China opposes semiconductor bill as it would give U.S. advantage: U.S. commerce secretary

© Reuters. FILE PHOTO: In this illustration image taken on February 25, 2022, a semiconductor chip is seen on a circuit board in a computer. REUTERS/Florence Lo/Illustration

David Shepherdson

WASHINGTON (Reuters) – U.S. Commerce Secretary Gina Raimondo said on Wednesday that the Chinese government opposed efforts by Congress to boost U.S. semiconductor manufacturing because it would put more competitive pressure on the United States.

On Thursday, U.S. lawmakers will formally negotiate a compromise measure that would fund $52 billion in semiconductor manufacturing subsidies and improve U.S. competitiveness in Chinese technology. A final agreement could still be months away.

Republican Senator Shelley Moore Capito asked Raimondo at a Senate Appropriations subcommittee hearing about a Reuters report and other reports that China has been pushing U.S. executives, companies and business groups opposed the China-related bill in Congress.

“I’m not surprised at all. China doesn’t want us to pass this bill. They know this bill will allow us to out-compete them,” Raimondo said, adding that China has invested $1,600 in domestic semiconductor production. One hundred million U.S. dollars. “The last thing they want is our $52 billion investment.”

Raimondo said she had heard reports of China lobbying U.S. businesses, saying they were “deeply concerned … the reason China is so against it is because they know how important it is to us.”

The Chinese embassy had no immediate comment.

Reuters reported in November that the Chinese embassy in Washington had sent a letter to Reuters urging U.S. lawmakers to revise or drop specific bills aimed at boosting U.S. competitiveness.

Chinese officials have warned companies that they risk losing market share or revenue in China if the legislation becomes law, the letter said.

China has expressed opposition to such legislation, arguing it would fuel anti-China sentiment and be based on Cold War-era thinking.

A persistent shortage of chips has disrupted the auto and electronics industries, forcing some companies to scale back production. Raimondo and others have called increased chip production a national security concern.

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