Chinese diplomatic personnel at the country’s American embassy have pressured business executives to lean on U.S. lawmakers to modify or cancel legislation that would boost America’s competitive position with China.
The correspondence explicitly addresses the U.S. Innovation and Competition Act (USICA) and the Eagle Act. The USICA passed the Senate in June with support from Republicans and Democrats. The Eagle Act is related to the USICA, and both are designed to boost American competitiveness in semiconductor production. Both bills are currently stalled out in the House, which struggles with Joe Biden’s massive Build Back Better reconciliation spending bill.
The Chinese government opposes the bills, and the letters that have been disclosed in opposition to them were sent to numerous American influencers, who were directly pressured to oppose the legislation.
The letters state in part that the Chinese government “sincerely hopes” that recipients will urge legislators to “abandon the zero-sum mindset” and prejudice against China by deleting “negative provisions.” The letters go on to say that opposing the pro-American bills will “create favorable conditions” for cooperation “before it is too late.”
The Chinese lobbying material adds that China’s “negative impacts” will not protect U.S. companies, and the proposed bills will only “hurt everyone.” It declares that an American supply chain that does not include Chinese production will reduce Chinese demand for American products, essentially threatening retaliation against the U.S. if it enacts legislation that strengthens domestic production capacity.
Last week, Pentagon spokesman John Kirby was asked whether China or climate change posed a bigger threat to American foreign policy interest. He responded by saying that both “are equally important.”
Reuters also reported that staffers from the Chinese embassy in Washington had delivered the same messages in meetings with American industrial leaders. It was reported that the in-person approach was geared toward delaying the pending bills rather than killing them entirely in the House.