China rejects US Senates $250 Billion Move To Boost Tech and Manufacturing

June 28 05:33 2021 Print This Article

China is set to continue responding harshly to perceived attacks on its reputation and integrity as a result of the recently passed U.S. Innovation and Competition Act. According to recent reports, China does not intend to take any orders or interferences on its handling of Hong Kong, Xinjiang, and Taiwan.

Foreign Ministry spokesperson Wang Wenbin has called the new U.S. bill “full of Cold War zero-sum thinking” and one that smears China’s path to development and foreign policies by distorting key facts. He said while the U.S. can choose what to do to promote its industries and economy, China would oppose any attempts by the U.S. to treat it as an imaginary enemy.

China has given a myriad of reasons why it rejected the U.S.’s Innovation and Competition Act which seeks to use $250 billion to boost its tech competition with China. Most of the reasons for rejection revolve around China’s reputation and not the amount being pumped into the research.

A day after the bill was passed by the U.S. senate, China responded by issuing critique statements through the Foreign Affairs Committee and National People’s Congress. The statement directly expressed a “strong dissatisfaction and resolute opposition” to the bill.

Interfering in China’s domestic politics and policies

Part of the major reason for opposing the bill is that China sees it as a tool to popularize its ideology that China is a global threat to maintaining America’s global dominance. The statement from the Foreign Affairs Committee and National People’s Congress directly referred to the bill as using religious and human rights excuses to interfere in China’s domestic politics. The statement said the bill would limit China’s legitimate development rights.

Of greatest concern is with Division C, a section added later to the original Endless Frontier Act on which the Strategic Competition Act is based. According to Chinese sources, this particular section dwells so much on human violations against China and online propaganda instead of what the bill seeks to accomplish – pumping more money into the U.S. tech industry.

The added section proposes an expenditure of $300 million yearly by the U.S. on “Countering Chinese Influence Fund. The amount is to be used in exposing propaganda by the Chinese government. It will also be spent on popularizing negative impacts of the Belt and Road. This is among the few things on which the funds will be spent.

Aside from that, a lot of politics relating to the bill revolves around the notion that the U.S. funds and leads all online messages that are anti-Chinese. In fact, one headline by the state-owned China Daily read “Give me $300 million, and I will slander China.”

On the outset, the bill seeks to counter China’s moves in promoting its technology. China, for instance, has invested a lot to promote and incentivize different key industries. Examples include Made in China 2025, Big Fund focused on promoting semiconductors, and others.

The statement from the Foreign Affairs Committee and National People’s Congress said China would not swallow the bitter pill that limits its “sovereignty, security or development interest.”

The statement referred to the bill’s claim on China’s actions in Taiwan, Hong Kong, and Xianjiang. China claims Taiwan is its territory. The statement responded to claims raised in the bill that China was imposing human rights violations in Hong Kong and Xianjiang where mass detentions against minority Muslim groups have been witnessed.

According to the statement, these are “purely China’s internal affairs” adding that China would not tolerate any foreign interference.

Ditching small-government approach

Some Chinese commentators are concerned about whether the U.S. is ditching its small-government tradition and adopting a “whole nation” strategy.

A researcher from Beijing-based Renmin University, Deng Jinting has raised a concern with the requirement by the bill that the Department of State should provide a published list of all Chinese subsidies to the American domestic companies. According to him, this may be used as a tool to sanction those receiving the subsidies.

Another concern is the effect the bill will have – that it will force Chinese-American scientists to take sides since funding will come from only one country and not both.

Director of the Institute of International Studies at Tsinghua University, Yan Xuetong, posted a comment on social media wondering why the U.S. seems to now ditch the strategy it once used. party-owned tabloid Global Times has also called the strategy a move similar to a sick person looking for any doctor they can find.

The first criticism of the bill is based on the fact that the $100 billion scientific research investment is quite small. Based on an article posted by a China’s state broadcaster, the amount is only 0.5% of America’s total annual GDP. The article author said that the “number is quite small” when divided into different research fields for which the amount must cater.

According to the article, the law is useless to give that the investment in applied science is too little and will cause a further decline in manufacturing industry. China believes that its “whole nation system” of allocating resources helps to concentrate the resources effectively to dedicated fields. Officials say this strategy works for the country.

According to them, the strategy has helped the country to invest adequately in cutting-edge fields in research, education, and sports sectors.

However, outside of China, the “whole country” system is viewed as authoritarian and interventionist.

An unnecessary intervention

The Innovation and Competition Act is being opposed by among others U.S. Senator Pat Toomey (R-Pa.). He issued a statement warning that the bill assumes that the country’s competitiveness depends on government-directed spending in research and industrial policy.

The senator raised a flag over this matter saying these allocations will only be made based on political and parochial considerations and not intellectual merits. He said the tech industry and market economy in America cannot thrive by imitating Chinese central planning but by “relying on natural innovative entrepreneurship” of its market. This is in addition to punishing bad behavior by China.

However, he supported investing in cracking down on China-related cyber-attacks and theft of intellectual property.

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Alan Davison
Alan Davison

Alan Davison, internet researcher, full-time writer for 15 years. Writer and publisher of or Follow me on Twitter.

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