US businesses in China must be transparent, with more restrictions in place, congressional advisory panel says

‘If it makes you look bad, maybe you shouldn’t be involved in it,’ member of US-China Economic and Security Review Commission says of American firms in China

However, panel says its recommendations are not meant to prevent US businesses from operating in China or from investing in Chinese businesses

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Business subsidiaries supporting China’s military-industrial ecosystem should be identified and evaluated, according to a US congressional advisory panel. Photo: AP

Published: 1:00am, 20 Nov 2021Updated: 2:17am, 20 Nov 2021

The US government’s leading advisory panel on China policy is calling for more transparency from American businesses operating in China, and it has recommended further restrictions on investment in US-listed Chinese stocks, as well as comprehensive sanctions on Chinese companies and their subsidiaries when it comes to “sensitive” technology.

The US-China Economic and Security Review Commission’s annual report, released on Tuesday, outlined 32 recommendations to Congress, including new legislation to screen the offshoring of critical supply chains and production capabilities to China.

Kerr Gibbs, president of the American Chamber of Commerce in Shanghai, asked what the commission expects from the American business community, given the changing nature of US-China relations.

Several commissioners from the US-China Economic and Security Review Commission responded during the live-streamed discussion on Tuesday, saying that greater transparency was needed from US businesses when it comes to drafting laws to regulate US investment and trade with China.

“Stop getting in the way of transparency,” said Derek Scissors, one of the commissioners who spoke following the release of the annual report. “Stop saying, ‘I don’t want to disclose this’. Stop saying, ‘I don’t like the light shone on my activities in China because it makes me look bad’. You know, guess what, if it makes you look bad, maybe you shouldn’t be involved in it.”