US poised for splurge in high-tech rivalry

The US Senate has passed legislation aimed at bolstering the country's ability to compete with other nations in a range of technology spheres, with a focus on maintaining an edge over China.

The America Competes Act of 2022 was passed by a vote of 68-28 on Monday. The legislation will have to be reconciled with a version passed by the House of Representatives in February.

The House and Senate will go to a conference committee to sort out the differences between the two versions and negotiate a compromise bill before sending it to President Joe Biden for approval. The White House on Monday called on the House to "move quickly" to start the formal conference process.

On Feb 4, the House passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022 by a vote of 222-210. It's the House's response to a similar bill called the US Innovation and Competition Act, or USICA, that the Senate passed in June 2021.

The USICA would invest approximately $250 billion over the next five years in technology and research to boost competitiveness against China.

The House's Competes Act has several provisions, including $52 billion to make semiconductors, $45 billion to improve supply chains for critical items and $160 billion for scientific research and innovation.

Though the House and Senate bills differ, there is agreement around semiconductor funding. Both bills seek to bolster US industry by directly providing $52 billion for domestic semiconductor research and development as well as manufacturing.

"Years ago, there was no question we're No 1. And then people followed our lead," House Speaker Nancy Pelosi said last month in support of the American Competes Act.

During Monday's debate in the Senate, Senate Majority Leader Chuck Schumer said the US "could not afford to come in second place" when it came to technologies such as semiconductors, biotechnology and other high-tech industries.

George Koo, a retired international business adviser in Silicon Valley, told China Daily: "Washington seems to think that throwing money at the semiconductor industry will make up for lagging behind Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. It also takes talent and hands-on experience.

"It has been reported that 80 percent of the veterans working for TSMC would rather move to the Chinese mainland than relocate to Arizona and become targets for perpetrators of Asian hate crime," he said.

Biden is betting on semiconductor pioneer Intel, but the company hasn't built a new fab for years, and the technology has advanced so rapidly that tens of billions of dollars won't even buy one state-of-the-art fab, Koo said.

"And the United States doesn't seem to understand and recognize that this is the trend that the world is moving away from the hegemony of the United States and looking to develop a multipolar world," he said.

Both the House and Senate bills also call for tightening oversight of research collaborations with China on federally funded research. For example, both bills would prohibit scientists with federal grants from participating in Chinese talent-recruitment programs and require universities to provide more information about any foreign gifts they receive.

Though the America Competes Act focuses on competition with China, new polling from Data for Progress found that voters are best persuaded by the legislation's creation of new, good-paying jobs, not an emphasis on competition with China. A majority of voters say job creation is more convincing than competitiveness abroad, by a 32-point margin, according to the survey.

Analysts said it will be a complex task for the two chambers to negotiate a compromise bill acceptable to enough lawmakers.

Despite the agreement on semiconductor investment to outpace China, the two bills differ on a wide range of issues, such as allocating the new research funds, reshaping immigration rules to attract foreign tech talent and combating climate change.