House Financial Services Seeks Ways to Compete With China

How can the U.S. best compete with China?

It was the question at the center of a hearing Tuesday (Feb. 25) by the House Financial Services Committee, exploring the challenges posed by that nation across a range of issues, including energy security and the development of new technologies.

Rep. French Hill, R-Ariz., the committee’s chair, opened the hearing by noting that the tools to compete with China were already embedded in the U.S. system.

“We use sanctions, for example, but sanctions didn’t build us a $30 trillion economy,” Hill said. “We use export controls, but it wasn’t export controls that created eight American exceptional technology companies worth more than a trillion dollars each. We forget these facts at our peril.”

The hearing also examined China’s role as an official creditor, with Rep. Young Kim, R-Calif., citing figures from the World Bank showing that the total external government debt of low- and middle-income countries rose from $1.7 trillion to $3.5 trillion between 2011 and 2021.

“This is a large part … that can be directly attributed to the CCP’s irresponsible and opaque lending programs like the Belt and Road Initiative,” she said, referring to the Chinese Communist Party (CCP).

Companies in China, like their counterparts in the U.S., have of late been increasing their spending on artificial intelligence (AI). For example, tech/eCommerce conglomerate Alibaba plans to spend $52 billion over the next three years to pursue artificial general intelligence (AGI), or a version of AI that can think and reason as well as/better than humans.

“We aim to continue to develop models that extend the boundaries of intelligence. Why is that the primary aim?” Eddie Wu, the company’s CEO, said during the earnings call last week.

“Well, it’s because all of the visible AI application scenarios today that we see around content creation, search and so on and so forth have arisen precisely as a result of the ongoing extension of those boundaries, and we want to keep pushing out those boundaries to create more and more opportunities,” he added.

However, the company’s spending plan for AI is dwarfed by those from the four of the largest U.S. tech firms — Amazon, Google, Microsoft and Meta — which plan to spend $320 billion on artificial intelligence projects in this year alone.