US $280 Trillion 'China Containment Bill' Nears Passage... Hopes for Trade Cooperation Also Raised

US Innovation and Competition Act to Pass Senate Soon... Bipartisan Support from Democrats and Republicans
$190 Billion for Technology Enhancement... $54 Billion Allocated for Semiconductors and More

[Asia Economy Beijing=Special Correspondent Jo Young-shin, New York=Special Correspondent Baek Jong-min] The passage of a $280 trillion-scale China containment bill being promoted by the U.S. Congress is imminent.

According to U.S. media such as Politico on the 2nd (local time), the bill named the "U.S. Innovation and Competition Act" is expected to pass the Senate soon. The Senate originally planned to pass the bill on the 27th of last month, but some Republican senators raised objections, saying there was not enough time to amend the bill, so it was decided to discuss it again on the 8th.

There is a dominant view that the passage of the bill itself will not be a problem as both Democrats and Republicans share bipartisan consensus on a comprehensive bill to contain China. Politico described the bill as "possibly the last major bipartisan victory the Senate can achieve this year."

This bill combines several bills, including the Senate Foreign Relations Committee's Strategic Competition Act, encompassing measures to contain China through securing U.S. competitiveness. The bill amounts to $250 billion (approximately 280 trillion won). $190 billion is allocated to strengthening U.S. technology, and $54 billion (60 trillion won) is designated to enhance semiconductor and communication equipment production. The bill also includes diplomatic measures to respond to China's increasing international influence by strengthening cooperation with allies and U.S. engagement in international organizations. After passing the Senate, the bill will go through the House of Representatives and take effect once President Joe Biden signs it.

While U.S. pressure on China continues, the possibility of cooperation between the two countries in the trade sector has also been raised. Chinese Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen met via video conference yesterday. This was the first face-to-face meeting between the economic heads of the U.S. and China since the Biden administration took office. Vice Premier Liu had previously spoken by phone with Katherine Tai, U.S. Trade Representative, on the 27th of last month.

Chinese Vice Premier Liu He (left) and U.S. Treasury Secretary Janet Yellen [Photo by EPA Reuters]

The state-run Xinhua News Agency evaluated the video call between Vice Premier Liu and Secretary Yellen as an occasion for frank exchange of opinions on mutual interests between the two countries.

However, voices within China caution against excessive optimism, as the Biden administration continues the Trump administration's malicious trade policies. The Global Times reported that obstacles to improving relations between the two countries still exist, such as President Biden maintaining the Trump administration's tariff policies and sanctions on Chinese companies.

Dong Shaofeng, senior researcher at the Chongyang Institute for Financial Studies at Renmin University, said, "The Biden administration will make demands similar to the Trump administration, such as additional imports of U.S.-made products," adding, "China is concerned about U.S. monetary policies causing inflation."

Gao Lingyun, a researcher at the Chinese Academy of Social Sciences, expressed concern, saying, "The U.S. is facing much greater difficulties in healing the wounds caused by COVID-19 than China," and "To overcome this, the U.S. may demand more from China."