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The US Senate has passed a law that provides more than $ 250 billion to help maintain a competitive advantage over China in areas such as artificial intelligence, quantum computing and semiconductors.
The Senate voted on Tuesday 68-32 to pass the bill, underscoring the broad bipartisan support in Congress to take action to counter Beijing. The U.S. Innovation and Competition Act brings together various China-related measures into the largest industrial policy piece of legislation in decades.
The bill provides $ 52 billion to strengthen the semiconductor industry as the United States increasingly relies on countries such as Taiwan as China strives to expand its chip capacity.
Part of the bill, known as the Endless Frontier Act, provides around $ 120 billion for investments in technologies such as AI and quantum computing that China has prioritized as part of its policy in high-end technology.
In addition to providing huge investments in technology, the 1,445-page law includes a host of measures to constrain China. One would ban government agencies from purchasing drones made by Chinese companies, including DJI, the world’s largest commercial drone maker.
The legislation would also prohibit federal employees from downloading TikTok, the popular Chinese-owned short video app, to government electronics.
The bill would require the State Department and the intelligence community to provide Congress with a report on Chinese influence in international institutions, including the World Bank, IMF, UN and World Trade Organization .
Confronting China is the only issue in Congress where there is bipartisan consensus, with lawmakers agreeing on the need to take a stronger stance against Beijing. Politicians have introduced hundreds of bills to punish China on issues such as its crackdown on Muslim Uyghurs in Xinjiang to its military activities in the South and East China Seas.
U.S. officials are also increasingly aware of the growing role of technology in the competition between the two countries.
Kurt Campbell, the top Indo-Pacific politician in the White House, said on Tuesday that the legislation was a critical part of Washington’s efforts to make itself more competitive as part of a broad strategy to tackle China.
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Campbell called the Endless Frontier Act “an effort to make it clear that the new bulwarks of competition that will define American leadership will be increasingly technological and we are determined to take the necessary steps to move faster.”
The push to increase investment in technology comes amid warnings that China is quickly catching up, and in some cases already overtaking, the United States in increasingly important technologies for military uses.
The National Commission on Artificial Intelligence warned in March that China could overtake the United States as the global AI superpower within a decade. Eric Schmidt, the former chief executive of Google who chaired the commission, said the United States was “on the verge of losing” its lead in microelectronics due to its overdependence on Taiwan.
The House of Representatives is expected to start debating its own China bill next week. While the Senate bill was easily passed, there should be an in-depth discussion in the House as to how the two houses can combine their respective legislation into a package that would garner sufficient support across Congress and would be promulgated by President Joe Biden.
Marsh Notes
Rana Foroohar and Edward Luce discuss every Monday and Friday the main themes at the intersection of money and power in American politics. Subscribe to the newsletter here
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