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US tech bill slammed by China as 'paranoid'

June 9, 2021

Beijing has accused Washington of promoting protectionism following Senate approval of a bill aimed at boosting US research and development in key technologies to compete with China.

a picture of a computer chip
The US has announced a new bill to boost innovation and development for semiconductorsImage: Fotolia/Edelweiss

The Chinese Foreign Ministry on Wednesday responded to a massive industrial policy bill approved by the United States Senate aimed at boosting competitiveness with Chinese technology. 

On Tuesday, the US Senate overwhelmingly approved the United States Innovation and Competition Act, which aims to boost US semiconductor production,  artificial intelligence development, and other technology.

Wang Wenbin, a Chinese Foreign Ministry spokesman, said Wednesday the US should not treat China as an "imaginary enemy."

China's National People's Congress foreign affairs committee said in a statement that the bill "smears China's development"  and "interferes in China's internal affairs under the banner of innovation and competition."

"The bill shows that the paranoid delusion of egoism has distorted the original intention of innovation and competition," the committee said, according to a report by the official Xinhua news agency.

"We are in a competition to win the 21st century, and the starting gun has gone off," US President Joe Biden said Tuesday after the bill was passed. 

What does the new US tech bill entail? 

The centerpiece of the bill is a $50 billion (€41 billion) emergency allotment to the Commerce Department to support semiconductor development and manufacturing.

The funds will be handed out through research and incentive programs previously authorized by Congress.

The bill's overall cost would increase spending by about $250 billion, with most of the spending occurring in the first five years.

It comes as the US share of global semiconductor manufacturing globally has steadily eroded, from 37% in 1990 to about 12% currently, and as a chip shortage has exposed vulnerabilities in the US supply chain.

Who is backing the bill?

The bill enjoys bipartisan support, with supporters viewing it as crucial for the US to avoid being beaten by global competitors — most notably China — in the race for technological innovation.

US Commerce Secretary Gina Raimondo said: "This funding isn't just about addressing the current semiconductor chip shortage, it is about long-term investments."

Senate Majority Leader Chuck Schumer called the measure "one of the most important things this chamber has done in a very long time, a statement of faith in America's ability to seize the opportunities of the 21st century."

Other lawmakers explicitly mentioned the US' main technological rival. Senate Minority Leader Mitch McConnell said that while he supported the bill, the "final passage of this legislation cannot be the Senate's final word on our competition with China."

The lead Republican on the Senate Commerce, Science and Transportation Committee, Roger Wick, said the legislation was "an opportunity to strike a blow on behalf of answering the unfair competition" that he termed as coming from "communist China."

However, a core group of Republican senators have reservations about the cost of the legislation. Rand Paul said the bill "will make our country weaker, not stronger."

What happens next?

The House of Representatives must now pass the bill for it to be sent to the White House for Biden's signature. However, it is unclear if the legislation will be amended before it is signed into law. 

kmm/wmr (AFP, Reuters, AP)