Legislation has been introduced in the U.S. Senate to support the nation’s response stemming from financial threats by the Chinese Communist Party.

The bipartisan China Financial Threat Mitigation Act of 2024 is led by Sens. Mark Warner, D-Va., Mike Rounds, R-S.D., and Cynthia Lummis, R-Wyo. Companion legislation was introduced and passed last year in the House sponsored by Reps. Abigail Spanberger, D-Va., and Roger Williams, R-Texas.

The act would “require deeper analysis of potential financial threats from the CCP that may have substantial impacts on the U.S. economy.”

The legislation would require the U.S. Department of Treasury, “in consultation” with the State Department, Federal Reserve, U.S. Securities and Exchange Commission, and Commodity Futures Trading Commission, to report on potential threats against the nation by China’s financial sector.

The legislators say the report must address the “effects the reforms to China’s financial sector have” on American and global financial systems, policy descriptions the U.S. is adopting to protect national interests, an analysis and description of any risks from China that could impact the economic stability of the American and global economy; and recommendations on action that could “strengthen international cooperation to mitigate risks” while protecting U.S. interests.

A report from the U.S. China Economic and Security Review Commission, cited by the House, highlighted vulnerabilities in dealing with the Chinese banking system.

“Exchange rates are the most likely channel through which economic pain could be transmitted to U.S. investors. But a number of other channels, such as the inclusion of Chinese equities into major international indexes, are also raising the exposure of U.S. investors and savers to China’s risky banking system,” according to the report.

Warner warns of increased Chinese “aggression” toward the U.S., saying the country must take steps to protect the financial sector.

“As the Chinese Communist Party continues to ramp up aggression towards the United States, it is crucial that we take proactive steps to protect U.S. institution and interests, and out financial sector is no exception,” said the senator. “This bipartisan legislation takes the first step towards ensuring that the U.S. is prepared to counter the threat posed by the CCP by shoring up our financial systems.”

Rounds warns of the CCP's major influence over China’s banking system and its ability to manipulate “desired outcomes.”

"The Chinese Communist Party retains the ability to intervene decisively in China’s banking system to achieve desired outcomes – a reality that poses potential risks to American businesses,” said Rounds. “To counter this, we need a clear understanding of how China’s financial sector impacts the U.S. economy and global financial systems.”