Combatting Communist China
by Senator Pete Ricketts
Communist China is the greatest threat to the American way of life. Under Dictator Xi Jinping, the Chinese Communist Party is actively threatening the peace and prosperity that we’ve maintained for over 80 years.
While undermining the security of the world, they are also using our financial system to fund their malicious activities. The same is true for abusive companies and bad actors under Beijing’s control. They are using our stock market to raise money for their military industrial base and to oppress their people. I am introducing four bills to stop this.
It’s important that our country’s hard-earned dollars don’t go into the hands of the Chinese Communist Party. My bills target sanctioned and adversarial companies like those companies that use coerced labor, abuse human rights, or run China’s surveillance state. These bills also target companies that serve as research and development labs for the Communist military. The PRC Military and Human Rights Capital Markets Sanctions Act that I introduced would prohibit Americans from investing in these sanctioned companies, which are opposed to the values and interests of the United States.
By Chinese law, every company in China has to do whatever the Chinese Communist Party tells them to do. That’s why I want to disincentivize investments in China’s Communist-controlled companies. If Americans want to invest in Chinese firms that aren’t sanctioned, they can. But index funds are accounts where people are trying to save for retirement or education. My No China in Index Funds Act would make sure that Americans aren’t forced to unknowingly or unwillingly invest in Chinese firms through index funds. These index funds shouldn’t force investments that benefit Communist China.
Similarly, college endowments are massive investment vehicles for a few schools in the country. The Protecting Endowments from Our Adversaries Act would disincentivize these endowments from investing in adversaries like Communist China, whether directly or indirectly. Simply put, our nation’s most prestigious colleges should not be making money off of companies that strengthen the Communist military. That’s why I want to tax private college and university endowments of over $1 billion dollars for their investments in Chinese companies that support the Chinese military.
Communist China actively threatens the post-World War II system that has kept peace and fostered prosperity for over 80 years. But Dictator Xi Jinping isn’t America’s only adversary. That’s why I also introduced the No Capital Gains Allowance for American Adversaries Act. This bill would target stocks and securities associated with Chinese, Russian, Belarusian, Iranian, and North Korean companies. It would treat profit from these stocks as ordinary income. That means these investments would not be eligible for the lower capital gains tax rates. My bill would also eliminate the “step-up in basis” for assets inherited at death. It would direct the Securities and Exchange Commission to maintain a public list of securities covered by the Act. All of this will create a disincentive for Americans investing in companies opposed to the United States.
As a member of the Foreign Relations Committee, I’m focused on combatting Communist China. Communist China is our greatest external threat. We must deter China and protect American leadership to maintain peace and stability.
There’s no reason our hard-earned dollars should fund Communist threats, expand foreign military development, and disrupt American prosperity. Let’s not give Communists tax benefits that are meant for American citizens. Let’s work with better trade partners, not with abusive companies and other bad actors. We can’t allow our markets to fund our adversaries like Communist China. Let’s let America’s markets benefit Americans.
My team and I are here to serve you. Contact us anytime by phone at 202-224-4224. You can also view my website at http://www.ricketts.senate.gov/contact.
