On December 12, the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (the “Select Committee”) adopted a broad set of policy recommendations intended to reduce the United States’ economic and technological ties with China across a broad swath of the economy.

The Select Committee passed the 53-page report, containing 130 recommendations, on a bipartisan, though not unanimous, voice vote.  The report is organized around three pillars:

  1. “Reset the Terms of Our Economic Relationship with the PRC,” emphasizing the scope of the United States’ strategic dependence on China;
  2. “Stem the Flow of U.S. Capital and Technology Fueling the PRC’s Military Modernization and Human Rights Abuses,” which calls for increasingly hawkish trade and investment-review policies; and
  3. “Invest in Technological Leadership and Build Collective Economic Resilience in Concert with Allies,” focused on strengthening the workforce, critical supply chains, and related capabilities.

The report urges Congress and the Administration to deploy a variety of tools to compete with China, including by building on the Biden Administration’s recent executive orders on artificial intelligence and outbound investment.  With respect to trade, the Select Committee recommends implementing stricter export controls and moving China to a new tariff column, effectively revoking its permanent normal trade relations (PNTR) status.  Furthermore, the report calls for broadly expanding authorities for the Committee on Foreign Investment in the United States (CFIUS), as well as for investments in international economic development to counter China’s efforts to influence the economic affairs of trading partners through its Belt and Road initiative.  The report recommends several steps to protect U.S. innovators from intellectual-property-related abuses and sanction companies in China that threaten U.S. national security.

In addition, the Committee recommended several sector-specific reforms in the report. These include strengthening domestic capacity for critical technologies, including semiconductor manufacturing, battery recycling, and raw-materials processing; heightening disclosure requirements for market participants and private-equity firms, and prohibiting investment in entities that violate human rights; regulating federal procurement of active pharmaceutical ingredients; and funding technological research, workforce development, and education.

While the report does not specifically call for the United States to “decouple” economically and technologically from China, it notes that “[r]egardless of the choice of words, the United States must now chart a new path that puts its national security, economic security, and values at the core of its economic engagement with the PRC and invests in long-term American technological leadership.”  In response to the report, a spokesman for the Chinese Embassy in Washington, Liu Pengyu, characterized the report as “pushing for decoupling and severing supply chains, and added that the recommendations would “undermine the international economic and trading order.”

Select Committee Chairman Mike Gallagher (R-WI) described the report’s approach as “balanced,” and Ranking Member Raja Krishnamoorthi (D-IL) noted that it presents a “unified message to the CCP” and U.S. allies abroad.  One member, Rep. Jake Auchincloss (D-MA), publicly expressed opposition, noting that while he agrees with much of the report, he has concerns about promoting “protectionism.”  Another Select Committee member, Rep. Ritchie Torres (D-NY), raised concerns with the report’s “vague” recommendation for changing China’s trade status.

Other committee leaders also commented on the report.  A spokesperson for Ways & Means Committee Ranking Member Richie Neal (D-MA) criticized the Select Committee’s recommendations for lacking cohesion, noting several are “better suited for headlines than guidelines.”

Looking ahead, we expect Rep. Gallagher and other members to propose legislation reflecting many of the report’s recommendations that committees of jurisdiction may consider in the months ahead.  The Select Committee is authorized through the end of the 118th Congress, and we can expect it will continue to investigate, hold hearings, and report additional factual findings and legislative recommendations through the end of 2024.

Photo of Holly Fechner Holly Fechner

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of…

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of the Covington’s Technology Industry Group and a member of the Covington Political Action Committee board of directors.

Holly works with clients to:

  • Develop compelling public policy strategies
  • Research law and draft legislation and policy
  • Draft testimony, comments, fact sheets, letters and other documents
  • Advocate before Congress and the Executive Branch
  • Form and manage coalitions
  • Develop communications strategies

She is the Executive Director of Invent Together and a visiting lecturer at the Harvard Kennedy School of Government. She serves on the board of directors of the American Constitution Society.

Holly served as Policy Director for Senator Edward M. Kennedy (D-MA) and Chief Labor and Pensions Counsel for the Senate Health, Education, Labor & Pensions Committee.

She received The American Lawyer, “Dealmaker of the Year” award. in 2019. The Hill named her a “Top Lobbyist” from 2013 to the present, and she has been ranked by Chambers USA – America’s Leading Business Lawyers from 2012 to the present.

Photo of Matthew Shapanka Matthew Shapanka

Matthew Shapanka draws on more than 15 years of experience from Capitol Hill, private practice, state government, and political campaigns to counsel clients significant legislative, regulatory, and enforcement matters. He develops and executes complex, multifaceted public policy initiatives for clients seeking actions by…

Matthew Shapanka draws on more than 15 years of experience from Capitol Hill, private practice, state government, and political campaigns to counsel clients significant legislative, regulatory, and enforcement matters. He develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies, many with significant legal and political opportunities and risks. Matt also leads the firm’s state policy practice, advising clients on complex multistate legislative and regulatory policy matters and managing state advocacy efforts.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters before the Committee, including federal election and campaign finance law, Federal Election Commission nominations, and oversight of legislative branch agencies, U.S. Capitol security, and Senate rules and regulations. Most significantly, Matt led the Committee’s staff work on the Electoral Count Reform Act – a landmark bipartisan law enacted in 2022 to update the procedures for certifying and counting votes in presidential elections —and the Committee’s joint (with the Homeland Security Committee) bipartisan investigation into the security planning and response to the January 6, 2021 attack on the Capitol.

Both in Congress and at Covington, Matt has prepared dozens of corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at congressional committee hearings and depositions. He is also an experienced legislative drafter who has composed dozens of bills introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, and the election and political laws of states and municipalities across the country.

Before law school, Matt worked in the administration of former Governor Deval Patrick (D-MA) as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on policy, communications, and compliance matters for federal economic recovery funding awarded to the state. He has also worked for federal, state, and local political candidates in Massachusetts and New Hampshire.

Samuel Klein

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the…

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the firm’s Public Policy group, Sam supports strategic advocacy across a breadth of policy domains at the federal, state, and local levels.

Sam spent one year as a law clerk at the Federal Election Commission. His prior experience includes serving as an intern to two senior members of Congress and helping clients communicate nuanced policy concepts to lawmakers and stakeholders as a public-affairs consultant.