Chinese embassy pressures U.S. companies to oppose Chinese bills: Sources

China has pushed U.S. administrators, companies and business groups in recent weeks to fight Chinese bills in the U.S. Congress, four sources familiar with the initiative told Reuters, in letters to and meetings with a wide range of actors in the business community. .

Letters from the Chinese embassy in Washington pressured administrators to urge members of Congress to change or remove specific bills aimed at strengthening U.S. competitiveness, according to sources and the text of a letter sent by the embassy’s economic and trade office seen by Reuters.

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Chinese officials have warned companies that they would risk losing market share or revenue in China if the legislation becomes law, according to the text of the letter.

The Chinese embassy and the head of its economic and trade office did not return separate requests for comment.

Sources said China’s request also left some individuals who received a letter that they could be viewed as violating the Foreign Agents Registration Act (FARA) if they lobbied lawmakers on similar issues in the future.

As a result, none of the sources wanted to be identified as received or saw the letter.

Extensive legislation to boost U.S. competition with China and fund the required production of semiconductors, known as the U.S. Innovation and Competition Act (USICA), passed the Senate with bipartisan support in June. A related bill in the House of Representatives called the Eagle Act, which is more strictly policy-focused, stalled because Congress was concerned about other domestic initiatives.

The language in the letters, which Reuters determined was sent separately to a large number of people, explicitly calls on companies to oppose USICA and the Eagle Act.

Beijing sees the measures taking a hard line on China on human rights and trade issues as part of a U.S. effort to counter the country’s growing economic and geopolitical strength.

“We sincerely hope that you … will play a positive role in encouraging congressmen to abandon zero-mindedness and ideological prejudice, stop propagating negative China-related bills, eliminate negative provisions, and create favorable conditions for a bilateral economy. and trade cooperation before it is too late, ”the Chinese embassy said in a letter sent in early November.

Reuters confirmed the common language of the letter with the four sources.

“The result of these related bills with negative effects will not be that the interests of U.S. companies will be protected while those of Chinese companies will suffer. It will only hurt everyone,” it said.

“Promotion of China’s supply chain will inevitably result in a decrease in China’s demand for U.S. products and U.S. companies’ loss of market share and revenue in China, ”it said.

Two of the sources said similar messages were conveyed in meetings with staff of the Chinese embassy.

“It is a direct request from a foreign government,” one of the sources said, highlighting the implications for FARA, which requires people acting on behalf of a foreign power or political party to disclose those relations to the Ministry of Justice.

A second source said the approach seemed aimed at companies delaying the legislative process rather than completely blocking the bills.

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