Democrats, GOP Agree to Challenge China in House Spending Bills

Congressional Democrats and Republicans don’t agree on much these days, save for one thing: shared enmity toward the Chinese government.

Members are set to vote this week on a seven-bill government funding package (H.R. 4502) that includes initiatives aimed at punishing the world’s second-largest economy, ranging from cuts in funding for various programs to an attempt to “counter the influence” of the Chinese government.

The 12 tough-on-China spending bills approved by the House Appropriations Committee include more than a dozen new provisions specifically targeting China.

Rep. Sanford Bishop (D-Ga.), chair of the House Appropriations Agriculture-FDA Subcommittee, said in an interview Congress must make sure not to “have our space invaded by potential adversaries, particularly in the economic realm.”

That kind of language, particularly the use of the word ‘invaded,’ worries Asian American and Pacific Islander lawmakers, Rep. Judy Chu (D-Calif.) said in an interview.

“It is bringing forth images of the invading hordes and therefore increases the xenophobic images in people’s mind,” Chu said. While Chu likes some measures meant to boost the U.S.’s ability to compete economically with China, “we have to be careful about the rhetoric,” she said.

Wuhan Lab Targeted in HHS Measure

The seven-bill minibus would ban Chinese companies from buying U.S. agricultural land and bar federal funds from going to the Wuhan Institute of Virology, a research lab in China that’s become the subject of theories that it may have been the source of Covid-19.

House members will vote on the package this week, which includes the Agriculture-FDA, Energy and Water, Financial Services, Interior-Environment, Labor-HHS-Education, Military Construction-VA, and Transportation-HUD appropriations measures.

The Labor-HHS-Education title includes three new measures, not included in previous years’ funding bills, focused on China.

Photo by HECTOR RETAMAL/AFP via Getty Images

In addition to the Wuhan ban, they would ban funds for “gain-of-function” research that increases the transmissibility of viruses. The measure is a response to theories that the Wuhan lab engineered a more transmissible coronavirus, a charge U.S. officials have denied. Another measure would direct the National Institutes of Health to provide a report on the deletion of genetic data related to the coronavirus from a public archive at the request of Chinese researchers.

All three measures were added to the bill during a July 15 markup through a manager’s amendment reserved for noncontroversial measures. The subtle adoption of the language reflects a decision by Democrats to sidestep debates over Wuhan as Republicans try to paint them as weak on China.

“It’s actually something we originally proposed, but the Democrats certainly don’t want their members having to vote on something like that,” Rep. Tom Cole (R-Okla.), ranking member of the House Appropriations Labor-HHS-Education Subcommittee, said of the measure to explicitly ban funds for the Wuhan Institute of Virology.

The Wuhan ban is largely symbolic. The NIH funds had previously gone indirectly to the institute through the U.S.-based nonprofit EcoHealth Alliance. NIH terminated the grant in April 2020.

Rep. Guy Reschenthaler (R-Pa.) said he originally offered the measure to block funds for the Wuhan lab and that Democrats agreed to fold it into the manager’s amendment amid “a lot of horse-trading.”

“We should not be subsidizing research labs in China,” Reschenthaler told Bloomberg Government. “They’re a near-peer competitor, they’re the second largest GDP in the world, on the brink of overtaking us in terms of economic power. Why are we using U.S. dollars to subsidize the scientific research of a near-peer competitor? Mind blowing, to me.”

Farmland Ban Slammed

In addition to the ban on buying U.S. farmland, the Agriculture-FDA bill includes measures that would block funds to buy raw or processed poultry from China for a U.S. school lunch program; and provide $5 million to start a pilot program for the Food and Drug Administration to perform unannounced food inspections in Chinese facilities.

Rep. Grace Meng (D-N.Y.) criticized the measure to ban Chinese companies from buying American farmland, saying at the June 30 markup that it targeted China and not any other adversarial governments. Appropriators adopted that amendment by a voice vote.

The Congressional Asian Pacific American Caucus sent lawmakers a letter in July calling on members to be specific in their criticisms of the Chinese Communist Party rather than broadly casting China as an enemy.

