On Monday, U.S. Rep. Pete Visclosky, D-1st, testified before the U.S.-China
Economic and Security Review Commission during its hearing on China’s
state-owned and state-controlled enterprises.
Excerpts from Visclosky’s testimony:
“I am concerned that China’s state-owned enterprises will only continue to
gain influence in our country and around the world in the future, and it is
my hope that through hearings and discussions such as the one that you are
holding today, we can begin to develop the appropriate policies that ensure
American workers and American companies can fairly compete in a world with
Chinese state-owned enterprises. . . .
“We can see why the United States is so interested in this type of
investment from an article in the Wall Street Journal . . . entitled,
“In the Heart of the Rust Belt, Chinese Funds Provide the Grease.” This
article stated that Nexteer Automotive in Saginaw, Mich., was on the verge
of closing and letting go of 3,000 jobs. But then a Chinese state-owned
enterprise, Pacific Century Motors, which is controlled by the Aviation
Industry Corporation of China and Beijing E-town International Investment
Corporation, bought the auto-parts maker for $450 million. These 3,000
workers, instead of looking for their next employment opportunity, are now
installing new equipment, thanks to the investment of a Chinese state-owned
“So while this appears to be a positive investment initially, I remain very
cautious. My concern is that there is no means for oversight or recourse for
American workers if ulterior motives are involved and if the original
investment dollars were generated through state subsidies that rendered
other Americans unemployed.
“The above mentioned case is an apparent win for the American worker, but
what if the motive for the investment of a Chinese state-owned enterprise is
to gain technology developed in the United States for export to China? What
if the motive for the investment of a Chinese state-owned enterprise is to
operate an American facility so that they can avoid paying American tariffs?
Should we reward the use of investment dollars secured through practices
that violate international trading standards and that have had an abusive
effect on existing businesses in our country? I do not believe these fears
are speculative in nature. I do not assume that Chinese state-owned
enterprises operate based solely on market forces. We should have a way to
transparently and fairly assess their investments.
“Currently, the only mechanism that America has to examine investments from
Chinese state-owned enterprises is through the Committee on Foreign
Investment in the United States (CFIUS) . . . .
“Members of the Commission, we must ensure that American workers are able to
compete on a level playing field. China has consistently demonstrated that
they are not adhering to fair trading rules, that they are providing illegal
subsidies to their industries, and that they are dumping their products on
our shores. They have repeatedly shown their neglect in enforcing
environmental and labor standards. They have blatantly ignored patent and
“Again, I do not believe that we should reward state-owned enterprises that
have demonstrated such actions, and I assure you that I am committed to
working to develop a way to transparently and fairly assess their
investments. The American worker deserves no less.”