U.S. House backs sweeping China competition bill

Chinese and U.S. flags flutter outside a company building in Shanghai, China November 16, 2021. REUTERS/Aly Song

WASHINGTON – The U.S. House of Representatives on Friday narrowly passed a multibillion-dollar bill aimed at increasing American competitiveness with China and boosting U.S. semiconductor manufacturing, despite Republican opposition.

The Democratic-majority House backed the “America COMPETES Act of 2022” by 222-210, almost entirely along party lines. One Republican joined Democrats in voting for the measure and one Democrat voted no.

Passage set up negotiations with the Senate on a compromise version of the legislation, which must pass both chambers before it can be sent to the White House for President Joe Biden’s signature. The talks could take weeks or months.

The vote took place the same day as the opening ceremony for the Beijing Winter Olympics, amid criticism in Congress of the International Olympic Committee for awarding the Games to China. Human rights groups have long criticized China’s rights record, allegations China denies.

The House bill includes $52 billion to subsidize semiconductor manufacturing and research of the key components used in autos and computers. It also has $45 billion over six years to ease supply chain problems that have exacerbated shortages.

It includes changes to U.S. trade rules intended to offset China’s market-distorting trade practices, including by strengthening anti-dumping rules.

The bill would authorize $8 billion in U.S. contributions to the Green Climate Fund, established by the Paris Agreement to combat climate change, to help developing countries cope.

‘MAKE AMERICA … SELF-SUFFICIENT’

House Speaker Nancy Pelosi told reporters before the vote that she intended to begin negotiations with the Senate quickly.

“It is about making America… self-sufficient when it comes to the supply chain, so that we’re not depending on other countries,” she said.

House Republicans complain that Democrats did not include them in drafting the legislation. They harshly criticized the climate provisions and said they could be used to help Beijing, and accused Democrats of using the China measure to advance parts of Biden’s economic agenda that could not pass the Senate.

House Democrats said Republicans had refused to engage with them while they wrote the legislation.

“It’s incredibly disappointing,” Representative Suzan DelBene, who leads the New Democrat Coalition, a grouping of moderate Democrats, told a news conference where Democrats argued that the bill would create jobs across the country.

Democrats note that their bill includes all or part of more than 60 smaller bills that Republicans had co-sponsored.

The Senate passed its own bill – the U.S. Innovation and Competition Act – by 68-32 in June. Eighteen Republicans joined every Senate Democrat in voting yes. That legislation includes $52 billion to increase domestic semiconductor production and authorizes $190 billion for U.S. technology and research to compete with China.

The House bill authorizes $45 billion to strengthen supply chains and manufacturing of critical goods for health, communications and other sectors.