“When the language we use to refer to the actions of the CCP is not nuanced enough, or when we single out China for criticism even if other countries may be part of the problem as well, we run the risk of fueling a backlash against the entire Asian American community,” the letter said.

While the measure was added to the bill, lawmakers are still discussing changes to the language to assuage the concerns of the Asian Pacific American Caucus, said Bishop.

“We’ll work out some language that will be mutually acceptable,” Bishop said. “Obviously, there’s some sensitivity there with the Asian-American caucus, which is understandable, given the context of what that community is experiencing now. But there’s also a concern for our national security and food security of our country.”

The original amendment called for all Chinese nationals to be barred from buying U.S. farmland, which was narrowed to cover Chinese companies. Chu said she’s pushing for similar language focused on Russia and Iran, rather than singling out China.

Foreign Aid and Defense

The House’s State and Foreign Operations funding bill (H.R. 4373) includes a broad provision to bar any federal funds from going toward “any project or activity that directly supports or promotes” China’s Belt and Road Initiative on infrastructure development, or for the use of technology developed by the People’s Republic of China.

The House Rules Committee has announced an amendment process for the bill but leaders have yet to say when it might get a floor vote.

In addition to providing $300 million for countering Chinese influence, the bill would also require a State Department report on the Chinese government’s “atrocities, including genocide against Uyghurs” and other minority groups. President Joe Biden and former President Donald Trump have both accused the Chinese government of genocide due to the indefinite detention, sterilization, and forced labor among the Muslim ethnic group.

It would also direct the leaders of U.S. financial institutions to push for funding for projects in Tibet and recommend expanding Voice of America’s and Radio Free Asia’s services in Mandarin, Tibetan, Uyghur, and Cantonese.

The Defense appropriations measure, like the Health and Human Services measure, also includes a ban on funds going to the Wuhan Institute of Virology. The bill’s accompanying committee report also:

• Calls for a Pentagon report on China’s “efforts to establish military bases abroad and United States efforts to work with partner nations to prevent their establishment”;
• Encourages the secretary of Defense to use the Defense Production Act to create a supply chain to produce low-cost titanium to reduce commercial reliance on China and Russia;
• Encourage officials to research the recycling of elements and minerals in industrial waste streams, noting that waste is often exported to China, where it is reprocessed;
• Develop a needs-assessment study to produce battery metals, noting that China is investing state funds to grow its lithium-ion battery supply chain.

‘Too Little and Too Much’

Lawmakers have a long way to go before reaching a final funding deal, but the bipartisan backing for the House’s China-targeted measures suggest they could find support in the Senate.

The measure to ban Chinese purchases of farmland, for example, is not currently in the Senate’s unreleased draft of an Agriculture-FDA funding bill, but senators have discussed adding it, Sen. John Hoeven (R-N.D.), the subcommittee’s ranking member, told Bloomberg Government.

The measures in the appropriations package show a sincere bipartisan concern about China’s military and economic competition with the U.S., but they also highlight the difficulties of addressing those concerns in spending legislation, said Matthew Goodman, senior vice president for economics at the Center for Strategic and International Studies.

“They’re both too little and too much,” Goodman said in an interview.

In some cases, projects only solve half the problem. The ban on funds for projects contributing to the Belt and Road Initiative, for example, would block funds that enable China’s program but doesn’t proactively offer anything to compete with Chinese development, Goodman said. Some other bills in Congress fill in the gaps, such as the U.S. Innovation and Competition Act, which authorizes research and development funding, Goodman said.

In other cases, such as the ban on Chinese companies buying U.S. farmland, restrictions could be too broad. There are more specific methods, such as the Committee on Foreign Investment in the United States to address concerns about those issues, he said.

“Aren’t there other tools to deal with that?” Goodman mused. “We have immigration laws, we have CFIUS, we have our own counterintelligence capabilities. Should we deny ourselves the economic opportunity that foreign investment may bring in order to deal with a specific threat?”

To contact the reporter on this story: Jack Fitzpatrick in Washington at jfitzpatrick@bgov.com

To contact the editors responsible for this story: John Dunbar at jdunbar@bloomberglaw.com; Giuseppe Macri at gmacri@bgov.com