US Senate Passes Bill To Counter China Tech Threat

The US Senate has passed a bill designed to bolster US science and technology innovation, in order to better compete with China.

The sweeping US Innovation and Competition Act passed with passed 68-to-32, after enjoying bipartisan support in the Senate.

The passing of the bill was warmly welcomed by US President Joe Biden, who said the “legislation addresses key elements that were included in my American Jobs Plan, and I am encouraged by this bipartisan effort to advance those elements separately through this bill.”

American Jobs

“It is long past time that we invest in American workers and American innovation,” said President Biden. “Along with the American Jobs Plan, the US Innovation and Competition Act would make generational investments in research and development and advanced manufacturing to help us grow critical industries and win the jobs of the future.”

“It will empower us to discover, build, and enhance tomorrow’s most vital technologies – from artificial intelligence, to computer chips, to the lithium batteries used in smart devices and electric vehicles – right here in the United States,” said Biden. “By strengthening our innovation infrastructure, we can lay the foundation for the next generation of American jobs and American leadership in manufacturing and technology.”

And he made clear that United States still views China as a trade rival going forward.

It comes after US intelligence officials in April warned that China, the world’s second-largest economy, is an “unparalleled” security threat.

Indeed, the officials warned of Beijing’s increasing efforts to suppress its regional adversaries and expand its military might, while racing to achieve technological superiority across the globe.

“We are in a competition to win the 21st century, and the starting gun has gone off,” admitted Biden this week. “As other countries continue to invest in their own research and development, we cannot risk falling behind.”

“America must maintain its position as the most innovative and productive nation on Earth,” he concluded. “I look forward to working with the House of Representatives on this important bipartisan legislation, and I look forward to signing it into law as soon as possible.”

US innovation

So what exactly is the ‘US Innovation and Competition Act’, and what does it involve?

The US Innovation and Competition Act of 2021 (USICA) includes more than $200bn for US scientific and technological innovation over the next five years, as well as $52bn specifically to increase domestic production of semiconductors and telecommunications equipment in America.

The bill was originally called the Endless Frontier Act, but in May it was expanded and renamed the US Innovation and Competition Act by Senate Majority Leader Chuck Schumer.

Besides trying to ramp up US tech production and finance research and innovation, the legislation also seeks to counter China’s influence via diplomatic means, namely working with allies and increasing US involvement in international organisations.

This is in stark contrast to the approach taken by former US President Donald Trump, whose administration launched a trade war with China in 2018.

China tensions

Despite the arrival of US President Joe Biden, who has not noticeably softened the US approach to China, has meant relations between the two countries continues to be tense.

The US notably brought in wide-ranging sanctions against Chinese tech firms, including telecommunications giant Huawei.

America also pressured allies not to use Huawei’s 5G equipment and initiated the arrest in Canada of Huawei chief financial officer Meng Wanzhou in December 2018.

The bill must be approved by the House of Representatives before being returned to the White House for passage into law.