US President Donald Trump on Thursday signed a sweeping defence bill that would restrict US outbound investment in Chinese technology and curb federal contracts with Chinese biotechnology companies, amid an uneasy trade truce between Washington and Beijing.
The bill, known as the National Defence Authorisation Act (NDAA), cleared both the House of Representatives and Senate earlier this month after months of negotiation.
The Senate passed the bill on Wednesday in a 77-20 vote, following its passage in the House 312-112 last week.
Enacted annually for over six decades, the NDAA is one of a few significant pieces of legislation considered to be “must-pass” and often includes measures not strictly tied to defence. The legislation was finalised amid a fragile easing of US-China trade tensions, following months of tit-for-tat tariffs and export controls.
This year, key provisions include the Biosecure Act, which targets executive-branch contracting with Chinese biotech companies, and the Foreign Investment Guardrails to Help Thwart (FIGHT) China Act, which targets US investments in Chinese technologies with military applications. Lawmakers from both parties have long sought both measures.
Last year, the Biosecure Act was dropped from consideration after a Democratic lawmaker intervened to protect jobs tied to one targeted Chinese company in his district.
The version included in this year’s NDAA does not name specific companies, but rather directs the executive branch to come up with a list of “biotechnology companies of concern” that would be blocked from federal contracts, grants or loans.
Similarly, a predecessor to the FIGHT China Act, which codifies many of the Treasury Department’s existing restrictions on investments in sectors such as quantum information technologies and semiconductors, faced opposition from a Republican lawmaker who argued that such legislation would limit Western firms’ influence in China.
Congress folded numerous measures tied to the US State Department into this year’s bill, including mandates to report on China’s diplomatic presence worldwide and to develop a strategy to counter foreign information manipulation.
The legislation expands the department’s regional China officer programme, creating at least 20 foreign service officer positions with five-year tenures to monitor and provide expertise on Beijing’s activities in economics, infrastructure, tech and defence.
It also establishes several new offices – Ambassador-at-Large for the Arctic, Ambassador-at-Large for the Indian Ocean region and the Countering the People’s Republic of China Influence Fund Unit – all mandated to push back against “malign” activity by Beijing.
The more than 3,000-page bill also calls for a new Inner Mongolia section within the US mission in China to monitor developments in areas such as human rights, critical minerals mining and environmental degradation.
Supporters of key China provisions cheered the bill’s passage in their chambers.
“American venture capitalists have provided billions of dollars to Chinese companies that work with the People’s Liberation Army to develop the technologies of the future. They must stop funding our adversary,” said John Moolenaar, the Republican chair of the House Select Committee on the Communist Party, referring to the outbound investment legislation.
“Biosecure is also a major win ... It will protect the genetic data of Americans while securing our pharmaceutical supply chains.”
Meanwhile, BGI Group, a Chinese genomics company that has previously drawn scrutiny from US lawmakers, said the biosecurity provisions could lead to “higher healthcare costs and reduced access to advanced life-science technologies” for Americans.
In a statement, the company said it did not serve patients in the US and did not have access to Americans’ genetic data, calling allegations that it poses national security risks “unfounded”.
The NDAA authorises Pentagon programmes, but does not fund them. Congress must separately pass funding in a spending bill for the financial year ending in September 2026.
This year’s NDAA authorises about US$900 billion in spending, US$8 billion more than the White House’s request.
Notably, this year’s bill does not include the Guaranteeing Access and Innovation for National (GAIN) AI Act, which would require American semiconductor firms to prioritise US customers for AI chips before selling them to China.
The White House reportedly opposed that provision after protests from US chip company Nvidia, which argued that no US customers were experiencing shortages of its products.
This year’s bill also does not include the Securing American Funding and Expertise from Adversarial (SAFE) Research Act, which would impose funding restrictions and require extensive disclosures regarding research collaborations with Chinese entities.
Critics from the scientific community have warned that the provision could end valuable international collaborations, penalise good-faith errors and undermine US scientific and technological competitiveness.
Still, the bill includes some provisions meant to improve research security, including one that requires the intelligence community to identify academic, scientific, or technical collaborations that may support military modernisation and weapons testing in China. -- SOUTH CHINA MORNING POST
