With the $1.9 trillion American Rescue Plan Act signed into law, the Biden administration’s attention has turned to a massive jobs, infrastructure, and clean energy plan. Meanwhile, some members of Congress want to advance bills on topics such as immigration, voting rights, and gun control.
But that’s not all. On March 10, The Washington Post reported that momentum is building for another priority: a bill aimed at “countering China’s economic influence” with an array of investments to restore U.S. technology leadership, rebuild its supply chains, and improve industrial competitiveness. Although coming at a moment of spiking outcries regarding the treatment of Asian Americans at home, the new legislative discussion—and this commentary—speaks solely to the debate regarding China’s rising economic and geopolitical sway.
On first glance, a China-response bill—with its focus on international geopolitics and a faraway superpower—might seem like a shift away from President Joe Biden’s professed urgency about helping working families here in America. However, the emerging bill is emphatically not a shift of focus. Rather, it represents a serious effort to renew America’s economy by investing in the nation’s high-value, good-paying industrial economy, and to provide better livelihoods in more communities around the country.
China, after all, lies at the center of the U.S. advanced-industry competitiveness challenge, which has influenced so much of the nation’s pre-pandemic economic drift and division.
Between 1990 and 2007, surging Chinese import competition played a large role in “hollowing out” the U.S. economy both nationally and locally, as low-cost imports undercut American producers and drove massive declines in decent-paying U.S. manufacturing jobs, especially in the heartland.
Since then, the initial China “shock” has evolved into an ongoing crisis exacerbated by a broader ebbing of U.S. advanced-industry competitiveness. China, for its part, has positioned itself as America’s main economic rival through an array of tactics, including unfair and illegal trade practices, intellectual property theft, manipulative terms of market access, and lavish subsidies for Chinese enterprises.
At the same time, U.S. industrial slippage has been exacerbated by broader U.S. disinvestment, offshoring, and decline. Federal R&D expenditures—necessary for technology leadership—have slumped to levels lower as a share of the gross domestic product (GDP) than prior to the Soviet Union’s launch of the Sputnik satellite in 1957.