What is the USA’s China Competitiveness Bill?

By Sakshi Chhabra


The US Senate has passed a massive legislative package that aims at improving the nation’s economic competition with China as well as for holding the Communist Government accountable for its predatory tactics.

This major Competitiveness Bill was passed by the US Senate with 68-32 votes and is considered as a major political victory by the Senate Majority Leader Chuck Schumer[1].

This Bill was overwhelmingly approved by the Senate in order to boost the US semiconductor production as well as development of the artificial intelligence and the other technologies in the view of growing international competition, specifically from China.

U.S. President Joe Biden has also shown his support for the Bill.

This article deals with the need and provisions of this Bill.

Announcement of the Bill

The US innovation and Competition Act is a widespread Bipartisan proposal from Chuck Schumer and Senator Todd Young. In February, Schumer asked both the Democratic committee and the Republicans to work on other measures that can be included in a larger package to bolster US technology, manufacturing and research in order to compete better with China.

The Bill was proposed after taking inputs from half a dozen committees and the Senate voted on dozens of Republicans, Democratic and Bipartisan amendments over the past several weeks.

The highlighting point here is the Bill has the backing of President Joe Biden, who’s administration has made the curbing of China’s influence through a coalition of allies.

What is the China Competitiveness Bill about?

This Bill nearly has an investment of a quarter trillion Dollars over the next five years for scientific research and development in order to bolster Competitiveness against China.

The US Innovation and Competition Act invest more than 1000 billion Dollars of the taxpayer funds for solidifying the United States leadership in scientific and technological innovation which is critical to national security and economic Competitiveness.

This Bill also strengthens the system of the essential supply chains and the ability of US to solve the supply chain problems during crisis. It increases the funding for the National Science Foundation Activities.

The US lawmakers also have approved proposals that seek to limit the economic aspirations of China and curb its political influence. The Competitiveness Bill opens the doors for some new sanctions that targets Beijing abouts its human rights practices and commissions a fresh new study about the origin of Coronavirus.

It also authorizes 300 billion Dollars to specifically counter the political influence of the Chinese Communist Party.

Features of the Bill

This Bill includes:

  • Investment in the semiconductor manufacturing.

This Bill provides over 50 billion Dollars in five years to subsidise the semiconductor manufacturing and addresses the global chip shortage that is creating problems for the supply change for commodities like cars smart phones and appliances.

  • Boosting research and development as well as the National Science Foundation.

This new legislation will create a new system of technology and innovation within the National Science Foundation that supports such research. Over 81 billion Dollars have been allocated to the National Science Foundation which establishes its focus on 10 areas that also includes artificial intelligence, robotics and biotechnology.

  • Creation of regional technology hubs.

This Bill provides 10 billion Dollars over five years to the Commerce Department in order to create regional technology hub programs. Also, such technology hubs will also be in rural areas.

  • Encouraging 5G Innovation.

The legislation provides 1.5 billion Dollars in order to spur innovation in the field of advanced wireless technologies and to also encourage 5G innovation.

  • Promoting American requirements.

This legislation requires all the material which is used for the infrastructure projects to be produced within United States itself. This would require the Government agencies to offer contracts which last for at least two years while buying personal protective equipment’s in order to encourage the companies to manufacture such supplies in the United States.

  • Countering China’s economic policy.

The business community of America has always been accusing China of unfair trade practices and property theft. Thus, this Bill directs the US secretary of state to produce a list of all state-owned enterprises in China that have used such tactics. this Bill also strengthens America’s partnership with other allies like Japan and Australia to stop the importation of goods made by China with the stolen intellectual property.

  • Supporting space exploration.

This Bill provides additional funding for NASA, specifically for it to carry out its human landing program that aims to transport Americans to the moon. the Bill also extends the authorization of the International Space Station through 2030 and direct NASA to come up with a plan in order to develop space suits for deep space exploration.

What is the need of the Bill?

The asymmetrical margin of support for the Competitiveness Bill was the result of the continues political shifts by the lawmakers jolted to action because of the pandemic. Due to the virus led lockdown, shortage of crucial goods highlighted the country’s dependence on China. Nineteen Republicans including Senator Mitch McConnell, republican of Kentucky as well as the Minority Leader voted in the favour of the Bill.

The policy makers have directed to increase the domestic production capacity in the country. This legislation was announced hours after the Biden administration had announced its new steps to strengthen the American supply chains. the core of this was a collaboration between Mr. Schumer and senator Todd Young.

This legislation will provide a lifeline to the industry during the global chip shortage that has shut the auto plants and rippled through the supply chain globally.

The Competitiveness Bill invests Billions into the scientific research and development programs in the United States and grants permits for agreements between the private companies and research universities in order to encourage new technology.

Some house Democrats also desire the parochial projects that were previously inserted in the Senate Bill to win broader support. while some of the points were added after extensive hearings several were also attached to the legislation without any debate such as the provision to double the annual budget of a Pentagon research agency.

The Bill had a lot of support, but concerns were also raised in the house buy some Senate Republicans who argued that the legislation was rushed and can be difficult as enough stance was not taken on China.

But still the overwhelming vote announced on Tuesday gave a clear picture of how commercial and military competition which China has become an important issue that can unite both political parties. As well as how deeply concerned the lawmakers are to overcome the legislative paralyses to meet the moment.

This Bill is also a sign of the widespread consensus that has emerged due to the need to outcompete China at a world stage, also by reviving the US manufacturing, research and development and cracking down China’s economic abuses[2].

Will the Bipartisan Legislation create a new cold war[3]?

Senate Majority Leader Schumer said that the bipartisan Bill will be one of the most important things US has done in a very long time and is also the largest investment in scientific research and technology in decades.

The White House also announced that restrictions will be expanded on the American investments insert in Chinese companies that allegedly has ties to the country’s military and surveillance efforts, which will add more firms to the blacklist of USA.

From 2nd August 2021, Americans will be prohibited from investing in 59 Chinese companies that include Aero Engine Corporation of China, Huawei technologies, etc.

The House Speaker Nancy Pelosi says that this legislation does not declare a Cold War at all but however it is something which is much more complex and complicated then the high level of economic dependency between USA and China.


The Senate believes that is Bill will lay down the foundation for another century of the American leadership. Also, this Bill could be the turning point for the American leadership in the 21st century. The Competitiveness Bill will be one of the most significant bipartisan achievements of the US Senate.

This Bill will help the US Government to stop the foreign governments from stealing the research and innovation of USA in order to use the American taxpayers-funded research to create jobs for the Americans in the country.


  1. US Senate passes Competitiveness Bill, available at: economictimes.indiatimes.com (Last visited on June 10th 2021)
  2. Consensus of the Bill, available at: .axios.com (Last visited on June 10th 2021)
  3. Bipartisan Legislation, available at: cnbc.com(Last visited on June 11th 2021)

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