"WASHINGTON — Faced with an urgent competitive threat from China, the Senate is poised to pass the most expansive industrial policy legislation in U.S. history, blowing past partisan divisions over government support for private industry to embrace a nearly quarter-trillion-dollar investment in building up America’s manufacturing and technological edge.
The legislation, which could be voted on as early as Tuesday, is expected to pass by a large margin. That alone is a testament to how commercial and military competition with Beijing has become one of the few issues that can unite both political parties.
It is an especially striking shift for Republicans, who are following the lead of former President Donald J. Trump and casting aside what was once their party’s staunch opposition to government intervention in the economy. Now, both parties are embracing an enormous investment in semiconductor manufacturing, artificial intelligence research, robotics, quantum computing and a range of other technologies.
And while the bill’s sponsors are selling it in part as a jobs plan, the debate over its passage has been laced with Cold War references and warnings that a failure to act would leave the United States perilously dependent on its biggest geopolitical adversary.
“Around the globe, authoritarian governments smell blood in the water,” Senator Chuck Schumer, Democrat of New York and the majority leader, warned in a recent speech on the Senate floor. “They believe that squabbling democracies like ours can’t come together and invest in national priorities the way a top-down, centralized and authoritarian government can. They are rooting for us to fail so they can grab the mantle of global economic leadership and own the innovations.”
Mr. Schumer and the bill’s other sponsors have steered clear of the phrase “industrial policy,” knowing that would revive a 30-year-old debate about whether the government was picking winners and losers, or championing certain industries over others. That argument goes back to the days of the Reagan administration, when the biggest threat to America’s semiconductor and auto industries seemed to be Japan, and the federal government started some small-scale initiatives, including one called Sematech, to reinvigorate the semiconductor industry. (The federal government’s participation in Sematech ended a quarter-century ago.)
“This means we’re going to invest in quantum computing or A.I. or biomedical research, or storage, and then let the private sector take that knowledge and create jobs,” Mr. Schumer said, adding later: “These are the areas of dominance that we need research in, and these are the areas of potential industrial growth; great job growth.”
One difference from the debate in the 1980s is that Japan is both an industrial competitor and a military ally. China, of course, is a rising geopolitical rival, and that has changed the nature of the debate. No one argued in the 1980s that Japan would use its largest companies as a tool for surveillance or a potential weapon of war; that is exactly the concern about China.
“The commercial and military distinction is eroded in China’s case,” said Senator Chris Coons, a Delaware Democrat who co-sponsored several bills that have been folded into the legislation. In China, “almost all the big companies are elements of state power and tightly connected to the central government, which largely has financed their dramatic rise.”
What is most striking about the legislation is the degree to which the projects that the bill funds closely parallel those in China’s “Made in China 2025” program, which funnels huge government spending into technologies where the country is seeking to be independent of outside suppliers. The Chinese government announced its initiative six years ago.
The result, many experts say, is that the bill may accelerate the decoupling of the world’s largest and second-largest economies, even as each worries about how dependent it is on the other. Beijing fears that it will be reliant for years on foreign sources for the most advanced chips and cutting-edge software; Washington has the mirror-image worry that China’s dominance in 5G technology will give Beijing the ability to cut off American telecommunications.
The shift to limit the intertwining of the two economies may also be sped by steps like the one President Biden took on Thursday, when he issued an executive order barring Americans from investing in Chinese businesses that support China’s military, or that manufacture surveillance technology used in ethnic or religious repression.
While some Republicans have balked at the bill’s costs — a $52 billion subsidy program for the country’s semiconductor firms and another $195 billion in scientific research and development — most are still signing on. And that has created concerns that the legislation, a classic Washington mash-up of other bills that has grown to more than 2,400 pages, may be longer on cash than real strategy."
The Lithuanian elite still dreams that, unnoticed by the Americans, they will sell Russian-funded Lithuanian laser technology to the Chinese in silence and personally gain riches. Security apparatus must be interested in these plans, because China is becoming a military rival of NATO and Lithuania is a member of NATO.
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