Written by Matteo Moran

What’s happening: House Republicans are considering a bill that would bring more scrutiny to American investments in China. The bipartisan legislation brings reporting requirements on investments going towards national security-sensitive sectors such as AI.

• The debate: House Foreign Affairs Committee Chairman Michael McCaul (R-TX) supports the bill, while Financial Services Committee Chairman Patrick McHenry (R-NC) prefers a more traditional, business-friendly approach.
• What they’re saying: McCaul says additional transparency is needed to properly safeguard sensitive technology critical to American security. Rep. McHenry warns that his legislation will handicap business investment into Chinese markets and diminish American influence.

Why it matters: Most American voters — especially Republicans — have increasingly taken a negative view of China, and the White House acknowledges difficult relations. But Wall Street still has influence in the GOP as the old pro-business class of the party resists a tough approach.

The stakes: Congress has an opportunity to enhance American national security and hit China while it's economically weakened. China is battling economic turmoil as its banking and housing sectors facing a severe debt crisis. The new legislation could slow foreign capital flow into China and further decouple America’s economy from the country.