Just as President Joe Biden hasn’t abandoned all of his predecessor’s policies on oil and gas, recent actions show that he is also continuing former President Donald Trump’s skeptical stance when it comes to China.
After extending some of Trump’s investment restrictions on Chinese companies, Biden also gave support to bipartisan legislation passed by the Senate that would increase U.S. investment in cutting-edge technology in order to out-compete the world’s most populous nation.
The U.S. Innovation and Competition Act cobbled together several pieces of legislation moving through the Senate, including the Endless Frontier Act, which would expand the National Science Foundation to advance research and development into 10 technological focus areas, including semiconductors, artificial intelligence, biotechnology, advanced energy and quantum computing.
“We are in a competition to win the 21st century, and the starting gun has gone off,” Biden said after the bill’s passage on June 8. “As other countries continue to invest in their own research and development, we cannot risk falling behind. America must maintain its position as the most innovative and productive nation on Earth.”
The bipartisan legislation, which featured lead sponsorship by Senate Majority Leader Chuck Schumer, a Democrat from New York, and Indiana Republican Senator Todd Young, passed the Senate 62-38.
“Americans have always looked towards the frontier and forward to new horizons. This bill, this moment, it’s not only about beating the Chinese Communist Party; the Endless Frontier Act is about using their challenge to become a better version of ourselves through investment in innovation,” Young said in a statement.
While the House of Representatives must now act before the legislation becomes law, Biden was able to unilaterally move to further restrict Chinese companies in the U.S. With an eye on persecuted minority communities within China, Biden’s administration added the list of companies which are prohibited from American investment, expanding restrictions on the Communist nation that Trump ushered in shortly before leaving office.
Through an executive order issued on June 3, Biden’s administration expanded the list of companies to 59, all of which have ties to China’s military. Several of the companies added to the list were tied to surveillance technology that the Biden administration believes is used to monitor minority populations within the country.
“I find that the use of Chinese surveillance technology outside the [Peoples Republic of China] and the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuse, constitute unusual and extraordinary threats, which have their source in whole or substantial part outside the United States, to the national security, foreign policy, and economy of the United States,” Biden wrote in a letter to the speaker of the House of Representatives and the Senate president.
The ban will take effect on Aug. 2, but investors will have one year to fully divest their holdings. The blacklist includes several prominent Chinese companies, across a variety of sectors. Smartphone maker Huawei, which has been working to break into the U.S. market, is on the list, as is Semiconductor Manufacturing International Corp., China’s largest chipmaker. The roster also includes one of the country’s largest energy companies, China National Offshore Oil Corp.
International human rights observers have already warned that China may be using leading-edge surveillance technology to conduct mass surveillance on religious and ethnic minorities. In a September 2020 report, Amnesty International cited three European Union companies selling surveillance technology, such as facial recognition software, to China at the risk of it being used to monitor the activities of the Uyghurs and other predominantly Muslim ethnic groups throughout the country.
“Biometric surveillance tools, including facial recognition software, are among the most invasive digital surveillance technologies that enable governments to identify and track individuals in public spaces or single them out based on their physiological or behavioral characteristics,” the international human rights group said in its report. “These technologies pose a clear threat to the rights to privacy, freedom of assembly, speech, religion and non-discrimination.”
When Trump issued the original order in November 2020 banning investment in these specific Chinese companies, his administration argued that, since several of these companies are publicly traded, American investors could unwittingly be funding China’s military and intelligence services through investments like 401ks, where fund managers direct where funds are placed.
Trump’s action served “to protect American investors from unintentionally providing capital that goes to enhancing the capabilities of the People’s Liberation Army and People’s Republic of China intelligence services, which routinely target American citizens and businesses through cyber operations, and directly threaten the critical infrastructure, economy, and military of America and its allies and partners around the world,” then-National Security Advisor Robert C. O’Brien said at the time the order was implemented.
(Edited by Matthew B. Hall and Bryan Wilkes)
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