|
New
regulations or reviews of investments or deals in China could
disrupt U.S. businesses' future operations in that country,
which include semiconductors and medical equipment. The
bilateral trade deficit has run more than $100 billion a year
since 2002.
Senators from both sides of the aisle want "guardrails," such as
mandatory security disclosures and interagency reviews to stop
U.S. businesses from compromising national security by
outsourcing critical technologies to China.
The Senate bill authorizes $120 billion for high-tech research
and another $54 billion to subsidize U.S. semiconductor
production. For chip factories, it makes no distinction between
foreign recipients and U.S.-based firms in determining who gets
funds for U.S. facilities.
A key goal of the funding is to bring the world's most advanced
chip plants to the United States, and only Taiwan Semiconductor
Manufacturing Co and Korea's Samsung Electronics Co Ltd have the
technology to do that.
Florida Republican Senator Marco Rubio has proposed an amendment
requiring U.S. national security officials to screen recipients
and require disclosure of funding or support from foreign
entities, including the Chinese government or Chinese
state-owned enterprises.
TSMC and Samsung both have operations in China.
Another amendment from Democratic Senator Bob Casey and
Republican Senator John Cornyn would require an interagency
review of any U.S. investments in China or a shortlist of
adversarial countries. That would mark a huge change for U.S.
law, which for decades has had provisions for screening inbound
investments, but not for outbound.
"If a company wants to offshore semiconductors to China, we need
to know about it," Casey said from the Senate floor on
Wednesday. "Yet, business interests, like the U.S. Chamber of
Commerce and the U.S.-China Business Council, are organizing
against this commonsense proposal."
Casey took to task Republicans opposing the measure, saying they
talk tough on China, but they "cut and run" when it comes to
taking on big business.
John Murphy, the U.S. Chamber's senior vice president for
international policy, said existing laws, such as the Export
Control Reform Act of 2018 (ECRA), could address the China
investment issue, and that the proposal needed more discussion
in the Senate before being added to such a sweeping package.
"Congress and the administration should focus on using the legal
tools on which the paint is barely dry," he said, referring to
ECRA.
One Senate aide cited fierce opposition to the Casey-Cornyn
amendment from businesses and some Republicans, including
Senator Mike Crapo, the ranking member on the Senate Finance
Committee, adding: "We're not confident that it's going to come
to a vote."
Crapo declined to comment.
FUNDAMENTAL FLAW?
Senate Majority Leader Chuck Schumer has sought to get the U.S.
Innovation and Competition Act passed this week, but Republicans
insist the bill is not ready.
"There is an increasing consensus that the lack of guardrails is
the fundamental flaw of the bill," a Republican House aide said
of the Senate package.
The House of Representatives is planning its own version of a
China bill and could add other provisions on chips funding as
well.
Rubio's office said it was still working on getting his
amendment incorporated. When he proposed his amendment for
counterintelligence screening last week, he noted the much
needed investments would "mean nothing if they are stolen by
foreign adversaries, including the Chinese Communist Party."
Any restrictions on subsidies to foreign companies would likely
benefit Intel Corp, the long-time U.S. national champion in
chip-making that has promised to redouble its efforts in the
most advanced technologies and spend more than $20 billion on
new U.S. plants.
Intel last year moved to sell off its only chip factory in China
to SK Hynix.
Derek Scissors, of the conservative American Enterprise
Institute, who studies China and security issues, said companies
should be forced to make a choice.
"If you receive federal government money, you cannot expand your
business in China from that point. The end. And if you don't
like that, don't take the federal money," Scissors said.
(Reporting by Stephen Nellis, Michael Martina and David
Shepardson; Editing by Richard Chang)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
