Focus on U.S.
The Senate is starting work on a new bipartisan bill that will both further block China from using American capital to develop its most cutting-edge technology, and shore up Washington’s support for Pacific security partners.
Photo Gettyimages by Andrew Burton
Senate Majority Leader Chuck Schumer, D-N.Y., announced the plans Wednesday after directing his committee chairs to work with their Republican counterparts to begin crafting the legislation, which he hopes to move within the next several months.
“We will work to halt the Chinese government’s development of advanced technologies that we know will shape the course of this century,” Schumer told reporters at a news conference flanked by about a dozen Senate Democrats. “We need to build on the kinds of actions like the Biden administration’s export control rule to block the flow of chip-tooling technology to China.”
The Commerce Department’s Bureau of Industry and Security announced a sweeping range of export controls last year that severely curtailed China’s ability to obtain some of the world’s most cutting-edge microchips, arguing that Beijing could use them to “produce advanced military systems” through artificial intelligence algorithms. Since then, the Biden administration has persuaded the Netherlands and Japan — also leaders in advanced semiconductor technology — to instate their own export controls against microelectronics exports to China.
These semiconductor export controls hamper China’s ability to build sophisticated supercomputers needed to produce advanced AI algorithms, which could rapidly sift through data to inform battlefield decisions under compressed time frames. These advanced chips and the technology they enable are also needed for advanced civilian technology like weather forecasting and vaccine development.
Schumer noted that he’s tapped Senate Foreign Relations Committee Chairman Bob Menendez, D-N.J., and Banking Committee Chairman Sherrod Brown, D-Ohio, to begin looking at additional authorities the Biden administration could use to expand its export control regime against China.
China has set 2030 as its target date to become a global leader in artificial intelligence, with the subsequent goal of putting the People’s Liberation Army on par with the U.S. military by 2035 — a goal that U.S. export controls and the Senate’s upcoming legislation intend to complicate.
“We want to limit the flow of investment to the Chinese government,” Schumer said. “It’s incumbent on us to ensure that the U.S. is not the financial lifeblood supporting the Chinese government and its military technological advancement.”
The bill will also build upon legislation Congress passed last year to lessen U.S. dependence on China for supply chains crucial to the defense-industrial base, including semiconductors and critical minerals. That included $52 billion in annual CHIPS Act subsidies and tax incentives through 2026 meant to sway American and Asian semiconductor manufacturers to produce microelectronics within the United States.
“Now we have to build on those investments so that we are positioned to compete against the [People’s Republic of China] in the way that we need to,” Sen. Jeanne Shaheen, D-N.H., said at the news conference.
Most advanced microchip production is concentrated in Asia, and the U.S. does not produce any of the world’s leading semiconductors needed for materiel such as precision-guided munitions and the F-35 fighter jet.
The Taiwan Semiconductor Manufacturing Co. is slated to begin producing the world’s most advanced semiconductors in 2026 after it opens a factory in Arizona using subsidies from the CHIPS Act. Taiwan produces about 92% of the world’s most advanced semiconductors.
“We must continue to deter the Chinese government from any conflict with Taiwan,” said Schumer, noting that the new bill will also focus on closer alignment with allies and security partners in the region.
Schumer said he intends to revisit a Taiwan bill that the Senate Foreign Relations Committee advanced last year. A $10 billion Taiwan military aid authorization from that bill made its way into the fiscal 2023 National Defense Authorization Act, though congressional appropriators have yet to fund much of that security assistance.
But concerns from the White House kept other components of the bill from becoming law, including sanctions on China for acts of aggression against Taiwan and upgrades to the island’s diplomatic status.
Senate Armed Services Committee Chairman Jack Reed, D-R.I., noted that the CHIPS Act “has provided more security to our military-industrial base.” He added that the new China bill would seek to build upon security cooperation in the Asia-Pacific region while enhancing mechanisms such as the trilateral AUKUS agreement with the United Kingdom and Australia, as well as the security group known as Quad, which also Australia as well as Japan and India.
“We want to create a force structure, which is combining all of our allies, being able to conduct operations and communication on an uninterrupted basis, in fact telling the Chinese and showing the Chinese that they would be up against the world if they tried anything,” Reed said.
The House Select Committee on the Chinese Communist Party is also preparing a series of bipartisan proposals to rapidly arm Taiwan and enhance cybersecurity with Taipei, Defense News reported last week.
The panel’s chairman, Rep. Mike Gallagher, R-Wis., told Defense News in an exclusive interview that he intends to include those proposals as amendments to the FY24 NDAA, which the House Armed Services Committee will mark up later this month.
Gallagher singled out bolstering U.S. munitions production through multiyear contracts and ameliorating the $19 billion arms sale backlog to Taiwan as some of his key defense priorities on the committee.