April 12, 2021 | Analysis: Strategic Competition Act of 2021
Can the US Congress legislate a framework for US-China strategic competition?
As the United States continues to form its China policy under the Biden administration, we’re noticing the emergence of several themes. Most prominent is the idea that the best way to counter China’s rise is for the US to invest in itself, rather than investing in suppressing China’s development.
We noticed increased calls for the US to invest more in itself to counter China as part of several private initiatives. Two stark examples of this, which I’ve written about in previous notes, are the China Strategy Group and the National Security Commission on Artificial Intelligence.
Now we see a push to convert the spirit of these private initiatives into formal US legislation with the proposed Strategic Competition Act of 2021. Today’s notes summarize and analyze key points of this bill and will help us understand how legislation such as this could become part of the backbone of America’s China policy in the years to come.
Today we’ll focus on Title I of the Strategic Competition Act, “Investing In A Competitive Future.”
Title I is broken down into four (4) sections:
Science and Technology
Global Infrastructure Development
Digital Technology and Connectivity
Countering Chinese Communist Party Influence
“The People’s Republic of China (PRC) is leveraging its political, diplomatic, economic, military, technological, and ideological power to become a strategic, near-peer, global competitor of the United States.”
Science and Technology
The United States, under the Biden administration, is prioritizing China as a major multi-dimensional competitor in the emerging technologies that will dominate the coming years and decades.
Ensuring US dominance in key sectors such as semi-conductors will require re-imagining the Federal government’s role with the US private sector. We’re beginning to see this play out with companies like Intel, which are beginning to integrate geopolitical strategy within their business strategies. With support from both the federal and state levels, intel plans to invest $20 billion in domestic manufacturing capacity.
Intel is also creating an entirely new business division, Intel Foundry Services, to compete directly with Taiwan-based TSMC in a highly competitive foundry business. This is an excellent example of a strategically critical US company fully integrating geopolitical strategy with business strategy. Intel’s pivot is a reflection of the United States’ new approach to China under Biden.
Global Infrastructure Development
This portion of the bill represents the United States’ strategy to counter the “Belt and Road Initiative,” China’s massive emerging market infrastructure investment initiative. The United States is most concerned about China translating massive investment in developing market infrastructure into geopolitical influence. The United States has already fallen behind China in infrastructure investment in the developing world.
“The President shall direct a comprehensive, multi-year, whole of government effort, in consultation with the private sector, to counter predatory lending and financing by the government of China, including support to companies incorporated in the PRC that engage in such activities…”
I’m skeptical the United States will follow through with a commitment to match China’s infrastructure spending in regions such as Africa specifically. The United States has lacked the political will and economic incentives to invest in the developing world for decades. It’s unclear whether China can be a strong enough impetus to get the ball rolling.
Digital Technology and Connectivity
Digital connectivity is a growing trend with a scope extending far beyond US-China relations. As technology competition between the United States and China intensifies in the coming years, there will also be immense competition for dominance of the global digital infrastructure, establishing governance models, and setting norms. The country that can obtain dominance in digital norm-setting will gain a decades-long geopolitical edge.
“It is the sense of Congress that the United States must lead in international standard-setting bodies that set the governance norms and rules for critical digitally-enabled technologies in order to ensure that these technologies operate with a free, secure, interoperable, and stable digital domain.”
Countering Chinese Communist Party Influence
One of the more controversial parts of the bill is the subtitle on countering Chinese Communist party influence, also known as the “Countering Chinese Communist Party Malign Influence Act.”
This portion of the bill proposes the appropriation of “$300,000,000 for each of fiscal years 2022 through 2026 for the Countering Chinese Influence Fund to counter the malign influence of the Chinese Communist Party globally.”
[The] term ‘malign influence’ with respect to the Chinese Communist Party should be construed to include acts conducted by the Chinese Communist Party or entities acting on its behalf that:
undermine a free and open international order
advance an alternative, repressive international order that bolsters the Chinese Comminst Party’s hegemonic ambitions and is characterized by coercion and dependency
undermine the national security or sovereignty of the United States or other countries
undermine the economic security of the United States or other countires, including by promoting corruption
The criteria here are vague. Under this definition, it’s unclear where malign influence begins and ends.
Now that we’re nearly three months into the Biden term, American China policy under his watch is beginning to take shape. The Biden administration has maintained most of the Trump administration’s hardline China policies. However, although the Biden team is aligned with the previous administration’s general direction, the methods differ in many ways.
Legislation like the Strategic Competition Act of 2021 and similar private initiatives are hard to define in simple terms. It’s almost better to see this as a fundamental mindset shift for the United States. Fundamentally it’s a reassessment of the United States’ role in the world and its new approach to China as a near-peer competitor. It also represents a new model for US government geopolitical coordination with the private sector.
Overall, it’s a good thing that the United States is firmly committed to entering a new era of strategic competition with China. However, US lawmakers must be mindful to avoid painting an exaggerated portrait of China’s threat capabilities. Countering Communist Party influence isn’t unreasonable. But if 2020 taught us anything, it’s that the United States is never far from falling into the trap of outlandishly viewing the CCP as the root of all of America’s problems.
Current Events and Additional Reading
US-China Relations
Yellen Plans to Spare China From Currency Manipulator Label
Treasury Secretary Janet Yellen will decline to name China as a currency manipulator in her first semiannual foreign-exchange report, according to people familiar with the matter, a move that allows the U.S. to sidestep a fresh clash with Beijing.
National Intelligence Council’s Global Trends report
Global Trends is designed to provide an analytic framework for policymakers early in each administration as they craft national security strategy and navigate an uncertain future. The goal is not to offer a specific prediction of the world in 2040; instead, our intent is to help policymakers and citizens see what may lie beyond the horizon and prepare for an array of possible futures.
Secretary Antony J. Blinken With Chuck Todd of NBC’s Meet the Press
QUESTION (Chuck Todd): Are we prepared to defend Taiwan militarily?
SECRETARY BLINKEN: So, Chuck, what we’ve seen and what is a real concern to us is increasingly aggressive actions by the government in Beijing directed at Taiwan, raising tensions in the straits. And we have a commitment to Taiwan under the Taiwan Relations Act, a bipartisan commitment that’s existed for many, many years, to make sure that Taiwan has the ability to defend itself and to make sure that we’re sustaining peace and security in the Western Pacific. We stand behind those commitments.
And all I can tell you is it would be a serious mistake for anyone to try to change the existing status quo by force.
US-EU-China Relations
America Needs a New Transatlantic Script to Deal with China
Battered relentlessly by former President Donald Trump over four difficult years, relations between the United States and the European Union are back on track, with China providing an important spur for the renewed warmth. Expect no automatic and complete U.S.-EU alignment of views on China, however. As it gets underway, the transatlantic conversation will spotlight both convergences and divergences in the United States and EU approaches towards Beijing. For all their enthusiasm for President Joe Biden’s interest in working with allies, EU leaders have no appetite for a China policy based on confrontational zero-sum games, starting another calamitous cold war or a discussion dominated by hard security and references to preserving U.S. primacy in the Indo-Pacific region.
Photo by Paul Frenzel on Unsplash