Senate Democrats plan to announce Wednesday that they’ll begin drafting a new comprehensive bill to enhance US economic competition with China and prepare a response in case of Chinese aggression against Taiwan.
(Bloomberg) — Senate Democrats plan to announce Wednesday that they’ll begin drafting a new comprehensive bill to enhance US economic competition with China and prepare a response in case of Chinese aggression against Taiwan.
Senate Majority Leader Chuck Schumer is set to unveil the initiative at a press conference along with committee chairmen at noon in Washington. The aim is to produce a bill that can be voted on in the coming months, according to a person familiar with the discussions.
The plan comes amid efforts by Washington and its allies to coordinate their responses to China’s rising global economic and strategic clout.
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The package will have five focus areas. The first is to limit China’s access to cutting-edge technology, which includes preventing Beijing’s development of advanced technologies and strengthening export control laws.
The second is to restrict investment flows to China. “This means codifying an outbound investment screen to block U.S. capital from going to Chinese companies,” according to an outline of the plan obtained by Bloomberg. President Joe Biden aims to sign an executive order limiting some investments in China, which the administration aims to rally support for during the Group of Seven summit in Japan later this month.
The third area is focused on new domestic investments in key technologies. Fourthly, the US would create an alternative foreign aid program to counter China’s “Belt and Road” Initiative in Asia.
Finally the package would aim to “deter China from initiating a conflict with Taiwan or other allies in the region.”
It’s unclear how the new bill would fare in the Republican-controlled House. The Democratic-controlled House last year approved $52 billion measure of grants and incentives to domestic semiconductor manufacturing in the US as part of a China competition bill. Republicans, led by now-speaker Kevin McCarthy voted against the bill, deriding it as “corporate welfare.”
The national security part of the initiative may have a better chance of clearing Congress. McCarthy is in favor of stronger ties with Taiwan and hosted Taiwanese President Tsai Ing-wen in early April.
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