China Task Force Report

Eakinomics: China Task Force Report Yesterday the Republican leadership in the House of Representatives released the final report of the China Task Force (CTF). The CTF, formed in May 2020, was intended to be a bipartisan investigation into U.S. policy toward China. In the end, Democrats chose to not join. Nevertheless, “The CTF prioritized recommendations that have bipartisan support and have already moved forward in the legislative process. As a result, well over half of the legislative recommendations are bipartisan and more than one-third have passed either the House or the Senate. This report is the blueprint for bipartisan actions Congress and the Administration can take now to address the greatest national and economic security challenge of this generation.” One thing to note is the exhaustive process. “Fifteen Members representing 11 Committees addressed the U.S. strategic competition with the [Chinese Communist Party] by focusing on: Ideological Competition, Supply Chain Security, National Security, Technology, Economics and Energy, and Competitiveness. The CTF conducted briefings with current and former administration officials on both sides of the aisle, business executives, Ambassadors, and various outside experts. In total, the CTF engaged with more than 130 leaders to provide insights and solutions for its comprehensive action plan.” (Full disclosure: I provided the CTF a briefing on tax and trade policies toward China.) This process yielded a report with over 80 key findings and more than 400 recommendations. Obviously, there is far too much material to summarize here; let me just note two themes that stand out in the recommendations. The first is the need for multilateral efforts to address the threat posed by the People's Republic of China (PRC). For example, the recommendations include:   Supporting the formation of a new D-10 group of leading democracies to develop and deploy 5G and subsequent generations and establishing a reimbursement program for companies to remove equipment from their communications networks that poses a national security risk; Harmonizing export-control policies with our partners and allies to keep critical technologies, including semiconductor manufacturing equipment and R&D, from our adversaries; and Strengthening trade relationships with our allies to establish U.S. standards and counter the PRC’s influence. These proposals stand in sharp contrast with the bilateral approach of the Trump Administration. The other interesting feature is that the competitiveness recommendations focus on basic research and skills. These recommendations include:   Doubling the funding of basic science and technology research over the next 10 years; Increasing coordination and funding for STEM education to create a more capable, skilled workforce; and Strengthening the protection of sensitive research at America’s colleges and universities and leading research institutions, which includes restricting all federal employees and contractors from participating in foreign talent programs. Again, focusing on basic skills and investments stands in sharp contrast to the administration's industrial policy approach of picking winners and losers. The CTF has produced and interesting and valuable road map to the future of U.S. strategy toward China.