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US lawmaker sees red on China high-tech challenge

US lawmaker sees red on China high-tech challenge

Congressman Donald Manzullo has a poster in his office that hints at his top priority in his new role overseeing US-Asian relations.
It is a poster-size enlargement of a magazine caricature that depicts the veteran Republican lawmaker in a hard yellow laborer's hat. Manzullo's focus is on jobs, and from his new perch, he wants to try to keep Americans from losing high-tech work to China.
In many ways, it is a strange cause for the chairman of the House of Representatives subcommittee on Asia and the Pacific to champion. The panel more typically holds hearings on issues like North Korea's nuclear program, human rights in Myanmar and more acute differences between the United States and China on military matters and currency policy.
The semiconductor industry, Manzullo's main interest, does not seem as if it needs much help.
It is a beacon of bright news in a U.S. manufacturing sector that has lost millions of jobs in the past decade. It is a world leader, providing inputs for a vast array of products ranging from laptops to cars to missiles, and is the biggest source of U.S. exports, including to China.
But it reflects how the economy, and especially job creation has come to dominate U.S. politics, contributing to the Republican gains in November elections that put Manzullo in the chairman's seat. It also demonstrates how China is widely seen as a threat to American prosperity.
Manzullo cites a Chinese government five-year plan to produce its own high-end microchips as a threat to the future of the U.S. industry, which generated $115 billion in sales in 2009 and employs 185,000 Americans.
"If this industry is not saved, we are done because the country that controls the technology and production of high-end processing chips will control the future of manufacturing in the world," he told The Associated Press.
Manzullo, from the midwestern state of Indiana, was first elected in 1992. He is the founder of a bipartisan caucus of lawmakers on manufacturing. His constituency is a manufacturing hub, including in sectors that support the semiconductor and aerospace industries. While there are signs of recovery after the impact of the global crisis, in the main city of Rockford, Illinois, he estimates unemployment is as high as 20 percent.
Tough talk on China is a popular political mantra in Washington. Both Democrat and Republican lawmakers rail against Beijing's trade practices and intervention in currency markets which they contend undervalues the yuan against the dollar by up to 40 percent, making Chinese products cheaper for Americans while increasing the price of U.S. goods in China.
The Obama administration is cagey in its approach and during a recent state visit by China's President Hu Jintao stressed the economic opportunities a growing Chinese market offers for American producers. The administration along with its Republican opponents recognize the need for the United States to bring down unemployment, still officially at 9.4 percent.
"There's nothing good about China taking away U.S. jobs," Manzullo said.
He said the competition from China to the semiconductor industry would be a subject for the foreign policy subcommittee, whose mandate is to oversee U.S. policy and review legislation toward Asia.
Patrick Wilson of the U.S. Semiconductor Industry Association said China still lags behind the United States in microchip production and does not yet make comparable cutting-edge semiconductors. He said China imports many of the chips it needs, often as inputs for products it ends up exporting to the U.S. and elsewhere. To reverse that trend, the government is investing billions of dollars in research and development and education to encourage domestic innovation, and offering tax breaks for foreign investors.
This month, China's State Council, or Cabinet, approved a plan to develop the software and semiconductor industries that envisions a strong role for private Chinese companies. While details have yet to be announced, it also promises to crack down on intellectual property theft, to protect what it hopes its innovative private sector creates.
So far, China has had mixed success in developing high-tech industries, and most of the chip makers on the mainland are from Taiwan. The Communist Party has dispensed money and favors but its meddling, such as dictating what state firms should manufacture, has hampered innovation. China's high-tech successes to date, such as network gear producer Huawei, have been private companies pursuing market openings, helped along with tax breaks and other incentives from local governments.
Manzullo supports the agenda of the U.S. semiconductor association to maintain the upper hand. It wants the U.S. government to ease various regulatory burdens. These include new environmental rules it says are impractical and controls on technology exports it says are outdated. It also wants to reduce corporate taxes to make it cheaper to set up factories at home.
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Associated Press writer Joe McDonald in Beijing contributed to this report.


Updated : 2021-04-21 14:21 GMT+08:00