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Senate counters China with bipartisan manufacturing bill

Employee working on a silicon wafer production line at the Galaxy Core Inc. factory in Jiashan County, Jiaxing City, China 5 ZZ, May 25, 2021.

Guo Jun Feng | Visual China Group | Getty Images

The Senate will pass the largest input-output bill in US history this week to counter competition from China.

The bill will easily clear the Senate with Republican and Democratic support, including tens of billions of dollars for scientific research, subsidies to chip and robot makers, and overhaul of the National Science Foundation. I am.

The scope of the bill, which is the final result of a few weeks of discussions with at least six Senate committees, reflects many fronts of the US-China conflict and is super-legal to counter Beijing’s economic and military expansion. You can get a glimpse of the party.

This proposal, which is subject to change in the end, looks like this:

  • Donating $ 52 billion to support domestic semiconductor manufacturing
  • Approved $ 81 billion to the National Science Foundation for Fiscal Year 2022 and Fiscal Year 2026
  • Approves $ 16.9 billion to the Ministry of Energy over the same period for R & D and energy supply chains in key technology areas.
  • Ban on US diplomats from the 2022 Beijing Winter Olympics

Some commentators 2021 Innovation and Competition Law As a modern parallel to the Cold War between the United States and the Soviet Union. Proponents say the United States could be strategically disadvantaged in the coming years without expanding the country’s semiconductor production and rerouting the rare earth supply chain.

The final bill is expected to cost about $ 200 billion.

Bipartisan electric shock

Senate majority leader Chuck Schumer, New York Democrat, and one of the bill’s best cheerleaders, has worked for weeks to put together many components of the bill. The final bill will contain well over 1,400 pages of text.

“The bipartisan bill is the biggest investment in scientific research and innovation for generations and will lead the United States to the world’s leading path in the industry of the future,” Schumer said on the Senate floor on Monday. Stated.

The bill is the product of six committees and includes dozens of Republican amendments, he said, adding that the House of Representatives will consider some final amendments on Tuesday before passing the bill. ..

“This is one of the most important things we’ve done for a very long time, and it’s the biggest investment in scientific research and innovation over generations and decades,” Schumer said. I am.

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Senate Republicans are mostly sticking to the hard-line Chinese approach of the Trump era, even if it means higher prices and more federal involvement.

The largest part of this bill is the proposal, formerly known as the “Endless Frontier Act.”

Then it is a revision plan, Courtesy of Schumer and Senator Todd Young, R-Ind. Will allocate $ 81 billion to the NSF between fiscal years 2022 and 2026 to bring the National Science Foundation to life and establish the Department of Innovation.

“Today, our leadership is challenged by Beijing’s state capitalist regime, which threatens to win the next century by controlling the key technologies that will shape the next century,” Young said. , Written in a May editorial published by the Ripon Forum. Republican Opinion Journal.

“It’s time for the United States to launch an attack by passing a bipartisan endless frontier law, which invests in the discovery, creation and manufacturing of technologies essential to national security and economic competitiveness. The increase will solidify US leadership in science and technology innovation, “he added.

Even the conservative Sen. John Cornyn, R-Texas expressed support for the bill. His bipartisan CHIPS for America Act has since been incorporated into a broader bill, with approximately $ 50 billion allocated to boost US semiconductor manufacturing.

Dewardrick McNeill, a Pentagon policy analyst during the Obama administration, told CNBC, “In reality, the Senate has a very comprehensive bill, despite the process’s back-and-forth and political raids. I summarized it. “

“Some of the biggest questions many Chinese experts have had about this law are’running faster than China’by gaining a technological advantage and investing more in ways to beat China.” The question was whether to focus on or more on blocking Chinese law. By taking legal and regulatory measures, we will counter China if it goes too far. ” Stated. “It’s as if the Senate is trying to do both things little by little.”

The bill will fund a grant program managed by the Department of Commerce. To the extent unspecified, this grant program provides state and local government-provided financial incentives to chip makers who improve their factories or build new ones.

Schumer and colleagues hope that such a program will allow domestic and foreign semiconductor manufacturers to open new state-of-the-art foundries in the United States. The most advanced foundries in the world are exclusively operated by Samsung in South Korea and Taiwan Semiconductor Manufacturing Company in Taiwan. Taiwan.

