In the wake of a summit between President Joe Biden and Chinese President Xi Jinping, there appears to be movement afoot to drop the tech investment curbs Congress had been considering as Beijing moves to open its markets to foreign investments.
The summit, which was held in San Francisco in November, could set the stage for not just a thaw in relations that had hit a nadir but a chance to reestablish economic ties between the world’s two largest economies. It appears both nations are taking steps to those ends.
China is seemingly changing course on several policy fronts aimed at opening up the Chinese market to joint ventures with Western companies. China’s official state news outlet, Xinhua News Agency, called implementing “the San Francisco vision into actual policies and concrete steps” a matter of “first-rate importance,” as reported by Bloomberg.
One motivation behind the change in attitude is allegedly to stop foreign capital from leaving the country and causing an economic crisis, The Dallas Express reported.
Reciprocal actions on Capitol Hill appear to be meeting China’s newfound openness. According to another Bloomberg article, the House Financial Services Committee chair, Rep. Patrick McHenry (R-NC), is blocking plans to tighten control on U.S. investment in the Chinese technology sector through the annual defense policy bill. McHenry claimed the bill would benefit from being more targeted rather than imposing broad-based restrictions.
The bill sailed through the Senate, where it was sponsored by Sen. John Cornyn (R-TX) along with Sen. Bob Casey (D-Pennsylvania). Casey warned that without the latitude to restrict China’s tech development broadly, the bill would not be effective in stopping Chinese theft of hard-earned American innovation, per Bloomberg.
“You might sanction one company, and then another pops up over here,” Casey said in an interview in November. “Whereas by virtue of focusing on sectors, you’re really disabling their ability to continue to benefit from our innovation, our know-how, our investment — to our detriment.”
The Dallas Express spoke with Doug Kelly, CEO of the American Edge Project, a think tank dedicated to promoting American technology innovators and businesses, about why he believes China must not be allowed to win the competition over cutting-edge technology.
Kelly noted that the United States has been losing tech-related jobs to China for years, depriving young people of opportunities to enter the industry.
“In the 1980s, you could leave high school and work in any of the 40 factories in the city of Adrian, Michigan,” Kelly recalled about the town where he was raised. According to Kelly, between 2001 and 2009, his home county lost 43% of manufacturing jobs. The factories were shuttered, and the jobs moved to China.
“These are not just numbers, but my neighbors,” Kelly explained.
Kelly explained that having commandeered the heartland’s industrial base, China is now setting its sights on dominating cutting-edge technology.
According to Kelly, Xi Jinping is implementing a three-part plan to reach its goal. The plan includes the investment of billions of dollars in the sector but also “stealing as much as they can,” including vital technology like artificial intelligence. The last prong of the plan involves making the world more dependent on China’s technology.
Kelly called China “a full spectrum competitor that has very different values. That’s why it matters who wins the tech race.”
He advocated for removing what he considers excessive regulations that stifle innovation. To that end, he praised the Texas CHIPS Act, which was passed in the summer of 2023 to boost microchip manufacturing in the state, saying it wisely promoted a mixture of incentives and collaborations with universities and other institutions for chip design and manufacturing projects.