Senate Democrats Introduce China Competition Bill 2.0

Chuck Schumer

The Lede: Democrats in the Senate launched a bill aimed at countering China, which complements similar legislation signed into law last year.

What We Know:

The China Competition Bill 2.0 revolves around five key policy areas: (1) Limiting the flow of advanced technology to the Chinese Government. (2) Curtailing the flow of investment to the Chinese Government. (3) Securing domestic economic investment. (4) Underscoring our commitment to economic allies and maintaining partner alignment. (5) Safeguarding our allies' and partners' security and maintaining our strategic alliances.
The bill's unveiling by Democratic Majority Leader Senator Chuck Schumer comes just after U.S. Secretary of State Antony Blinken announced plans to reschedule his planned first visit to China and after U.S. Ambassador to China Nicholas Burns expressed the need to restore dialogue and communication between the two superpowers.

The Background: The Biden administration and U.S. lawmakers have become increasingly wary of China’s growing strength, a position which has gained strong bi-partisan support. Both the previous Democratic House Speaker Nancy Pelosi and the current Republican House Speaker Kevin McCarthy have met with Taiwanese President Tsai Ing-Wen. The CHIPS and Science Act passed last year included some aspects of the growing consensus in Washington on competition with China in semiconductors and other technology. Blinken's trip was supposed to take place in February but was postponed due to the presence of a Chinese high-altitude balloon over American air space.

Likely Outcomes:

While this new bill may seem to contradict Blinken and Burns’ willingness to talk to Beijing, the differing directions better define the nuance of the evolving U.S. position toward China. This new bill appears to focus on economic matters while the State Department’s new desire to open up dialogue focuses on the political and diplomatic sphere. Economically, the U.S. remains locked in a tense competition and this bill reflects the continuation of that pressure for the foreseeable future.
China may agree to open channels of communication and work with the U.S. to reduce tensions in the Indo-Pacific which could then translate to improving economic ties. However, the economic, trade, and business side of the U.S.-China relationship shows no sign of changing course barring a major new development that fundamentally alters the global markets. The clash over semiconductors will continue to be an area of fierce rivalry as an economic issue as well as a security concern for both countries.

Quotables:

“The Chinese government is not constraining itself in its pursuit to dominate the 21st century. And if we in America would rest on our laurels, if we let the CCP [Chinese Communist Party] beat us, it would have serious consequences for the world’s democratic nation... Bottom line: time is not on our side. The Xi regime is working every day to catch up and surpass the United States. There is no reason our two parties here in the Congress and the Senate can’t come together and send a strong message to the Chinese government that we’re united in this pressing national security effort and we’re committed to maintaining America’s lead in the future.” – Chuck Schumer, Democratic Senator from New York

“If the United States is to effectively compete with China on the world stage, we not only need to strengthen support for our diplomats as they work to safeguard our interests and values, but must also bolster our ability to cooperate with international allies and partners to effectively counter China’s investment and economic influence worldwide.” – Robert Menendez, Democratic Senator from New Jersey

“U.S. competition with the Xi regime is one of the most pressing issues facing our economy and national security today. Congress must continue to respond to the threats posed by the PRC’s increasing aggression and malign influence around the globe.” – Jeanne Shaheen, Democratic Senator from New Hampshire

Good Reads:

Senate Democrats unveil China competition push 2.0 (The Hill)

US Senate launches latest legislative effort to take on China (Al Jazeera)