The rare bicameral exhibit is even more striking given the long list of policy items that the Democratic Party of Parliament, which makes up the majority of both houses, could not move forward.

With sense. Joe Manchin, DW.Va., And Kyrsten Cinema, Arizona, opposed the abolition of filibuster, stalled progressive policy items from immigration reform to gun control.

Infrastructure has hardly improved. Hundreds of billions of dollars still separate Republicans and Democrats, many campaigning on the promise of passing a once-in-a-generation bill to repair national roads, bridges and waterways.

A new Cold War?

For all major parties involved, including Democrats, Republicans, and Chinese officials, the bill and its widespread support provide the clearest evidence that Washington’s deep skepticism about Beijing is not limited to the Trump administration. It means to provide.

The president, even in the past week Joe Biden It highlighted his administration’s deep distrust of the Chinese government.

White House on Friday Increase restrictions on US investment We have added more companies to the ever-growing US blacklist for certain Chinese companies allegedly involved in China’s military and surveillance activities.

On August 2, Americans will be banned from investing in 59 Chinese companies, including China’s Aero Engine, Aerosani, and Huawei Technologies.

Hours before the Senate is expected to pass a technical bill, the administration announced on Tuesday that it would take a dramatic look. Expanding US production of lithium batteries, Rare earth minerals and semiconductors.

Earlier this year, the White House announced that it would conduct a 100-day review of its domestic supply chain of critical materials and technologies. Authorities have been careful not to mention specific countries, but critics have reviewed and as a result. The recommendations obtained state that they are seen as an effort to ease US reliance on China’s exports.

Many US technologies considered important for future economic and military advantages, such as electric vehicles, smart cities, faster computers, and state-of-the-art weapons, are now manufactured by rare earth shipments from China. It has been.

According to the United States Geological Survey, it supplied 80% of the rare earths imported by the United States between 2016 and 2019.

More blatantly targeting Beijing is part of a bill drafted by the Senate Foreign Relations Committee known as the Strategic Competition Law.

Senator Robert Menendez (DN.J.) and Jim Riche (Idaho) to support the “Fund Against China’s Influence to Counter the Global Malicious Impact of the Chinese Communist Party.” , Wants $ 1.5 billion in five years.

Strategic competition law also bans U.S. officials from the 2022 Beijing Winter Olympics and demands the end of the Chinese Communist Party’s “continuing human rights abuses, including the Uighur genocide.” It does not prohibit you from participating in the game.

Speaker of the United States House Nancy Pelosi (Democrat-California) will hold a weekly press conference with Capitol Hill reporters in Washington, DC on May 20, 2021.

Ken Sedeno | Reuters

Debates over some amendments prevented the Senate from passing the bill before the Memorial Day recess, but bipartisan enthusiasm for maintaining U.S. competitiveness is expected to remain in the House of Representatives. .. Biden’s desk.

Biden, who demanded $ 50 billion to boost semiconductor production and research on Tuesday, is widely expected to sign the law and has expressed general support for strengthening U.S. chip manufacturing. Masu.

Speaker of the House Nancy Pelosi, D-Calif. Reiterated her support for the 2022 Olympic diplomatic boycott on Thursday.

“China has changed in past generations, but the horrifying human rights records of the Chinese government have not changed,” she said in a press release dated June 3. Democratic demonstrators at Tiananmen Square. “The US Congress has maintained and will continue its decades of bicameral and bicameral commitments to hold the Chinese government accountable,” he said.

McNeil said the bill’s wording was sharply pointed out, but the comparison with the US-Soviet Cold War was unwise and misleading.

“It’s not the Cold War at all, but given the high degree of economic integration and dependencies between the United States and China, it’s much more complex and complex,” he wrote. “Unlike the Soviet Union, China has no true diplomatic ally (North Korea and Pakistan have nothing to do with it), no military alliance, and no ideological block to strengthen diplomatic and security policies. The Soviet Union can be proud. Everything “

“It still has to go to the House of Representatives, and there is no real way to know what the process (always annoying) will be and what the end result will be,” he added.

Senate counters China with bipartisan manufacturing bill

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