The Senate passed rare bipartisan legislation on Tuesday aimed at countering China's growing influence by investing more than $200 billion in American technology, science and research on 8 June 2021. It is aimed to pour nearly a quarter-trillion dollars over the next five years into scientific research and development to bolster competitiveness against China. The bill would offer up more than $50 billion to boost U.S. semiconductor manufacturing as the world grapples with a shortage of microchips. It is very important to recognize that Republics and Democrats banded together to endorse what would be the most significant government intervention in industrial policy in decades. It includes federal investments in a slew of emerging technologies as well as the semiconductor industry.
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Overall, the intention of the Innovation and Competition Act is easy to understand. The Act intends to strengthen the interconnectivity between academic research, government grants, venture capital, and free market competition. The Innovation and Competition Act is betting that by preserving the integrity and ingenuity of the U.S. model of innovation, the United States can replicate this kind of success and compete with China’s statist military-civil fusion national strategy. This is consistent with widely-shared confidence that the United States can and will out-innovate China in the long run.
Even though, it has some challenges. First of all, it is paramount to secure the intellectual rights or simply put internet security. There are many companies either stealing or purchased the researches which are detriment of US national security. It is estimated that such economic espionage costs around $300 – $600 billion per year. Therefore, it is vital to take effective counter measures against these activities.
Also China backs all these developments. Whereas the Act pledges to pour a quarter-trillion dollar in coming five years, China pours trillions for innovation researches. It is a big difference in terms of resources.
It is clear that US intends to play this game in long run. It is not simply an Act but a part of a Grand Strategy to contain rising China.
