in China, helped lead opposition online to the government funding bill last year that would have included the investment restrictions. The investment measures were ultimately dropped from the bill, though it isn’t clear if Musk specifically opposed them.
The select committee’s Republican chair, Representative John Moolenaar, who has called passing restrictions on outbound investment to China a top priority, told an event in Washington that turning the legislation into law would require “a lot of political will.”
“We were very close to getting outbound investment legislation through in the last few weeks of the last Congress. It’s going to be reintroduced, and we’re going to work very hard to move that forward,” Moolenaar said at the Institute of World Politics.
“I want to believe that most Americans, when they realize the threat that is involved, will want to do the right thing for our country,” he said.
China, the United States’ top geopolitical and technological rival, has said it opposes such legislation, calling it an unfair effort to target Chinese products and companies in the name of national security.
Moolenaar said he was “not convinced” that Musk, whom Trump has tasked to lead an effort to slash the size of the U.S. federal workforce, was responsible for the omission.
“I don’t believe that was what ended up not allowing that to move forward,” he said.
“We had different committees of jurisdiction that had different viewpoints, and we were trying to do one thing, and the Senate was trying to do another thing,” he said.
A spokesperson for the White House did not respond immediately to a request for comment.
Moolenaar said the White House would play a crucial role in any renewed effort to advance the outbound restrictions, and he praised key members of Trump’s national security team, including Secretary of State Marco Rubio and national security adviser Mike Waltz, for understanding the threats he said were posed by China.
“I have a lot of confidence in the president’s team in these areas,” he said.
(Reporting by Michael Martina and Alexandra Alper; Editing by Leslie Adler)
