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The U.S. House of Representatives passed on Friday a multi-billion-dollar bill aimed at increasing American competitiveness with China and boosting U.S. semiconductor manufacturing. The America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (America COMPETES) Act of 2022 seeks to bolster U.S. manufacturing and R&D, and reduce dependence on China for semiconductors.
The bill authorizes about $300 billion for research and development, including $52 billion to subsidize semiconductor manufacturing and research into the key components used in autos and computers. It also earmarks $45 billion over six years to ease supply-chain problems that have exacerbated shortages. The bill’s passage by the House 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, Reuters reported on Saturday. The talks could take weeks or months, although Biden urged quick action in a statement praising what he called “vital” legislation, according to Reuters.
The U.S. bill will not sway China’s industrial policies and innovation, but it could provide impetus to Chinese companies to make more efforts in R&D, John Gong, a professor of economics at the University of International Business and Economics in Beijing, told CGTN. He added that the bill will boost heavy investment in building semiconductor factories and solar power panels, making the act a state aid, which is what the U.S. has been criticizing China for. Gong expected the act to increase borrowing at a time when the U.S. national debt has surpassed $30 trillion (With input from Reuters)