China

When U.S. technology companies compete in China, they capture revenue, learn technologies and trends from a critical market, and extend U.S.-built ecosystems. Forcing them out of China would weaken U.S. global competitiveness and give Chinese firms greater scale to shape technology ecosystems.

In 2024, researchers and scientists in China were responsible for developing more than 1,250 new drugs, more than the EU and just slightly less than the United States, which developed 1,440. In total, China developed 30 percent of the world's new innovative drugs.

It is easy to be frustrated with the Chinese government and its use of merger and acquisition controls to limit the competitive advantage of American tech firms. But many policymakers in the West have enabled China’s success by weaponizing antitrust and competition laws to kill pro-competitive deals by Big Tech firms.

Chinese firms with ties to Beijing—and in some cases China’s military—are quietly exploiting America’s open economy, taxpayer support, and weak post-acquisition oversight, and Congress should close those loopholes before more U.S. innovation and industrial capacity are used to advance China’s strategic aims.

AI is a general-purpose technology with tremendous promise. But U.S. AI leadership and adoption is by no means assured, because there is intense international competition.

This Section 301 investigation rightly focuses on structural excess capacity. But its scope encompasses 16 economies rather than narrowly addressing the core cause of global trade upheaval—China’s mercantilism—thereby risking dilution of the blame for the country responsible for causing the need to recalibrate the global system.

China should come into full and immediate compliance with its WTO commitments; otherwise, as a last resort, the U.S. government should revoke China’s PNTR status. But policymakers should mitigate second-order effects, particularly on national power industries.

Sales of Chinese hybrids and plug-in hybrids in Europe increased by a factor of 14 between August 2024 and August 2025

Countries in the Global South are key markets for Chinese and U.S.-allied national power industries, which require scale economies to flourish. U.S. policymakers should stop viewing them as a “backyard” and recognize that they are a key battlefield in an industrial war.

Boosting U.S. competitiveness in national power industries is necessary, but not sufficient to avoid losing to China. America also must take measures to slow the PRC’s progress toward global dominance. This report provides more than 100 actionable recommendations for the administration and Congress. Western allies should take many of the same steps.