A bipartisan effort in the Senate has produced two pieces of legislation to increase government investment in American technology and industry to counter economic and strategic challenges from China.
“I believe that China today, led by the Communist Party and propelled by Xi Jinping’s hyper-nationalism, is unlike any challenge we have ever faced as a nation,” said Sen. Robert Menendez, D-New Jersey, during the Senate Foreign Relations Committee hearing on the Strategic Competition Act of 2021. He is chairman of the panel and one of the bill’s primary sponsors.
The legislation, crafted in negotiations with Sen. James Risch of Idaho, the committee’s ranking Republican, was passed on April 21 and sent to the full Senate for consideration.
The measure addresses a series of economic and political priorities to ensure the security and competitive position of the United States in the face China’s aggressive bid to become a greater influence in global politics and trade.
“The bill will help us reinforce and rebuild our alliances and partnerships, restore American leadership of international and regional organizations, and respond to China’s predatory economic practices,” Menendez said. “(It) will reinvest in replenishing the sources of our economic strength and innovation, and ground our approach to China in our values and highest aspirations as a nation.”
If passed, the legislation would establish a Technology Partnership Office within the State Department. The office would perform oversight to ensure that critical U.S. technologies were not dependent on supplies from China.
Among other measures, the bill would target the nation’s multilateral supply chain by establishing a program to help American companies move their facilities out of China and find non-Chinese alternatives for sourcing and production.
“The challenge we are facing from China deserves no less than what we are undertaking here,” Risch said. “I can’t overstate the significance of the bill. It has the potential to be an important step toward ensuring the U.S. is postured to compete with China for decades to come.”
He said that the Chinese influence on America’s college and university system has become dangerous and needs to be considered. Therefore, the legislation includes a provision for the Committee on Foreign Investment in the United States (CFIUS) to expand the review process of certain foreign gifts over $1 million to American universities for research, production and development of critical technologies.
“We don’t allow our politicians to take money from China. Because we don’t want them influenced with the kinds of things that China is peddling.” Risch said. “There is no reason why these important institutions, which are debating and that are producing the future leaders of this country, should have that kind of influence if indeed it is put there for malign purposes.”
Risch said he expected pushback from colleges and universities, but he said it is not suitable to be taking money from the Chinese Communist Party.
The Strategic Competition Act also carries several provisions to address human rights abuses in China.
Sen. Ben Cardin, D-Maryland, praised the legislation’s “strong commitment to human rights.”
Cardin secured several amendments to the legislation regarding corruption within the Chinese regime, the plight of the Uighurs and the Hong Kong human rights activists.
“It is extremely urgent that we make it clear that Congress maintains its support for the global Magnitsky sanctions, which have been so widely accepted globally as a very important tool against the Russian Federation and other governments that have abused the rights of their citizens,” Cardin said.
The Global Magnitsky Act sunsets in December 2022, meaning no new sanctions could be imposed after that date if the act is not reauthorized. Cardin’s amendment to the legislation would remove the sunset clause and was included in the approved bill.
Separate from the Strategic Competition Act of 2021 is a measure called the Endless Frontier Act, which was reintroduced by Sen. Todd Young, R-Indiana, and Senate Majority Leader Chuck Schumer, D-New York.
If passed, the legislation would authorize $100 billion through the National Science Foundation to pursue commercialization, innovation, and research for technologies related to national security and the relationship between the United States and China.
Another $10 billion would be authorized for the Department of Commerce to designate regional technology hubs.
The legislation would “ensure new research investments translate into American industries and manufacturing and high-tech jobs in regions across the country to become global centers of emerging technology,” Young said in a statement.
Schumer said the Endless Frontier Act is the key to preserving America’s position as a current and future technological leader by boosting innovation and strengthening its research and development capabilities..
“In the coming weeks, the Senate will turn to this legislation and other pieces of bipartisan China-related legislation to ensure that the U.S. government’s hand at home and abroad is as strong as possible as we compete with China on all fronts,” he said.
Several industry leaders have voiced their support for the Schumer-Young bill.
Bobby Franklin, president and CEO of the National Venture Capital Association, wrote to Young and Schumer: “If effectively implemented, this legislation will meaningfully increase federal basic research investment and technology commercialization activity, improve our nation’s long-term economic competitiveness, create new industries and high-quality 21st-century jobs, and increase economic growth in communities across the country.”
Young said the Chinese Communist Party is pushing a view of a divided United States to the world.
“This is a rare opportunity to show the authoritarians in Beijing, and the rest of the world, that when it comes to our national security, and most importantly our China policy, we are united,” he said.