In a bid to strengthen American competitiveness against China in the technology and manufacturing sectors, the U.S. Senate passed the United States Innovation and Competition Act (USICA) this week, formerly known as the Endless Frontiers Act. The bill, which passed 68-32 with bipartisan support, and next moves to the U.S. House , where it may face further revisions,commits $190 billion to enhance American technology and research, and $52 billion towards developing U.S.-made semiconductors.
There is bipartisan concern over some measures of the bill, however, and some House members are skeptical of its practicality, while others are concerned that some measures may function as financial giveaways to recipient companies. "I understand the urgency of capitalizing on the bipartisan momentum," Science Committee Chair Eddie Bernice Johnson said. "But these are big ideas, and we must be smart in laying a solid foundation for our country's science and innovation future." In response to the bill's announcement China said the bill demonstrated a "paranoid delusion of wanting to be the only winner."
Technology isn't the only area where competition is mounting. Defense Secretary Lloyd Austin issued a directive to the Pentagon this Wednesday, calling for an evolution of the U.S.'s military strategy towards China. The directive, which remains classified, centers around U.S. alliances, military technology, intelligence gathering, and deterrence. In response, Foreign Ministry spokesperson Wang Wenbin called on the U.S. to "abandon the obsolete Cold War and zero-sum mentality, and look at China's development and China-US relations in a rational light."
While the U.S. takes aim at China, China is ready to retaliate against Western pressure. After an expedited process, China passed a law that counters foreign sanctions placed by the U.S. and EU earlier this year. China intends for the law to add legitimacy and predictability to its response to sanctions, as Beijing seeks to mitigate their impact. Read more on the impact of sanctions from Brian Wong, Rhodes Scholar at Balliol College, Oxford, on China-US Focus.
Prepared by China-US Focus editorial teams in Hong Kong and New York, this weekly newsletter offers you snap shots of latest trends and developments emerging from China every week, while adding a dose of historical perspective.