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China in the eyes of the USA: a rival to dethrone!

The anti-Chinese wind is blowing strong in Washington. There is now a fairly widespread consensus that the US is now in a new era of superpower competition. China continues to bolster this domestic opposition, most recently by adopting Putin’s stance on Ukraine.

Basically, there are two “camps” in Washington. The first wants to see in it a new version of the Cold War. He wants to erect barriers and obstacles to Chinese progress in every way possible. The second camp sees the long-term competition the US faces and realizes that America has been sitting on the couch too long watching TV and eating potato chips.

This week, the House of Representatives passed the America COMPETES Act.

Two years ago, a bipartisan group of senators and congressmen introduced what is called the Endless Frontiers Act. The name refers to a famous white paper published shortly after World War II by the famous Vannevar Bush, who was the director of the Office of Scientific Research and Development during that war. Bush’s white paper “Science, the Endless Frontier” established one of the most powerful and impactful policy directions in American history. The document called on the federal government to become a sponsor and investor in the development of basic science as the foundation of a modern economy and a strong defense. This white paper remained the DNA of America’s economic success for years.

Seeing America falling behind in the competition with China, bipartisan members of Congress crafted the Endless Frontiers Act as a major boost to federal government support for innovation in America. Last year, the Senate passed a more advanced version and called it the US Competition and Innovation Act. This is a resolution that promised the greatest increase in public spending on R&D and creating new institutions to channel it.

The US now recognizes that the real competition with China is in technology and trade.

China has significant advantages. They start with 1.4 billion consumers, four times the number of US consumers. This is an incredible advantage for Chinese companies. Chinese state-owned enterprises have no real cost of capital and do not have to make a profit.

The Chinese government uses the sophisticated spying capabilities of its intelligence service to spy for commercial gain. China is increasingly limiting access to its market for political purposes.

America should not and will not be able to change its basic economic model to fight against Chinese aggression.

On the other hand, the American administration will be called upon to ensure fair conditions for the private sector.

Still, this competition has not finished having economic and political repercussions in different parts of the world.

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