A Major Investment in Infrastructure is Essential to U.S. Competition with China

About the Author: Finn Rosenfeld is a first-year law student at American University- Washington College of Law. Finn graduated from Syracuse University and hopes to work on the Hill or at a federal agency doing policy and legislative work after graduating law school.

 

President Joe Biden introduced his infrastructure plan on March 31, 2021, calling it “the largest American jobs investment since World War II.”[i] Dubbed the “American Jobs Plan” (the plan), President Biden’s proposal comes with a $2 trillion-plus price tag and encompasses much more than what has been traditionally thought of as infrastructure.[ii] The plan includes investments in everything from roads and bridges to high-speed broadband to caregiving.[iii] The proposal is massive, and, while there is much to be analyzed and debated, major infrastructure investments are essential to countering an increasingly powerful and dominant China.

At its core, of course, the plan is a domestic policy initiative, one that the administration argues will create millions of jobs and a stronger economy—and one that Republicans criticize as largely a progressive wish list deceitfully disguised as infrastructure and financed by a job-killing corporate tax hike.[iv] Yet, significant pieces of the proposal have been constructed with the express purpose of enabling the U.S. to better compete with China and are crucial to that end.[v] A sentence in the first paragraph of the official White House fact sheet for the proposal reads, “The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.”[vi] Chinese leadership sees America in a long-term state of decline, and U.S. officials fear China will act accordingly, perhaps even recklessly, as a result.[vii] They are intent on combating that impression, and the infrastructure program is a key part of that effort.[viii] “This is central to our national security strategy,” National Security Advisor Jake Sullivan said in an interview.[ix] “Central, essential, foundational to our national security strategy.”[x]

China invested heavily in R&D spending and infrastructure projects during its transition into a global economic power, quickly closing the gap between itself and the U.S. as the world leader in R&D spending.[xi] The U.S. is one of only a few major economies in the world whose public investment in R&D as a share of GDP steadily fell over the last twenty-five years.[xii] Chinese investment in roads, high-speed rail, airports, internet connectivity, and R&D have outpaced the U.S. for far too long.[xiii]

There are three provisions of the Biden infrastructure plan that will most directly bolster the U.S. in its competition with China.[xiv] The $180 billion investment in federal funding for R&D will allow the U.S. to lead in critical emerging technologies.[xv] The $50 billion for semiconductor manufacturing and research will increase domestic manufacturing of semiconductors and reduce dependence on China for the computer chips now essential to a vast array of products.[xvi] And the creation of a new office in the Commerce Department, with a $50 billion budget, to work on bringing supply chains back to the U.S. from abroad, will further reduce dependence on China for many essential supplies.[xvii] These provisions, as well as the plan’s investments in education and physical and digital infrastructure, will position the U.S. and its private sector to compete from a position of strength.[xviii]

While there is much in the plan that will certainly not achieve bipartisan support, leading Republicans have indicated a willingness to support measures to counter China’s economic rise.[xix] Whatever the plan’s final form and whether a final bill is passed with bipartisan support or through party-line budget reconciliation, it is essential to long-term U.S. economic and security interests that major investments are made to enable the U.S. to compete with China. As President Biden rightly asked and stated, “Do you think China is waiting around to invest in this digital infrastructure or in research and development? I promise you they are not waiting. But they’re counting on American democracy to be too slow, too limited, and too divided to keep pace.”[xx]

 

[i] Jim Tankersley, Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy, N.Y. Times (Mar. 31, 2021), https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html.

[ii] Id.

[iii] Id.

[iv] Gerald F. Seib, China Looms Large in Biden Infrastructure Plan, Wall St. J. (Apr. 5, 2021), https://www.wsj.com/articles/china-looms-large-in-biden-infrastructure-plan-11617631234.

[v] Id.

[vi] Fact Sheet: The American Jobs Plan, White House (Mar. 31, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/.

[vii] Frederick Kempe, Op-ed: Biden is Securing America’s Place in the World and Challenging China with His Bold Domestic Agenda, CNBC (Apr. 11, 2012), https://www.cnbc.com/2021/04/11/op-ed-biden-is-securing-americas-place-in-world-with-infrastructure-plan.html; Seib, supra note 4.

[viii] Seib, supra note 4.

[ix] Id.

[x] Id.

[xi] Trudy Rubin, Biden’s Infrastructure Plan is Key to U.S. Competition with China, Phila. Inquirer (Apr. 6, 2021), https://www.inquirer.com/opinion/china-biden-infrastructure-plan-bullet-trains-broad-band-huawei-gop-20210406.html; Jacob J. Lew, How to Counter China’s Global Economic Strategy, Barron’s (Mar. 26, 2021), https://www.barrons.com/articles/what-the-u-s-can-do-to-counter-china-s-belt-and-road-initiative-51616776010.

[xii] Rubin, supra note 11.

[xiii] Id.

[xiv] Seib, supra note 4.

[xv] Id.

[xvi] Id.

[xvii] Id.

[xviii] Lew, supra note 11.

[xix] William A. Galston, Partisanship Is Biden’s Way to the Highway, Wall St. J. (Apr. 6, 2021), https://www.wsj.com/articles/partisanship-is-bidens-way-to-the-highway-11617747450?mod=searchresults_pos9&page=3.

[xx] Kempe, supra note 7.

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