The essence of the U.S. Competition Act: to hinder global development with narrow national self-interest

【Mingdi】

Author: Liu Dian (Special Researcher, Beijing Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era)

Not long ago, the US Senate voted 68 in favor and 28 against the Senate version of the "US Competition Act". The 2,375-page bill includes spending hundreds of billions of dollars in high-tech fields such as semiconductors, with the aim of making China a "strategic rival" and aiming to enhance the competitiveness of the United States in the economic, national security and diplomatic fields, causing widespread concern and controversy around the world.

At present, human society is in a critical period of historical development and transformation process, and the century-old changes and the epidemic of the century are intertwined, bringing many global challenges. High-tech reforms are not yet mature, economic growth and recovery are weak, and the geopolitical situation is volatile, posing a threat to the stability and common development of the global economic system. However, the United States, on the other hand, runs counter to the current trend of the times in which all countries in the world seek development, peace, and cooperation, and continues to deepen strategic competition with China with a Cold War mentality, especially through legislation, the introduction of the "US Competition Act," and constantly improving the "new containment strategy" against China.

From the 2021 Endless Frontier Act to the different versions of the 2022 U.S. Competition Act, the content of the bill has gone beyond the core of the policy focus on strategic competition in science and technology and has been generalized into a "general script for strategic competition with China" to be carried out in all fields. The goal of the 2022 U.S. Competition Act is to enhance U.S. competitiveness in key technologies, industries, and more. But its core is not to "self-strengthen" by stimulating its own competitive advantage, but to suppress it in the name of competition.

On the one hand, the bill focuses on strengthening the ability of the United States to innovate in science and technology, including the creation of the "American Chip Fund" in the United States, which will incentivize the private sector to invest in semiconductor manufacturing, improve the U.S. supply chain and increase domestic production of key products, and promote scientific research and technological innovation in the United States.

On the other hand, the bill pays more attention to promoting the "de-Sinicization" of key technologies in the global industrial chain, supply chain, and value chain, and maintains the technological and competitive advantage of the United States in the global semiconductor and other industries by suppressing China. In addition, the United States has also tried to use external forces to form a so-called "science and technology alliance", such as strengthening cooperation with Japan and Europe in semiconductor research and development, inviting Japan, South Korea, etc. to form a "chip four-party alliance", with the intention of placing China in a situation of technological isolation and accurately achieving the purpose of technology blockade against China. By suppressing China's industrial development, encouraging high-tech industries such as semiconductors to return to the local area, and then promoting the localization and "de-Sinicization" of related industrial chains and supply chains, creating relative strength advantages through power means, it is full of strong hostility and narrow realist power competition.

The United States' intention to reshape the division of labor across transnational industries through political and security means will have a major impact on the stability of global supply chains. As we all know, the international division of labor pattern of "California design, Chinese assembly" that has been formed in the global supply chain is naturally formed in the market competition environment. Whether the large-scale policy intervention of the state can reverse the cross-border division of labor and competition in the field of high-tech technology and manufacturing in the United States is still unknown, but it is bound to seriously undermine the current global high-tech product supply chain and the trust foundation of global technical cooperation, resulting in the delay of product technological progress and the delay of innovation, which is not conducive to global economic growth and social development. The root cause of this destructive impact lies in the fact that the United States shifts the path of obtaining technological superiority from commercial to security, adheres to the realist thinking of zero-sum game, regards China's technological development and national strength improvement as a threat and damage to US national security, and hinders global development with narrow national self-interest.

In fact, in the name of competition and the practice of suppression, the United States' attempt to maintain its comparative superiority through power is not conducive to its own economic and social development. In the context of the deep economic integration between China and the United States, forcibly terminating the interconnection between the two sides in the field of technology, economy and trade to suppress China is an act that harms others and harms itself. The interdependence and interconnection between China and the United States in the economic, trade and technological fields are an important part of supporting the normal operation of US industries and economies. China's huge market scale, complete manufacturing ecology, and complete industrial infrastructure are scarce resources that are difficult to replicate in the short and medium term of the international supply chain. China and the United States are the common supporting forces of the global technology, economy, and infrastructure network system, and if the United States rushes to decouple from China, it will have an immeasurable and significant impact on the global economic system.

