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U.S. Senate passes sweeping bill to address China tech threat

[June 09, 2021] By David Shepardson

WASHINGTON (Reuters) -The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country's ability to compete with Chinese technology.

An indignant China responded to the vote by saying it objected to being cast as an "imaginary" U.S. enemy.

The desire for a hard line in dealings with China is one of the few bipartisan sentiments in the deeply divided U.S. Congress, which is narrowly controlled by President Joe Biden's fellow Democrats.

The measure authorizes about $190 billion for provisions to strengthen U.S. technology and research - and would separately approve spending $54 billion to increase U.S. production and research into semiconductors and telecommunications equipment, including $2 billion dedicated to chips used by automakers that have seen massive shortages and made significant production cuts.

China's parliament expressed "strong indignation and resolute opposition" to the bill. It said in a statement that the U.S. bill showed "paranoid delusion of wanting to be the only winner" and had distorted the original spirit of innovation and competition.

"We firmly object to the United States seeing China as an imaginary enemy," Chinese foreign ministry spokesman Wang Wenbin told reporters in Beijing.

The bill must pass the House of Representatives to be sent to the White House for Biden to sign into law. It is not clear what legislation in the House will look like or when it might take it up.

The bill has a number of other China-related provisions including prohibiting the social media app TikTok from being downloaded on government devices, and would block the purchase of drones manufactured and sold by companies backed by the Chinese government. It would also allow diplomats and Taiwanese military to display their flag and wear their uniforms while in the United States on official businesses.

It would also create broad new mandatory sanctions on Chinese entities engaged in U.S. cyberattacks or theft of U.S. intellectual property from U.S. firms, and provides for a review of export controls on items that could be used to support human rights abuses.

Senate Majority Leader Chuck Schumer, a co-sponsor of the measure, warned of the dire consequences of not funding research to keep up with China.

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U.S. Senate Majority Leader Chuck Schumer (D-NY) speaks to a reporter about the status of a deal on infrastructure legislation as he departs the Senate floor at the U.S. Capitol in Washington, U.S., June 8, 2021. REUTERS/Jonathan Ernst

"If we do nothing, our days as the dominant superpower may be ending. We don’t mean to let those days end on our watch. We don’t mean to see America become a middling nation in this century," Schumer said.

Biden praised the bill: "We are in a competition to win the 21st century, and the starting gun has gone off ... We cannot risk falling behind."

U.S. Commerce Secretary Gina Raimondo has said the funding could result in seven to 10 new U.S. semiconductor plants.

Many U.S. companies praised the bill. General Motors Co said the legislation "represents an important step to address the semiconductor shortage that continues to impact U.S. automotive manufacturing."

Some critics have likened the Senate funding effort to China's high-tech industrial development push, dubbed "Made in China 2025," which long irked the United States.

The bill also seeks to counter Beijing’s growing global influence through diplomacy, by working with allies and increasing U.S. involvement in international organizations after Republican former President Donald Trump's "America First" agenda.

Senator Maria Cantwell noted the bill would authorize NASA spending and its Artemis mission to the Moon.

"As China has made it clear, they're going to Mars, we are going back to the Moon to ready ourselves to go to Mars," Cantwell said.

(Reporting by David Shepardson; Additional reporting by Yew Lun Tian in Beijing; Editing by Peter Cooney and Robert Birsel)

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