House passes sweeping China competition bill

The House passed legislation on Friday aimed at bolstering domestic supply chains and scientific research to make the U.S. more competitive with nations like China.

Lawmakers passed the bill largely along party lines, 222-210, with one Republican voting for it and one Democrat voting no.

Rep. Adam Kinzinger (R-Ill.), who backed the bill, authored numerous provisions related to boosting supply chains, while Rep. Stephanie Murphy (D-Fla.), who voted “no,” said in a statement she objected to “problematic, poorly-vetted provisions” related to trade.

Passage comes about seven months after the Senate passed its version in June with the support of 18 GOP senators.

Both chambers will now have to reconcile their competing versions and ultimately reach an agreement that can draw at least 10 Republicans in the evenly split upper chamber, since it will be subject to Senate rules requiring at least 60 votes for most legislation. 

The massive legislative package includes measures to address the global semiconductor chip shortage and strains on the U.S. supply chain, both of which have contributed to the recent spike in inflation.

That includes $52 billion to incentivize domestic semiconductor chip production as well as $45 billion in grants and loans through the Department of Commerce to help support and enhance manufacturing facilities to strengthen domestic supply chains.  

It would further increase funding for science research at the National Science Foundation and Department of Energy, in addition to making investments to recruit more people to work in fields related to science, technology, engineering and math.

House Democrats touted the bill as a way to help address the rising cost of goods eating into Americans’ paychecks and recent supply chain shortages plaguing store shelves.

“The America COMPETES Act will ensure that America is preeminent in manufacturing, innovation and economic strength, and can out-compete any nation,” Speaker Nancy Pelosi (D-Calif.) said ahead of Friday’s vote.  

At the same time, members of the Congressional Asian Pacific American Caucus (CAPAC) expressed concern that framing the bill as a race against threats from China could stoke anti-Asian sentiment at a time when hate crimes have spiked during the COVID-19 pandemic. 

In a nod to their concerns, Democrats added amendments from CAPAC leaders that formally condemn anti-Asian hatred and direct the president to ensure that provisions in the bill to counter the Chinese Communist Party’s influence are implemented in a way that doesn’t lead to discrimination against people of Asian descent.

“We are talking about American preeminence as we contrast with China. We don’t want anyone transferring any of that — as some have done, including the former president — onto Asian Americans in our country,” Pelosi said, referring to former President Trump.

While many top Democrats primarily highlighted the measures meant to help ease domestic supply chain woes, the legislation also includes numerous provisions to exert diplomatic pressure on the Chinese government.

That includes sanctions on the Chinese government for its human rights violations against the Uyghurs in the Xinjiang region. The legislation would also create a “China Watcher” program designating Foreign Service officer positions to “monitor and combat Chinese malign influence” at U.S. posts abroad. 

Other provisions would formally condemn the Chinese government for its actions undermining Hong Kong’s established autonomy by imposing a sweeping national security law and provide temporary protected status and refugee status for qualifying Hong Kong residents.

The legislation does include several measures originally authored by Republicans to strengthen supply chains, invest in U.S. science innovation and require federal agencies to establish policies to ensure that people receiving research grant rewards aren’t malign foreign government agents. The House previously passed some of those individual bills last year on a bipartisan basis.

Despite those measures, House GOP leaders urged their rank-and-file members to vote against the legislation Friday. They objected to climate change provisions that Democrats had inserted into the bill, including $8 billion over two years to the Green Climate Fund established by the United Nations to help developing countries respond to climate change, and argued that trade adjustment assistance measures to aid workers who lose their jobs went too far. 

“While it contains some provisions supported by Republicans, Speaker Pelosi is holding these good ideas hostage by using this 3,000 page bill as a vehicle for the party’s far-left agenda,” said House Minority Leader Kevin McCarthy (R-Calif.). 

McCarthy further questioned the effectiveness of a provision in the bill that calls on the International Olympic Committee to move the 2022 Winter Games from Beijing when the event is already starting this week. The U.S. is staging a diplomatic boycott of this year’s Winter Games, along with several other allies like Canada, Britain and Australia. 

“Frankly, it’s too little, too late,” McCarthy said. “I bet you China laughs, just like they laugh at this bill.” 

The Biden administration, eager to reverse the president’s sagging approval ratings, is pressing Democrats in Congress to move quickly to reach a deal on the legislation. 

“Let’s get another historic piece of bipartisan legislation done,” President Biden said in a speech marking a new Intel semiconductor plant last week. “Let’s do it for the sake of our economic competitiveness and our national security.”

House Democrats facing competitive reelection races this year are also eager to show they’re taking action to address rising prices and supply chain shortages. 

Rep. Elissa Slotkin (D-Mich.) voted against a procedural rule this week advancing the legislation as a way to protest the process that led Republicans to oppose it. She still backed the bill’s passage on Friday, however. 

“This vote was a shot across the bow to the Democratic leadership to make clear they need to get serious about compromising with the Senate to get this bill signed into law,” Slotkin said. “Passing a bill just through the House will do nothing to get microchips to the auto plants I represent.”

Updated at 11:38 a.m.