In June of this year, the U.S. Senate, with bipartisan support, passed a bill aimed at improving the competitiveness of the United States against China and funding much-needed semiconductor production, the United States Innovation and Competition Act (USICA) (abbreviated as ” Innovation and Competition Law).
According to Reuters, the bill is currently at a standstill in the House of Representatives, and it is facing difficult challenges to formally become law before next year. Although the Biden administration has repeatedly claimed that “competition” with China is a top priority, and the Democrats also control the Senate and House of Representatives, members of the House of Representatives want to enact their own China-related bill, the “Eagle Act,” rather than considering it. The “Innovative Competition Law” passed by the Senate.
Five months have passed, and the U.S. House of Representatives has not voted on its own “Eagle Act,” nor has it passed the “Innovative Competition Act.” As the legislative agenda is too crowded, there is very little time to pass the law in 2021, and it may be postponed to 2022.
The U.S. Senate voted 68 to 32 in June to pass the “Innovative Competition Act.” This cross-party legislation was promoted by the Democratic leader of the Senate, Schumer, and is considered “rare industrial policy legislation.” The content authorizes US$190 billion (approximately HK$1,500 billion) of funds to be used in areas that compete with China, including semiconductor production, technical security, and American labor training. In addition, through 54 billion U.S. dollars (about 420 billion Hong Kong dollars) funding, to increase the United States in the production and research of semiconductor and telecommunications equipment. The bill will also automatically impose sanctions on Chinese companies engaged in the theft of intellectual property rights or cyber attacks in the United States.
Schumer, leader of the Democratic Party of the United States Senate.
The bill is currently stranded in the House of Representatives and the chances of passing it within this year are slim, but some of its provisions may be passed by other legislation within a few weeks. Schumer pointed out on the 16th that part of the “Innovation and Competition Act” will be included in the “National Defense Authorization Act” (NDAA). He said in a speech in the Senate: “Our supply chain crisis needs to be resolved, and we can’t wait any longer.”
Earlier there were reports that the Senate would split the “Innovative Competition Law”. Take out the “Creating Beneficial Incentive Measures for Chip Production Act” (CHIPS), which provides $52 billion in semiconductor manufacturing incentives, and incorporate it into the “National Defense Authorization Act” that should be passed before the end of the year.
The National Defense Authorization Act is one of the few major legislations that must be passed every year, and it often serves as a carrier for a series of policy issues. This strategy does not guarantee that the “Innovative Competition Law” will become law, but it increases the likelihood that some of the most important provisions will be approved.
In fact, the resistance to the “Innovation and Competition Law” that curbs China’s development does not only come from the House of Representatives, but also from other sources. Due to the content of the amendments to the bill, it is required to ensure that the funds of the bill will not flow to China or other US competitors, which has triggered opposition and protests from business groups such as the American Chamber of Commerce and the US-China Business Council.
The “Innovation and Competition Law” intends to counter the development of China’s science and technology.
Reuters recently quoted sources as saying that the Chinese Embassy in the United States recently wrote to a number of American corporate executives, companies, and commercial organizations, asking them to urge members of the US Congress to stop or change related laws against China. The letter stated that it is hoped that relevant companies urge members of the US Congress to abandon “zero-sum thinking” and ideological prejudice, and create favorable conditions for bilateral economic and trade cooperation; and warned that the relevant bills against China will not help protect the interests of American companies, and it is also helpful. Damage to Chinese companies will only hurt everyone in the end.
In response to this report, Chinese Foreign Ministry spokesperson Zhao Lijian said on the 15th that the China-related content of the US Congress distorted facts, discredited China’s development path and domestic and foreign policies, exaggerated the “China threat theory,” advocated strategic competition with China, and addressed economic and trade issues. Politicization is full of Cold War zero-sum thinking. If these bills are passed into law, they are bound to severely kidnap Sino-US relations, seriously interfere with the normal exchanges and cooperation between the two countries, and harm others to the detriment of themselves. China has always firmly opposed to this.
Zhao Lijian pointed out that the relevant members of the US Congress should correct their minds, treat China’s development and Sino-US relations rationally, stop deliberating and advancing negative China-related bills, delete China-related clauses, and stop interfering in China’s internal affairs, so as not to damage the overall situation of China-US relations and cooperation in important areas.
.
Related
