Getting lost on China: Congress offers cheap talks

China is the biggest global challenge for the United States. Covered it. Congress is only part of this problem and, to their credit, many members of the two parts want meaningful responses to China’s predatory economic behavior, repression of human rights, and international aggression. But the process has produced long bills that are largely political statements, with only a few useful elements. They should be discarded, in favor of much shorter documents with a small number of powerful actions.

Already adopted by the Senate, the United States Innovation and Competition Act (USICA) started out as a welcome boost in research funding. The barriers to Chinese acquisition of this research have been suggested, and rightly so. But the final version of the bill is a 2,376-page monster, 2,000 pages of which could disappear without losing anything but the amount of empty rhetoric.

One component of the USICA is an initially separate bill called the Strategic Competition Act. At least four-fifths of its 435 pages could also disappear without impact. The fluff-to-content ratio is worse in the home equivalent, known as (470 pages) Eagle Act. Setting priorities and taking costly action on China is difficult, if not a little scary. It’s a lot less stressful to announce congressional sentiment on dozens of issues, hiding the fact that Congress is not doing anything about them.

There are two costs to taking the easy route here: 1) not doing nearly enough now and 2) probably not doing enough later. On this last point, pro-Chinese industries such as finance see these bills, if adopted, as an opportunity to declare the fight against China won thanks to American harshness. The real result would be the opposite. A year from now, it will be more difficult to pass a law because of the midterm elections. And if the midterms result in split control of Congress, it may be more difficult to act in 2023.

This would open the door to more years when China would harm American interests. Despite concerns about loss of jobs, loss of technology, crackdown in Xinjiang, future aggression in Taiwan, violations of US law, etc., US investments in China are almost certainly exceeds $ 1 trillion and go up. An almost is necessary because the Treasury Department claims the small Cayman Islands are the main recipient of US funds, hiding the true amount going to China. The first step in resolving an addiction is to admit it.

There are members of Congress, always the two parts, who want to prevent US investors from supporting the program of Communist Party Secretary General Xi Jinping. But none of the giant bills proposed in the Senate or House take action thousands of pages to improve U.S. competitiveness against China, and none consider the U.S. funding Chinese competitiveness.

Like investment, technological progress can span economics, security and politics. At USICA, the Senate recognizes this and tries to both advance American technology and protect it from China. But no sanctions are imposed on Americans ignoring the protections, let alone Chinese recipients of illegally acquired research. And the house research invoices have almost no protection. Beijing will steal American technological progress, then subsidize its companies to drive American businesses out of business. Still.

Supply chains are a third element of Sino-US competition crossing the stake lines. The COVID-19 pandemic has provided an overwhelming incentive to limit Chinese participation. USICA is funding new semiconductor factories here, but allowing China into the factories supply chain. A supply chain provision copies the Biden and Asset administrations to do nothing important and new American jobs could be held hostage by Beijing. The Eagle Act offers $ 15 million to help companies exit China, when $ 15 billion would be a start.

Chinas are definitely on the rise can be stopped, but the United States is not doing our part. There are several good ideas available who have lost their posture so far. China must be gradually, but completely, excluded from supply chains that Congress deems essential. Strong penalties must be enshrined in law and enforced for the theft of US research and trade secrets. US investments should not be allowed to support criminal entities or those that help undermine our interests and values.

These and other steps only require a few invoices, just a few pages. And they don’t all have to be adopted and implemented immediately. What is needed immediately is the will to act that changes the China-US relationship. Otherwise, talk about all the same ugly problems in 2024.

Derek M. Scissors is Principal Investigator at American Institute of Business, where he focuses on economic relations in Asia. He is chief economist of the China Beige Book and author of China Investment Global Tracker.