Senate Act to Aid US Competition With China Prompts Backlash From Beijing

The bipartisan bill would buoy Biden administration efforts to reduce supply chain reliance on China.
2021-06-09
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Senate Act to Aid US Competition With China Prompts Backlash From Beijing An employee makes chips at a factory of Jiejie Semiconductor Company in Nantong, in eastern China's Jiangsu province, March 17, 2021.
STR / AFP

The U.S. Senate passed legislation Tuesday that would fund the development of technologies at home to compete with those being backed by China’s government, prompting Beijing to dismiss the move as motivated by “Cold War mentality” and chastise Washington for treating it as an “imaginary enemy.”

The bipartisan U.S. Innovation and Competition Act, also known as the Endless Frontier Act, passed the Senate with a vote of 68-32 and earmarks nearly U.S. $250 billion to promote research into emerging technologies that include computer chips, lithium batteries, robotics, artificial intelligence, and quantum computing—all of which Beijing has worked to nurture at home. The bill now heads to the House, where its future appears murkier.

Introduced by Senate Majority Leader Chuck Schumer and Indiana Republican Senator Todd Young the Senate passage of the act follows an April U.S. intelligence assessment that labeled China a global threat to U.S. interests, as well as a supply chain disruption caused by the coronavirus pandemic that led to questions about U.S. dependency on Chinese manufacturers.

The U.S. Innovation and Competition Act also directs U.S. Secretary of State to publish a list of all state-owned enterprises (SOEs) in China that have engaged in unfair trade practices such as intellectual property theft and forced technology transfers. Under the act, U.S. President Joe Biden would be authorized to impose sanctions on individuals or entities that have stolen U.S. trade secrets or benefitted from such theft.

Young tweeted Tuesday that the vote demonstrates that lawmakers are “united in our fight against the Chinese Communist Party,” while Schumer, without mentioning China specifically, said in a separate tweet that the legislation will allow the U.S. to “out-compete and out-innovate,” as well as “strengthen critical supply chains, partnerships, and alliances abroad.”

Biden, who has retained many of the Trump administration’s tough China policies since taking office in January, also applauded the Senate vote, saying in a statement that the U.S. is “in a competition to win the 21st century, and the starting gun has gone off.”

“As other countries continue to invest in their own research and development, we cannot risk falling behind,” he said. “America must maintain its position as the most innovative and productive nation on Earth.”

Beijing slammed the bill Wednesday, with Foreign Ministry spokesperson Wang Wenbin telling a regular press briefing that it advocates for strategic competition with China and “gravely interferes with China’s domestic affairs,” including its repressive policies in the Xinjiang Uyghur Autonomous Region (XUAR), Tibet, and Hong Kong.

Wang said the legislation is “filled with Cold War zero-sum mentality” and suggested it is the result of U.S. perceptions that China is “an imaginary enemy.”

Reducing China reliance

Biden has made reducing U.S. supply chain reliance on China a priority for his administration since transitioning into the White House.

Ahead of the Senate vote on Tuesday, the Biden administration completed an initial 100-day review of how the U.S. can secure access to critical goods and called for measures including the establishment of a new “strike force” to combat unfair trade practices by China it says are damaging U.S. supply chains. The group would be led by U.S. Trade Representative Katherine Tai and could enforce tariffs against China and other countries.

The White House is also considering an investigation into whether imports of rare earth magnets made largely in China—including neodymium magnets used to manufacture a wide variety of goods including smart phones and electric vehicles—pose a national security threat that could warrant the imposition of tariffs.

The announcement of the review’s findings followed a ban by the Biden administration last week on U.S. investment in around 60 companies in China’s defense or surveillance technology sectors in a bid to limit the flow of money to firms that undermine U.S. security or “domestic values,” which allows listings for human rights abuses.

Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on Biden’s National Security Council, said that measures to hold China to account for unscrupulous trade practices and support U.S. competition in technology development enjoy near unanimous support among lawmakers.

“[There are significant] discussions that are taking place on Capitol Hill on the U.S. Innovation and Competition Act … which is an effort to make clear that the new ramparts of competition that will define American leadership increasingly will be in technology, and we're determined to take steps to run faster,” said the Asia czar, speaking at an event hosted by the Center for a New American Security on Tuesday.

Seeking global support

Lisa Curtis, who was senior director for South and Central Asia on Trump’s National Security Council, said that Biden’s challenge in building support among allies for his administration’s China policies will be apprehension around a return to the “America First” style of foreign policy his predecessor had embraced.

Biden arrived in the U.K. Wednesday and will meet with G-7 leaders in Cornwall, England on his first trip overseas as president before traveling to Brussels to attend the NATO summit and a U.S.-European Union summit. He told reporters before departing the Washington area that the goal of his trip is to make clear to China and Russia that “Europe and the United States are tight.”

Curtis said that in addition to reducing reliance on China for supply chains, the U.S. hopes to caution its allies that as Beijing builds partnerships through the development of technology such as 5G infrastructure, “it’s also enhancing its ability to conduct sabotage and espionage on that digital infrastructure.”

“It’s increasing its economic coercive power and it’s influencing how these technologies are used,” she said.

“And when it comes to surveillance technologies, its export of these technologies really kind of normalizes the illiberal use of that technology because of the way China has been using it, creating this comprehensive architecture in which it can observe and limit the digital activity of its own citizens.”

Such technologies have been a key component of Beijing’s repression of groups it deems a “threat” to the power of the CCP.

Since early 2017, authorities are believed to have held up to 1.8 million Uyghurs and other Muslim minorities in a vast network of internment camps in its Xinjiang Uyghur Autonomous Region (XUAR)—part of what the U.S., Canada, The Netherlands, and the U.K. recently designated a state-backed policy of genocide in the region.

High-tech digital surveillance systems have been used to single out people for detention in the XUAR, as well as to target pro-democracy protesters in Hong Kong and maintain tough restrictions on the religious and other rights of Tibetans.

Reported by RFA’s Mandarin Service. Written in English by Joshua Lipes.

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