Washington Update

Earlier this week, Select Committee on the CPP Chair Mike Gallagher (R-WI) returned from a surprise visit to Taiwan. In a Wall Street Journal op-ed published upon his return, he noted that nearly all of the Taiwan officials he met with saw the Russian invasion of Ukraine as a wake-up call, and he argued that it must be a priority for the United States to clear the nearly $20 billion backlog of arms sales to Taiwan.

Last Friday, the Biden administration added six Chinese entities to the Entity List due to their connections to China’s surveillance balloon program. Yesterday, China responded by adding the defense and missile subsidiaries of two US companies to its Unreliable Entity List (UEL), the first time China has actually used the tool since it was created in 2020.

On Tuesday evening, President Joe Biden in his second State of the Union address explained how his administration has strengthened its investments in US innovation, critical technologies, and strategic alliances in order to compete with China and defend US interests. Additionally, Biden announced plans to require all construction materials—such as lumber, glass, drywall, and fiber optic cables—used in federal infrastructure projects to be made in America.

The Netherlands and Japan have reportedly reached an agreement with the United States to join its efforts to restrict sales of advanced semiconductor manufacturing equipment to Chinese entities. The Netherlands will reportedly restrict ASML Holding NV from selling deep ultraviolet lithography machines to China, and Japan is expected to impose similar restrictions on Nikon Corporation and Tokyo Electron.

Details about the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party are continuing to come out this week, with Chair Mike Gallagher (R-WI) loosely outlining a prospective agenda and Speaker of the House Kevin McCarthy (R-CA) appointing the committee’s Republican members.

On Wednesday, US Treasury Secretary Janet Yellen met with Chinese Vice Premier Liu He in Zurich in their first face-to-face meeting since Yellen took office. Both readouts and separate remarks struck a markedly positive tone, emphasizing deeper communication, responsibly managing the relationship, and working together on shared challenges like climate change.

On Tuesday, the House formally established the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party in one of the first votes of the new Congress. The majority of Democrats joined the entire Republican House caucus in voting for the measure. During floor debate for the resolution, newly elected Speaker of the House Kevin McCarthy (R-CA) promised the committee would take an approach that focuses on shared bipartisan challenges related to China.

On Sunday, Secretary of State Antony Blinken spoke over the phone with newly appointed Chinese Foreign Minister Qin Gang at the end of his ambassadorship to the United States. According to the embassy readout, the conversation recalled “in-depth and constructive” meetings between the two during Qin’s tenure, noting that Qin hopes to continue working closely with Blinken in his new role.

In a significant breakthrough, the Public Company Accounting Oversight Board (PCAOB) announced on Thursday that it was able to secure complete access to inspect and investigate audit firms in China for the first time in history. PCAOB Chair Erica Williams credited the access to the Holding Foreign Companies Accountable Act (HFCAA), which Congress passed in 2020.

On Thursday, House Republican Leader Kevin McCarthy (R-CA) announced his selection of Representative Mike Gallagher (R-WI) as the chair of the planned Select Committee on China next Congress. Gallagher currently serves as a member of the House Permanent Select Committee on Intelligence and the House Armed Services Committee.