“We should not be dependent on the Chinese Communist Party for technology,” Rep. John Moolenaar (R-Mich.), the committee’s chairman, said of the Chinese Communist Party. “I believe it should be an all-hands-on-deck effort.” [for] “It’s about winning this strategic race and addressing the threat the Chinese Communist Party poses to our way of life.”
On Wednesday, the committee will hear testimony about Chinese practices in the drone, semiconductor, shipbuilding and steel industries — “areas where the Chinese Communist Party is trying to gain control and exploit vulnerabilities in the supply chain,” Moulenaar said in a phone interview.
Get caught up in
Stories to keep you up to date
Among those expected to attend is Adam Bry, CEO of drone maker Skydio, a San Mateo, Calif.-based company that makes drones for both commercial and military use. According to Bry’s LinkedIn page, Ukrainian authorities are using Skydio drones, which can perform 3D scans of surface terrain, to investigate potential war crimes.
In March, Moulenaar’s committee, formally known as the House Select Committee on U.S.-China Strategic Competition, called for “immediate action,” including new tariffs, to counter China’s drone advantage. The committee could propose legislative remedies later this year.
“We have seen China’s economic tactics used repeatedly in industries like steel, aluminum, glass, paper and appliances, and they have done great harm to our industrial base, so we will not stand by while they employ those same tactics, especially in strategic areas that could affect our economy and national security,” said Rep. Raja Krishnamoorthi (R-Ill.), the committee’s ranking Democrat.
China heavily subsidizes companies across a range of industries, with favored companies receiving roughly 2% of their production, according to a study by the Center for Strategic and International Studies. China spent $248 billion on subsidies in 2019, more than its defense budget and nearly double that of the United States, according to CSIS.
China’s steel mills, electric-car makers, semiconductor developers, solar-panel makers, shipbuilders and oil producers all benefit from an extensive network of state support, with the central government providing cheap loans from state-run banks, free or cheap land, discounted electricity tariffs and cash support from a state investment fund.
The United States has complained for years about Chinese industrial subsidies but to little effect: World Trade Organization rules limit but do not ban them.
The Trump administration had planned to pressure Beijing to review its use of subsidies in negotiations following the 2020 “Phase 1” U.S.-China trade deal, but that never happened. President Biden recently imposed a 100% tariff on Chinese-made electric vehicles to prevent subsidized auto imports from dominating the U.S. market.
U.S. reliance on China for a wide range of goods and raw materials is the result of decades of bipartisan trade policy.
“I think we mistakenly thought that China would become more like the United States, more freedom-loving, more free-market-oriented, more rule-of-law based, and that as China’s middle class grew, people would expect their government to be more open,” Moulenaar said. “And unfortunately, the opposite has happened.”
