The bipartisan leadership of the Senate Intelligence Committee is pressing the Biden administration to intensify its efforts to curb China’s military advances and repression of religious and ethnic minorities — and to do so “immediately.”
The bipartisan push is significant, highlighting that influential Democrats like Warner are willing to take on the administration, urging it to do more with its powers — especially Treasury sanctions.
“I think the administration is moving pretty aggressively, but there’s always more it can do,” Warner said this week.
Last fall, the administration imposed far-reaching export controls on China, limiting its access to advanced semiconductors that can be used to develop nuclear and hypersonic weapons and technologies that enable mass surveillance and human rights abuses. Last month, the administration brokered deals with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China.
However, Warner said, the U.S. government was slow catching on to the risks of Huawei, a prominent Chinese telecommunications gear-maker that is now subject to export controls, and in fostering the development of a domestic semiconductor chip industry.
In particular, the duo are asking Treasury Secretary Janet L. Yellen to sanction more Chinese companies identified as aiding China’s repression of Uyghur Muslims in its Xinjiang region, including firms that the Commerce Department has blocked from receiving exports over alleged human rights abuses there.
They have asked Commerce Secretary Gina Raimondo to identify the top five most critical high-tech sectors across the U.S. economy that are not subject to export controls.
“I want to make sure that we know what the domains are that we need to be competitive in and not fall behind,” Warner said, noting that artificial intelligence is one. Advanced energy and synthetic biology are others. “Let’s get more of this information out.”
He said he wants the administration to develop a “comprehensive strategy” that “doesn’t go after a company by name” but which lays out “how we deal with foreign technology that has a national security intersection.” Doing so, he said, may require legislation.
One tool Commerce uses is the Entity List, a trade blacklist that restricts designated firms from receiving specified exports on national security grounds. Commerce has placed a number of Chinese firms on the Entity List that Treasury has not designated for sanctions, the senators wrote. A full-blocking Treasury sanction would freeze any assets the company has in the United States and prohibit any financial transactions between U.S. entities and the targeted company. It would apply to any company subsidiaries, or entities in which the company has more than 50 percent ownership or control. Most banks in Europe and elsewhere that deal in dollars abide by the sanction.
In 2020, Treasury sanctioned Xinjiang Production and Construction Corps, a paramilitary organization, over human rights abuses in Xinjiang. Warner and Rubio are pressing Treasury to explain why it hasn’t posted any information on its website about XPCC’s subsidiaries. “The XPCC’s extensive network of subsidiaries remains opaque to many U.S. investors and companies, which reportedly continue to do business with XPCC,” they wrote.
Administration officials pushed back on the letter.
“While we don’t preview future or possible sanctions actions, Treasury has already used a variety of our tools to expose and hold accountable perpetrators of serious human rights abuse in Xinjiang, including against private firms in China’s defense and surveillance technology sectors who are actively cooperating with the government’s efforts to repress members of ethnic and religious minority groups,” the Treasury Department said in a statement to The Washington Post.
With regard to repression of ethnic and religious minorities in Xinjiang, Treasury has imposed sanctions on four individuals and 14 companies. The list is much longer for human rights abuses committed in China, the department said.
The department had no comment on the question of disclosing XPCC subsidiaries.
The Commerce Department in a statement to The Post said only: “The Department can confirm receipt of the Senators’ letter and will respond appropriately.”
Aligning sanctions with entity listings would be a major step, analysts said.
Although Huawei and Hikvision, a Chinese firm that makes surveillance cameras, have been placed on the Entity List, placing them under Treasury sanction would be “massively impactful,” as it would cut off essentially all Western financial transactions with them, said Eric Sayers, a managing director at Beacon Global Strategies.
This is not the first time Warner and Rubio have teamed up to pursue policy and oversight aims. They have tangled with the administration over its delay in shooting down what U.S. officials said was a Chinese surveillance balloon this month as it traversed the United States, and on whether the committee will be briefed on classified documents found at the homes of President Biden and former president Donald Trump. A Justice Department briefing on the documents will be held at the end of the month for the Gang of Eight — the bipartisan leadership of both chambers and their intelligence panels, Warner said.
Concerns about China’s military modernization and its aggressive actions near Taiwan are one area where there is rare bipartisan agreement in Congress. Last week, the House voted unanimously to condemn Beijing for a program of aerial espionage after the spy balloon incident.
The Biden administration is engaged in a delicate effort to press China over human rights, constrain its ability to obtain sensitive Western technology and rally allies and partners to join the campaign — all while seeking to “manage” the relationship in a “responsible” way, avoiding full-blown conflict.