Within the United States, the potential impact of the bill's introduction is also accompanied by frequent discussions and controversies. As Clyde Wayne Cruise Jr., director of policy at the Competitive Enterprise Institute, wrote, the introduction of the U.S. Competition Act will have a huge, neglected regulatory effect, and if the United States continues to seek an overly dominant government role in technology policy and investment, huge government spending will change all the trajectories of large enterprises and industries and the competitive environment. In an article titled "The United States and China: A Head-on Strategic Competition," U.S. Nobel Laureate in Economics Michael Spence mentioned that the global economy is facing multiple headwinds such as an aging population, high sovereign debt, geopolitical tensions, increased conflict, and supply chain disruptions. Leading the world to development requires strategic cooperation between the two largest economies, China and the United States, or active strategic competition to promote each country to exert its maximum innovation potential; rather than formulating passive strategic competition to prevent other countries from challenging their own dominant position.

It is worth noting that the adoption of legislation by the United States to institutionalize and frame the negative policy toward China is the first time in the fifty years since the establishment of diplomatic relations between China and the United States. At the critical moment when the global epidemic is intensifying, economic growth is stuck in a bottleneck, and human development is blocked, this bill, which lacks the responsibility of major countries and is full of "zero-sum game" colors, may exacerbate the risk of international security spiraling out of control, major country relations moving out of balance, international order moving out of order, and global governance moving toward imbalance.

Development is the master key to solving all problems. The development of the world needs stable Sino-US relations, and maintaining and stabilizing Sino-US economic and trade relations is in the interests of both the Chinese side and the INTERESTs of the United States, and politicizing economic and trade issues will not help resolve the differences between the two countries. China has always been a builder of world peace, a contributor to global development and a defender of international order. As the world's largest country, the United States has chosen to compete rather than cooperate to concoct the "Competition Act", advocating comprehensive strategic competition with China in an institutionalized manner, putting the maintenance of its global leading position before the well-being of all mankind, running counter to the current trend of peace, development, and cooperation in all countries in the world, and lacking due responsibility to the international community.

History has proved many times that win-win cooperation can achieve common development. China is an important engine of world economic recovery and a loyal promoter of the healthy development of the global economy and society. With the continuous deepening of the reform and opening up policy, China has attracted a large number of multinational companies, using good infrastructure and rich talent resources, sound industrial system, etc., to provide a good platform for technological innovation of developed countries and multinational enterprises, accelerate the industrialization and marketization of innovative technologies, improve their economic benefits and development benefits, and take the initiative to cooperate with the vast number of developing countries to promote local industrial upgrading, and make important contributions to global technological innovation and industrial upgrading.

At the same time, China is committed to optimizing the global economic governance system and achieving common development. At present, the world economy is facing huge downward pressure, the global economy needs new economic growth points, and some traditional economic models are being replaced by new formats, new models and new industries brought about by digital technology innovation. At present, a unified system of economic governance rules on a global scale has not yet been formed. China has always firmly upheld multilateralism and supported multilateral governance mechanisms. Improve the multilateral economic governance mechanism by building a digital economy free trade zone, participating in the regional economic communication and dialogue mechanism, and promoting the overseas construction of new infrastructure, strengthen the economic strategic docking with other countries, share the market dividends and technological dividends of transnational cooperation, and promote the healthy development of the global economy.

Therefore, in order to cope with the crisis of global governance and the aggravation of development deficits under the impact of the new crown pneumonia epidemic, mutual respect, peaceful coexistence and win-win cooperation between China and the United States are the right way for both sides to get along in this era. This year marks the 50th anniversary of the publication of the Shanghai Communiqué between China and the United States. Over the past 50 years, Sino-US economic and trade relations have achieved historic development, and the people of the two countries have benefited a lot from it. In the face of a series of moves by the US side to curb China in recent years, the Chinese side has always stressed that in the new era, China and the United States should adhere to the three-point principle of getting along, that is, mutual respect, peaceful coexistence and win-win cooperation. From public health cooperation to economic revitalization, from improving infrastructure to addressing climate change, China and the United States should break the negative competition based on zero-sum game thinking and security dilemmas, and actively cooperate to keep the two major economies at the forefront of technological innovation, so as to make important contributions to making the global economic cake bigger and achieving universal development.

Guangming Daily (2022.05.18. 12th edition)

Source: Guangming Network - Guangming Daily