To rebuff China, lawmakers must stop burdening U.S. tech firms

Move over Russia; More Americans now consider China to be the country’s greatest foe, according to a Gallup poll, and it seems that policymakers increasingly agree. Director of National Intelligence Avril Haines claimed that China is the “most consequential threat” to our national security, and that threat can come in different forms.

America is currently in the midst of a fierce competition with China over military and civilian technological development, but unfortunately, Congress and some of Georgia’s policymakers don’t appear to be on the same page. For all of its faults, Congress has mulled ways to assert America’s technological dominance and independence over China. Meanwhile, state officials have burdened American tech companies with lawsuits, overregulation and even adopting laws that may directly benefit the Chinese government.

Earlier this year, the Georgia General Assembly approved Senate Bill 351, which was partially intended to prevent youths from using social media without parental approval—something that may not even be constitutional. In doing so, the law requires that social media companies verify identities, users’ ages and proof of guardianship of minors. Presumably people would need to provide drivers’ licenses, birth certificates, etc.

This poses many cybersecurity risks, and—being a social media platform—the law will also direct TikTok users to hand their personal information over to the company, which is a subsidiary of ByteDance, a Chinese corporation. While I have no inkling over whether there is any truth to some of the rampant claims, policymakers and pundits have asserted that TikTok either has or could be required to share users’ personal data with the Chinese government. The concern is so widespread that President Joe Biden even signed a bill requiring that TikTok’s owners sell the platform within the year or face being banned—a measure that may not survive legal challenges.

If this wasn’t concerning enough, state policymakers have launched numerous attacks on American-owned tech companies. Georgia joined antitrust suits against Google and Apple—claiming that they each have formed a monopoly. As I have written before, these lawsuits are patently ridiculous. These companies all face stiff competition, and thus, don’t enjoy a monopoly.

Despite this, legislative attempts over the years have also targeted homegrown technology companies. For instance, one proposal sought to mandate how Apple and Google can operate their online marketplaces where cell phone users can buy and download applications. Why the government needs to be involved in mundane business operations such as this is beyond me.

While Georgia’s approach to technology companies and competing with China has been head-scratching at times, Congress has at least taken the situation somewhat seriously, even if their strategy is flawed, and Georgia is playing a key role in it. Just days ago, South Korean owned Absolics broke ground on a factory being built in the Peach State to create microchip components. Their investment in Georgia seems based in large part on the CHIPS Act of 2022, which was intended to “strengthen American manufacturing, supply chains, and national security,” according to a White House fact sheet.

The genesis of the CHIPS Act stemmed from concerns with China’s growing influence and technological might. Domestic microchip manufacturing has long been flagging. “The U.S.’s share of global chip manufacturing dwindled to around 12% in 2020, from 37% in 1990,” the Wall Street Journal reported. This is particularly worrisome. Chips are used in virtually all technologies from cell phones to advanced military equipment and weapons. Thanks to supply chain woes during the COVID-19 pandemic, the United States faced an acute microchip shortage.

Meanwhile, China has been ramping up their ability to churn out the all-important technology, and Americans have increasingly relied on Taiwan for microchips. What frightens policymakers is that Beijing’s leaders have made no bones about their desire to make Taiwan part of China—meaning all of their technology and manufacturing could fall under Beijing’s control. Considering this, Congress chose to pass the CHIPS Act, which encourages domestic microchip development by offering cash handouts and tax subsidies.

The CHIPS Act wasn’t without controversy. It is a massively expensive, big government program. “On top of all the waste, no one bothered asking how American competitiveness was going to be enhanced by adding even more to a $31 trillion debt—more than $1 trillion of it held by China—and expanding the federal regulatory leviathan through technocratic market meddling and industrial micromanagement,” my colleague Adam Thierer wrote in 2023. “We won’t beat China by becoming China.”

While the CHIPS Act is critically flawed, at least Congress’ heart was in the right place. Instead of seeking to inhibit domestic technological development and manufacturing, Congress supposedly wants to bolster it. If the Chinese government truly is America’s adversary, then Georgia’s policymakers will need to reconsider its approach and eschew policies that unnecessarily burden American tech companies.